Madrid: Iran, the second-largest oil producer in the Organisation of Petroleum Exporting Countries (Opec), will remain a reliable source of supply but will react if threatened, its oil minister said yesterday amid growing tension between Iran and Israel.
Speculation about a possible attack on Iran because of its nuclear work has risen since a report last month said Israel had practised such a strike, supporting oil prices which have hit record highs above $140 a barrel.
"Iran has been always a reliable source of supply, and remains as a supplier forever," Gholamhossein Nozari told reporters during the World Petroleum Congress in Madrid. "Iran is a huge country. If there would be any kind of activity of any sort, Iran is not going to be quiet and is going to react, and nobody could imagine what would be the reaction of Iran."
The head of Iran's Revolutionary Guards said in remarks published last week that Tehran would impose controls on shipping in the Gulf and the strategic Strait of Hormuz if it was attacked.
The oil minister reiterated Iran's view that world oil markets have enough supply, although he added that his country was able to add production to the market if there was a need.
"We have some spare capacity of production but at the same time, at this moment, there is no need for more supply. If there is any need, we are going to contribute and add production."
Oil prices are high in part due to a lack of investment which is raising concern about future supplies, the minister said.
Prices could head even higher should the value of the US dollar decline further. "Part of it is due to the dollar. If this trend continues, it looks like we have no other choice but to see higher prices."
Iran is a huge country. If there would be any kind of activity of any sort, Iran is not going to be quiet."
