Iran Says It Will Block Middle East Oil Exports If It Can't Ship

  • Economics
Iran Says It Will Block Middle East Oil Exports If It Can't Ship

Iran will halt Middle East oil exports if it’s not allowed to ship its crude through the Strait of Hormuz, according to a top military official.

If the Islamic Republic can’t use the Strait for its oil exports, “there will be no security for others either and no other crude will be exported from this region,” Armed Forces Chief of Staff Mohammad Bagheri said, state-run Mehr news agency reported. The U.S. Army and other military forces present in the Middle East “know full well that the smallest mistake in the region will bear a heavy cost for them.”

Iran has been threatening to halt exports from Hormuz, the world’s most important oil chokepoint, since early July. Bagheri’s comments come after the U.S. reimposed a set of economic sanctions that had been eased against Iran as part of a 2015 international nuclear agreement. The measures are set to intensify in November when they will target Iran’s oil sales - the lifeline of its economy.

Brent crude prices climbed as much as 0.5 percent to $77.49 a barrel by 12:51 p.m. in Dubai.

U.S. President Donald Trump’s decision to withdraw from the nuclear accord in May comes amid tensions between Iran and regional rival Saudi Arabia, which has close ties with the Trump administration. Saudi Arabia and Gulf Arab nations aligned with the kingdom have been bolstered amid Trump’s efforts to isolate Iran politically and on the economic front. Other parties have said the nuclear accord is functioning and necessary to maintain security in the region.

The Trump administration has stated its goal is to cut Iran’s oil revenue to zero. Iranian President Hassan Rouhani said last month that "it’s an incorrect belief that all oil producers would be able to export and Iran would be the only country unable to export oil."

The Strait of Hormuz is at the mouth of the Persian Gulf, the world’s biggest concentration of tankers that carry about 30 percent of all seaborne-traded crude oil and other liquids during the year.

Source: Bloomberg