Iran feels pinch of new EU oil sanctions

By Ryan Lucas

Associated Press

Published: Sunday, July 1 2012 12:00 a.m. MDT

Fully aware of the burden this places on families, Ayatollah Ahmad Khatami, an adviser to Supreme Leader Ayatollah Ali Khamenei, said last week that the price hikes are "a matter of pain" for Iran. But he also urged people not to complain, telling them: "If you say ouch, the arrogant ones will say they have achieved their goal. So be patient, and make them regret it."

So far, the Iranian public has proven patient, in part because of widespread support for the nation's nuclear program, which is a source of pride for many in Iran, regardless of their political leanings.

"Westerners said the sanctions have aimed at halting nuclear activities. But they have targeted our families and children," said Abbas Heidar, a 32-year-old teacher in Tehran. "The government is continuing its nuclear activities and I do not expect it stop."

Iranian officials, meanwhile, scrambled Sunday to present the government as actively working to ease any hardship the sanctions might bring.

Central bank governor Mahmoud Bahmani told the semiofficial Mehr news agency that Iran has "plans" to deal with the embargo and enough hard currency to meet its import needs.

"We have not remained passive. To confront the sanctions, we have plans in progress," Bahmani said without elaborating.

Iran's Oil Minister Rostam Ghasemi ordered his staff to "mobilize" against the sanctions, according to Mehr. It did not elaborate.

Ghasemi also sought to boost public morale, telling state television late Saturday that Iran has weathered previous rounds of sanctions.

"I do not see it as a problem that enemies have imposed an embargo today," he said. "They have imposed similar sanctions years ago, and nothing happened."

He said Iran has already halted oil sales to many EU countries, and had found new buyers to replace them.

"Developing countries and countries with fast economic growth have no alternative to oil. Fortunately, because of the quality of our country's oil, all are interested in using it," he said.

Mehr published its own analysis listing measures that Iran could take to counter the sanctions, including shutting the vital Strait of Hormuz. The semiofficial news agency's editorials sometimes reflect views held by top Iranian officials who do not wish to state them publically.

On Sunday, however, Iran's Defense Minister Gen. Ahmad Vahidi made statements to the official IRNA news agency about the strait in which he did not mention any plans to close it — remarks that suggest that Iran is playing down the threat in dealings with the West.

Vahidi said Iran is the main protector of the waterway, and that Tehran "has confronted anybody who tried to endanger the Strait."

Mehr also suggested that Iran could make use of hard currencies other than the U.S. dollar and the euro, form its own insurance syndicate to replace foreign companies that withdraw from the market, store up oil in tanks for later sale so as not to cut production, or simply reduce oil production to save its reserves for the future.

Lucas reported from Cairo.

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