Iran threatens to hold back oil sales

DUBAI - Iran, the world's fourth biggest oil producer, may hold back on oil sales if its nuclear programme is referred to the UN Security Council, President Mahmoud Ahmadinejad has said.

Iran has failed to convince the United States and the European Union its nuclear programme is peaceful, prompting the UN nuclear watchdog to recommend Tehran be reported to the Security Council for possible sanctions.

Diplomats expect a referral is likely in November.

"If Iran's case is sent to the Security Council, we will respond by many ways, for example by holding back on oil sales," Ahmadinejad told the United Arab Emirates' English-language daily, the Khaleej Times.

He did not specify what he meant. Oil accounts for about 80 per cent of Iran's export earnings.

"We have been extremely co-operative, we have had more than 1,200 man-days of inspections, monitoring cameras are everywhere in our facilities," the president added.

Analysts had predicted Iran could use its abundant oil resources as leverage against countries seeking to send it to the Security Council.

Opec heavyweight Iran pumps around 4 million barrels per day.

It sees politics and its hydrocarbon resources as intimately linked. Nationalist leader Mohammad Mossadegh, who was ousted in a CIA-backed coup in 1953 after nationalising the British-run oilfields, is an enduring symbol of national pride.

Ahmadinejad's remarks are the latest in a series of warnings Iran has made against sending its case to New York.

On Thursday, it reiterated it would resume uranium enrichment and stop allowing UN snap inspections of its atomic facilities if it was referred.

Iran has restarted nuclear fuel related work but has so far stopped short of actually producing enriched uranium in underground facilities near the central town of Natanz.

Washington says this enriched uranium will be used in warheads but Tehran insists it is only needed for power stations.

Tehran has already threatened to use trade ties to punish countries that voted to report it to the Security Council, possibly endangering major deals with India and Japan.

The 35-nation governing board of the International Atomic Energy Agency (IAEA) meets next month to discuss Iran.

"So I urge the UN not to bend to US pressure," Ahmadinejad said.

"We understand and we know that their (the Western powers') intentions are bad. All of our activities have been transparent to the IAEA and we've announced many times that because of our religious and cultural views (we) are against the creation and use of nuclear weapons."

- REUTERS