Iran warns Gulf nations against boosting oil production
Iran has warned Gulf nations against boosting their oil production saying they will be responsible for the consequences of any such move.
The warning comes as the US and European Union have been seeking to curb Iran’s oil exports.
Leaders from various nations are travelling to the region in a bid to seek extra supplies to offset any shortfalls.
Iran has warned of retaliation against any output increase.
According to the Sharq daily newspaper, Mohammad Ali Khatibi, Iran’s representative to Opec, said that “our Arab neighbour countries should not cooperate” with the US and European countries.
He added that any measures taken by the countries would not be perceived as “friendly”, adding that if they give “the green light to replacing Iran’s oil these countries would be the main culprits for whatever happens in the region – including the Strait of Hormuz”.
In the event any oil embargo is imposed on Iran, Asia is likely to feel the oil supply shortage in the short term”
Asian nations are amongst the biggest buyers of Iranian oil, with China, India, Japan and South Korea accounting for almost 50% of all of Tehran’s shipments.
The US has been seeking the support of these countries in a bid to reduce Iran’s oil exports as part of sanctions against the country.
However, given the robust growth, especially in China and India, these nations require large quantities of oil. As a result any cuts in imports from Iran will have to be substituted by an increased supply from other sources.
“For the Asia economies, a sustainable and continuous oil supply coming from the middle east is very important,” Ker Chung Yang, an investment analyst at Phillip Futures told the BBC’s Asia Business Report.
“In the event any oil embargo is imposed on Iran, Asia is likely to feel the oil supply shortage in the short term.”
Mr Ker explained that any shortfall will see a rise in oil prices which may result in a higher consumer prices in the region.