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Iran says new sanctions from West 'in vain'

Reuters
Nov 23, 2011 at 12:27am IST

Tehran: Iran dismissed a new wave of sanctions on Tuesday, saying the West's attempts to isolate its economy would only serve to unite Iranians behind their government's nuclear programme.

The United States, Britain and Canada announced new measures against Iran's energy and financial sectors on Monday and France proposed "unprecedented" new sanctions, including freezing the assets of its central bank and suspending purchases of its oil.

The news pushed benchmark Brent crude above $107, reflecting concerns about escalating tensions with the world's fifth biggest exporter.

Iran says new sanctions from West 'in vain'

The United States, Britain and Canada announced new measures against Iran's energy and financial sectors.

Critics of the sanctions said they would fail to stop Iran's nuclear work and would play into the hands of a government that wears its hostility to Washington as a badge of pride.

"Such measures are condemned by our people and will have no impact and be in vain," Foreign Ministy spokesman Ramin Mehmanparast told a news conference. "They will have no impact on Iran's trade and economic ties with other countries."

The latest sanctions were prompted by a U.N. nuclear agency report that suggested Iran had worked on an atomic bomb design. Tehran maintains its work is entirely peaceful and said the report was based on false Western intelligence.

"If our people feel that enemies want to deprive them of their rights by threatening, bullying and adopting illegal and irrational methods, they will pursue the path that they have taken, more united and more determined than ever," Mehmanparast said.

Parliament speaker Ali Larijani said Iran would hit back.

"This will not go unanswered and we will review our ties with them ... there will be a tit-for-tat reaction," he said.

Russia, whose reluctance to join Washington's new anti-Iran drive prevented any possible tightening of the four existing rounds of U.N. sanctions, condemned what it said were "extraterritorial measures unacceptable and contradictory to international law".

Conflict risk

The sanctions are meant to pressure Iran to suspend the nuclear programme before it gets the bomb. Israel and Washington say they do not rule out military strikes if other efforts fail.

Iran denies it is seeking nuclear weapons and says its atomic work is aimed only as generating power and for medical and agricultural uses.

The risk of conflict, which could close the Strait of Hormuz, the exit point of the Gulf where most crude from the region passes, has worried markets.

Commerzbank oil analyst Carsten Fritsch said the new sanctions "increase the risk of supply disruptions either directly from Iran or transported via the Strait of Hormuz, which carries one third of seaborne oil".

Some Tehran residents initially feared airstrikes had started when a huge explosion rocked a military base near the capital on Nov. 12 but the blast turned out to be an accident that happened while troops were working on a missile.

Turkish President Abdullah Gul called for a return to talks between Iran and world powers that stalled last January.

"For the sake of peace it is very important that the dialogue between Iran and the West progresses in a more frank and transparent way," Gul told the London Guardian daily.

"When I say transparent I mean Iran, and when I say frank I mean the West."

The National Iranian American Council advocacy group said the new sanctions would "punish ordinary people for the actions of the Iranian regime" and impede sales of food, medicine, and other humanitarian goods to Iran.

"Unfortunately, policymakers have succumbed to a false choice between either more broad sanctions on Iran or military strikes," NIAC said in a statement.

"Iran's democratic opposition has warned that broad sanctions are a 'gift to the regime'. Sanctions on Iran have undermined the backbone of the opposition - Iran's middle class - and enriched Iran's Revolutionary Guard."

Impact unclear

The true economic impact of the new measures is unclear.

The United States already bans imports of Iranian oil and a Tehran official said he had no fear of losing EU markets.

"Iran's crude exports to the countries that are members of the European Union are very small," the head of the National Iranian Oil Company said on the Iranian Oil Ministry website.

"There are various countries that want Iran's oil and the Islamic Republic of Iran does not have any concerns about European countries not buying its oil," Ahmed Ghalehbani said.

U.S. and EU sanctions passed in 2010 already stopped most Western banks dealing with Iran and pressure from Washington made it temporarily impossible for Indian oil buyers to pay for some $5 billion of Iranian oil earlier this year.

And while President Barack Obama said on Monday the United States had "the entire Iranian banking sector -- including the Central Bank of Iran" in its sights, Washington avoided sanctioning the bank that handles Iran's the receipts of more than 2 million barrels of oil exported each day, for fear of the impact on the oil market and global economy.

Britain ordered all British financial institutions to stop doing business with their Iranian counterparts, including the central bank.

"(The new sanctions are) clearly going to add to the transaction costs that Iranians have to face for all of their international trade. It is going to be a complication, but I still think that the impact will be marginal," said David Butter, regional director at the Economist Intelligence Unit in London.

"It is going to slow down business and trade activities to some extent, but Iran has had many years to build up experience of dealing with these sorts of measures and I'm sure they'll find some ways around them."

Iran says new measures aimed at its petrochemicals sector would serve only to push up prices rather than stop its $8 billion annual exports.

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