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Tue 24 Jan 2012 07:54 AM

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Iran scoffs at EU oil ban, repeats threat to close Hormuz

Tehran accuses Europe of waging war after bloc joins with US to curb Iran’s oil exports

Iran scoffs at EU oil ban, repeats threat to close Hormuz
The European Union has banned imports of Iranian oil in bid to stop Tehrans nuclear programme

Iran accused Europeans on Monday of waging
"psychological warfare" after the EU banned imports of Iranian oil,
joining the United States in new sanctions aimed at preventing Tehran from
getting nuclear weapons.

The Islamic Republic, which denies trying to build an atom
bomb, scoffed at efforts to choke its oil exports, as Asia lines up to buy what
Europe scorns.

Some Iranians also renewed threats to stop Arab oil from
leaving the Gulf
and warned they might strike US targets worldwide if
Washington used force to break any Iranian blockade of a strategically vital
shipping route.

Yet in three decades of confrontation between Tehran and the
West, bellicose rhetoric and the undependable armoury of sanctions have become
so familiar that the benchmark Brent crude oil price edged only 0.8 percent
higher, and some of that was due to unrelated currency factors.

"If any disruption happens regarding the sale of
Iranian oil, the Strait of Hormuz will definitely be closed," Mohammad
Kossari, deputy head of parliament's foreign affairs and national security
committee, told Fars news agency a day after US, French and British warships
sailed back into the Gulf.

"If America seeks adventures after the closure of the
Strait of Hormuz, Iran will make the world unsafe for Americans in the shortest
possible time," Kossari added, referring to an earlier US pledge to use
its fleet to keep the passage open.

The United States, which imposed its own sanctions against
Iran's oil trade and central bank on Dec. 31, welcomed the EU move, as did
Israel which has warned it might attack Iran if sanctions do not deflect Tehran
from a course that some analysts argue could potentially give Iran a nuclear
bomb next year.

US Secretary of State Hillary Clinton said in a statement
with Treasury Secretary Timothy Geithner: "This new, concerted pressure
will sharpen the choice for Iran's leaders and increase their cost of defiance
of basic international obligations."

Germany, France and Britain used the EU sanctions as a cue
for a joint call to Tehran to renew long-suspended negotiations on its nuclear
programme. Russia, like China a powerful critic of the Western approach, said
talks might soon be on the cards.

Iran, however, said new sanctions made that less likely. It
is a view shared by some in the West who caution that such tactics risk
hardening Iranian support for a nuclear programme that also seems to be subject
to a covert "war" of sabotage and assassinations widely blamed on
Israeli and Western agents.

European Union foreign ministers who agreed an anticipated
ban on imports of Iranian crude at a meeting in Brussels were so anxious not to
penalise the ailing economies of Greece, Italy and others to whom Iran is a
major oil supplier that the EU embargo will not take full effect until July 1.
And the strategy will be reviewed in May to see if it should go ahead.

Curbing Iran's oil exports is a double-edged sword, as
Tehran's own response to the embargo clearly showed.

Loss of revenue is painful for a clerical establishment that
faces an awkward electoral test at a time of galloping inflation which is
hurting ordinary people. But since Iran's Western-allied Arab neighbours are
struggling to raise their own output to compensate, the curbs on Tehran's
exports have driven up oil prices and raised costs for recession-hit Western

A member of Iran's influential Assembly of Experts, former
intelligence minister Ali Fallahian, said Tehran should respond to the
delayed-action EU sanctions by stopping sales to the bloc immediately, denying
the Europeans time to arrange alternative supplies and damaging their economies
with higher oil prices.

"The best way is to stop exporting oil ourselves before
the end of this six months and before the implementation of the plan," the
semi-official Fars news agency quoted him as saying.

"European Union sanctions on Iranian oil is psychological
warfare," Iranian foreign ministry spokesman Ramin Mehmanparast said.
"Imposing economic sanctions is illogical and unfair but will not stop our
nation from obtaining its rights."

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Deputy Foreign Minister Abbas Araqchi told the official IRNA
news agency that the more sanctions were imposed on Tehran "the more
obstacles there will be to solve the issue".

Iran's oil ministry issued a statement saying the sanctions
did not come as a shock. "The oil ministry has from long ago thought about
it and has come up with measures to deal with any challenges," it said,
according to IRNA.

Mehmanparast said: "The European countries and those
who are under American pressure, should think about their own interests. Any
country that deprives itself from Iran's energy market, will soon see that it
has been replaced by others."

China, Iran's biggest customer, has resisted US pressure to
cut back its oil imports, as have other Asian economies to varying degrees.
India's oil minister said on Monday sanctions were forcing Iran to sell more
cheaply and that India planned to take full advantage of that to buy as much as
it could.

The EU measures include an immediate ban on all new
contracts to import, purchase or transport Iranian crude and petroleum
products. However, EU countries with existing contracts can honour them up to
July 1, and there will be a review of the plans before then.

EU officials said they also agreed to freeze the assets of
Iran's central bank and ban trade in gold and other precious metals with the
bank and state bodies.

EU foreign policy chief Catherine Ashton said: "I want
the pressure of these sanctions to result in negotiations."

"I want to see Iran come back to the table and either
pick up all the ideas that we left on the table ... last year ... or to come
forward with its own ideas."

Iran has said it is willing to hold talks with Western
powers, though there have been mixed signals on whether conditions imposed by
both sides make new negotiations likely.

The Islamic Republic insists it is enriching uranium only to
produce electricity and for other civilian uses. The start this month of a
potentially bomb-proof - and once secret - enrichment plant has deepened
scepticism abroad, however.

The United Nations' nuclear watchdog, the International
Atomic Energy Agency, confirmed plans for a visit next week by senior
inspectors to try and clear up questions raised about the purpose of Iran's
nuclear activities. Tehran is banned by international treaty from developing nuclear

"The Agency team is going to Iran in a constructive
spirit, and we trust that Iran will work with us in that same spirit,"
IAEA chief Yukiya Amano said in a statement announcing the Dec. 29-31 visit.

Iran, whose 'great power' ambitions face a setback from the
difficulties of its Arab ally, Syrian President Bashar al-Assad, has powerful
defenders in the form of Russia, which has built Iran a reactor, and China.
Both permanent U.N. Security Council members argue that Western sanctions are

Russian Foreign Minister Sergei Lavrov, classifying the EU
embargo among "aggravating factors", said Moscow believed there was a
good chance that talks between the six global powers and Iran could resume soon
and that Russia would try to steer both Iran and the West away from further

His ministry issued an official statement expressing
"regret and alarm": "What is happening here is open pressure and
diktat, an attempt to 'punish' Iran for its intractable behaviour.

"This is a deeply mistaken approach, as we have told
our European partners more than once. Under such pressure Iran will not agree
to any concessions or any changes in its policy."

But that argument cuts no ice with the US administration,
for which Iran - and Israel's stated willingness to consider unilateral
military action against it - is a major challenge as President Barack Obama
campaigns for re-election against Republican opponents who say he has been too
soft on Tehran.

"We and the EU are looking at ways to increase the
pressure on Iran not because we want to go to war, not because we are looking
for a military resolution but because we are looking for a resolution that has
been a problem for a decade," Ivo Daalder, the US ambassador to NATO said
on Monday in London.

"We are ready at any time to sit down with them and
have a serious conversation about how to resolve this issue through
negotiations ... Let's just try to continue to go down this path. The
alternatives are much more difficult."