In his most stunning remark, Qasemi threatened to halt all Iranian oil exports if the Western world increases its sanctions on Iran,
“If you continue to add to the sanctions, we cut our oil exports to the world,” he told reporters while attending a conference in Dubai. “If sanctions intensify, we will stop exporting oil.”
One unimpressed commentator said, “It’s like a kid unhappy at a ball game who threatens to take his ball and go home.”
But Qasemi insisted there would be a real impact—on other countries—if Iran shut off the oil valve. “The lack of Iranian oil in the market would drastically add to the price,” he said. That was what he said back in the spring.
Iranian exports have now dropped two-thirds from their average over the last two decades of 2.5 million barrels a day to just 860,000 last month, according to the International Energy Agency.
Yet there is no discernible impact on prices. The price of an average OPEC barrel over all of 2011 was $107.46. The price of an OPEC barrel the day before Qasemi spoke was $107.13.
But Qasemi insisted Iran does not want higher oil prices.
Iran wants “reasonable” prices for crude but “we don’t want the price of oil to increase” from current levels. Yet just four weeks ago, he said the price of a barrel should be “at least” $150, a figure that has never been reached. (The record price of $140.73 was set on July 3, 2008.)
As for his threat to halt all oil exports, Qasemi said, “We have prepared a plan to run the country without any oil revenues. So far to date, we haven’t had any serious problems. But if sanctions were to be renewed, we would go for Plan B.” He gave no hint as to what Plan B might be. He did not explain how the Iranian government, which has for many years relied on oil revenues for more than half of its budget, could function with oil exports brought to zero.
Qasemi’s threat was interesting, if not credible, because it shifted gears from the repeated military threat to close the Strait of Hormuz. Qasemi didn’t air that threat at all. As long as Iran is exporting some oil, that threat has little credibility because every drop of Iran’s oil exports goes through the Strait.
Qasemi’s comments Tuesday also showed a lack of consistency. Having denounced sanctions and threatened strong Iranian action against any additional sanctions, he then reversed gears and said sanctions were meaningless. “Iran has been facing US sanctions for 30 years while successfully managing its oil sector,” he said, brushing sanctions aside.
That is true—but beside the point. Everything changed in July when EU sanctions took effect. Those sanctions ended European oil imports from Iran and blocked access for most tankers to insurance, meaning few non-Iranian tankers will call at Iran any more. Qasemi ignored that.
Qasemi repeated his frequent refrain that Iran is pumping 4 million barrels of oil a day, a figure Iran hasn’t reached in years. Iran’s production has been below 3.8 million barrels a day since the summer of 2009 and fell to just 2.72 million in September, according to Platts, an industry news outlet.