CAIRO—Iran warned Gulf Arab oil producers against boosting production to offset any potential drop in Tehran’s crude exports in the event of an embargo affecting its oil sales, the latest salvo in the dispute between the West and the Islamic Republic over its nuclear program.

The comments by Iran’s Opec governor, published on Sunday, came as Saudi Arabia’s oil minister was quoted the same day denying that his country’s earlier pledges to boost output as needed to meet global demand was linked to a potential siphoning of Iranian crude from the market because of sanctions.

Sanctions over military action

In a related development, the United States and Israel agreed to postpone a large joint military exercise from this spring to late in the year to avoid aggravating an already tense regional situation driven by conflicts with Iran, Israeli media reported on Sunday.

The drill, slated for May and named “Austere Challenge,” was announced in November by Andrew Shapiro, US assistant secretary of state for politics-military affairs, at the Washington Institute for Near East Policy.

The exercise as originally planned would include more than 5,000 US and Israeli forces and, among other things, simulate Israel’s ballistic missile defense. It would be the “largest and most significant joint exercise in the allies’ history,” Shapiro had said.

Britain’s foreign secretary, meanwhile, said that European nations will intensify pressure on Iran over its nuclear program, but insisted the West wasn’t pressing for military action.

William Hague told Sky News television that he believed the European Union would agree tough new sanctions against Tehran’s oil sector later this month, and would continue to look for peaceful methods of persuading Iran to ditch its pursuit of a nuclear weapon.

The top US military commander is scheduled for talks in Israel this week at a time when the US is concerned that Israel might be preparing to attack Iran over its nuclear program.

The Israeli Defense Ministry confirmed the planned visit Thursday by Army Gen. Martin Dempsey, the chairman of the US Joint Chiefs of Staff. It did not give his agenda for talks with Israelis—but Iran is expected to be at the top.

World oil markets have been jolted over concerns that Iran may choke off the vital Strait of Hormuz in retaliation for sanctions hampering its ability to sell its oil. Saudi Arabia and other key Gulf Arab producers have recently said they are ready to provide stable and secure supplies of oil.

Iran’s official news agency IRNA said on Sunday that the US has relayed a message to Iran about security in the Strait of Hormuz. It gave no details, and there was no immediate comment from Washington.

The US recently imposed sanctions targeting Iran’s central bank and, by extension, refiners’ ability to buy and pay for crude. The European Union is also weighing an embargo on Iranian oil, while Japan, one of Iran’s top Asian customers, has pledged to buy less crude from the country.

Unfriendly act

Mohammad Ali Khatibi, Iran’s Opec governor, was quoted on Sunday by the pro-reform Shargh newspaper as saying that attempts by Gulf nations to replace Iran’s output with their own would make them an “accomplice in further events.”

“These acts will not be considered friendly,” Khatibi said, adding that if the Arab producers “apply prudence and announce that they will not participate in replacing oil, then adventurist countries will not show interest,” in the embargo.

The embargo concerns are linked to Iran’s nuclear program. The West maintains Iran is enriching uranium for weapons purposes while Tehran says its program is for purely peaceful purposes such as generating electricity.

Saudi oil to the rescue

Saudi Arabia, the world’s largest oil producer and a close US ally, had said that it was ready to raise its output to accommodate global market needs. The country is the only member of the 12-nation Organization of the Petroleum Exporting Countries that has significant spare capacity, currently estimated at roughly more than 2 million barrels per day.

With concerns building amid the standoff between Iran and the West over Tehran’s nuclear program, a string of Asian and Western officials have visited Saudi Arabia over the past week. While offering assurances that it could meet a shortfall in supply through its spare capacity, Saudi officials have also been careful to say that it was an internal matter if nations chose to abide by any sanctions.

Oil Minister Ali Al-Naimi appeared to try to further clarify the country’s position in comments published Sunday in the daily Al-Ektisadiyah newspaper.

“We never said that Saudi Arabia is trying to compensate for Iranian oil in the case that sanctions [are enacted],” Al-Naimi was quoted as saying. “We said that we are prepared to meet the increase in global demand as a result of any circumstances.”

The kingdom has a production capacity of 12.5 million barrels and is believed to be producing slightly over 9 million to 9.5 million barrels per day.

Iran’s warning introduces a new layer of complication to an issue that has the potential for broad regional and global fallout.

(AP, Los Angeles Times)