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West treads carefully with Iranian energy

Dec. 19, 2011 at 8:28 AM   |   Comments

BRUSSELS, Dec. 19 (UPI) -- If the United States and its allies implement sanctions on Iran's oil sector the right way, it could trigger a trade shift from Tehran, an official said.

Washington and European leaders are speaking with officials from key oil-producing nations on how best to keep global energy supplies static amid a potential embargo on Iran's oil.

"If properly implemented, countries will trend away from Iranian supply," a European official familiar with the talks told The Wall Street Journal on condition of anonymity. "There are lots of conversations going on with Saudis at various levels on this."

A direct embargo would mark a new level of diplomatic pressure on Tehran. Western allies are putting pressure on Iran's energy sector in response to concerns about the country's nuclear program.

Iran in 2010 was the second-largest oil exporter in the Organization of the Petroleum Exporting Countries. OPEC during its regular meeting in Vienna last week said keeping the world well-supplied was important during this period of economic volatility.

"The key here is to be doing this in a way where you can phase it in and it doesn't produce that kind of a spike," said Dennis Ross, the former top adviser on Iran in the White House. "There may well be a way to expand the overall pie of production."

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