Iran May Now Rank First in World in Natural Gas Reserves

Sanctions have no effect; EU will not impose oil sanctions, says oil minister.

Iran may rank first in the world in terms of gas reserves following the discovery of a new reservoir in the Caspian Sea, Iranian Oil Minister Rostam Qasemi said Sunday.

Also, the European Union "definitely" will not impose sanctions on OPEC member Iran's oil exports because such a measure would harm the global crude market, said Qasemi.

Glenn Klasner

In an effort Friday to increase pressure on Tehran over its disputed nuclear program, EU leaders called for more sanctions against Iran to be put in place by the end of January.

A new gas reservoir was discovered 700-meters deep in Iran's Caspian Sea, with its reserves standing at 50 trillion cubic feet. "It is predicted that after examination, the gas in this field would add up to much more than this," Qasemi added.

Iran sits on the world's second-largest natural gas reserves after Russia, but international sanctions have frustrated plans to develop the country's gas sector for export, and booming domestic demand has made Iran the third-largest consumer of natural gas and a top-30 importer.

"Our policy is to maintain a sustainable supply of oil to Europe ... Iran is a major oil producer and any sanctions on our oil exports would harm the global market," Qasemi told a news conference.

Last week, EU foreign ministers agreed to formulate new sanctions for Iran's energy, transport and banking sectors.

Iran has been hit by four rounds of UN sanctions and international sanctions for refusing to halt its sensitive nuclear activities, which the United States and its allies say are aimed at developing weapons.

In its latest report, the International Atomic Energy Agency (IAEA ) released new evidence confirming international concerns that Iran is developing nuclear weapons. Tehran denies the allegations, saying it needs nuclear technology to generate electricity.

Iranian authorities say the sanctions have had no impact on Iran's economy; authorities have defied the UN Security Council's demands to halt the country's nuclear project. "We (would ) have no problem in finding a replacement for the EU oil market," Qasemi said. On the country's oil swap, the oil minister said that currently the amount is not significant and stands at 25,000 to 30,000 barrels per day. Underlining the involvement of the private sector in oil swap, he said that the figure is expected to hit 400,000 to 500,000 barrels per day.

International sanctions have kept foreign investors away from the Islamic republic, which is OPEC's number two oil producer with 2.6 million barrels a day in oil exports. The United States, Britain and Canada announced new measures against Iran's energy and financial sectors last month, and France proposed new sanctions, including freezing the assets of Iran's central bank and suspending purchases of the country's oil.

France, backed by Germany and Britain, has led the push to ban Iran's crude, but some states - notably Greece - have expressed reservations because of their reliance on Iranian oil.

Iran's Foreign Minister Ali Akbar Salehi said attempts to impose a ban on Iran's oil exports were due to a rift among the European Union members. "When they [EU member states] have so many differences among themselves, they should know the unity they have is only superficial," Salehi said, according to Iran's semi-official Mehr news agency. "Each member goes after its own maximal interests ... they have this profiteering approach and, with this rift, such sanctions cannot be imposed."

Describing the oil market situation as balanced, Salehi also said that Iran will consider fair prices and the condition of the market in the upcoming OPEC summit, slated for December 14.

The report did not reveal details of initial estimates of the newly discovered reserves, nor did it list the exact location.