Iran test-fired long range missiles on Saturday during a naval exercise in the Gulf, the
semi-official Fars news agency said, following a threat by Iran to close shipping lanes if the West imposes sanctions on its oil exports.

Another Iranian news agency reported that Iran's nuclear negotiator would write to the European Union offering to resume nuclear talks with major powers.

The 10-day naval drill in the Gulf began last week as Iran showed its resolve to counter any attack by enemies such as Israel or the United States.

"Iran test-fired missiles including long range (missiles), surface to sea, ... in the Persian Gulf," Fars said on Saturday.

Iran threatened on Tuesday to stop the flow of oil through the Strait of Hormuz if it became the target of an oil embargo over its nuclear ambitions, a move that could trigger military
conflict with countries dependent on Gulf oil.

Tensions with the West have risen since the UN nuclear watchdog reported on Nov. 8 that Iran appears to have worked on designing an atomic bomb and may still be pursuing research to that end. Iran denies this and says it needs nuclear technology to generate electricity to meet growing domestic demand.

Letter to Ashton

The semi-official Mehr news agency quoted a senior official as saying that nuclear negotiator Saeed Jalili would write to EU foreign affairs chief Catherine Ashton to express Iran's readiness for fresh nuclear talks with major powers.

"Jalili will soon send a letter to Catherine Ashton over the format of negotiations ... then fresh talks will take place with major powers," said Iran's ambassador to Germany Alireza Sheikh Attar.

Talks between Iran and the five permanent members of the UN Security Council, the United States, Russia, China, Britain and France, plus Germany (P5+1) stalled in January.

The EU is considering a ban - already in place in the United States - on imports of Iranian oil, although diplomats and traders say awareness is growing in the EU that such a ban could damage the bloc's economy without doing much to hurt Iran.

Iranian Oil Minister Rostam Qasemi said imposing sanctions on Iran's oil exports would lead to a leap in prices.

"Undoubtedly the price of crude will increase dramatically if sanctions are imposed on our oil ... It will reach at least over $200 per barrel," the Aseman weekly quoted Qasemi on
Saturday as saying.

During military drills in 2009, Iran test-fired its surface-to-surface Shahab-3 missile, said to be capable of reaching Israel and U.S. bases in the Middle East.

The U.S. has expressed concern about Iran's missiles, which include the Shahab-3 strategic intermediate range ballistic missile with a range of up to 1,000 km (625 miles),
the Ghadr-1 with an estimated 1,600 km range and a Shahab-3 variant known as Sajjil-2 with a range of up to 2,400 km.

Iranian media have said the latest naval exercise differed from previous ones in terms of "the vastness of the area of action and the military equipment and tactics that are being employed".

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