Iran vulnerable on oil product imports-US DOE

By Chris Baltimore

NEW YORK (Reuters) - Iran's heavy dependence on imported oil products is "a vulnerability" for the OPEC nation, a top-ranking U.S. Energy Department official said on Wednesday.

Iran and the West are engaged in a diplomatic dispute over Iran's nuclear program, which Tehran says is for electricity and not for building nuclear weapons.

"There are no free moves for Iran -- everything has a consequence," U.S. Deputy Energy Secretary Clay Sell told Reuters in an interview. "Their dependence on imported products is a vulnerability."

The United States is conducting naval exercises in the Gulf, but insisted the moves are not aimed at boosting tensions after Iran captured 15 British sailors and Marines last week.

U.S. crude oil futures shot up to $68 a barrel late Tuesday over concern that the dispute and the seizure of the British personnel could escalate and disrupt oil moving through the Strait of Hormuz, which handles about a third of the world's sea-borne crude shipments.

Iran is OPEC's second largest oil producer but does not have enough refining capacity to meet its domestic gasoline needs. It imports about 40 percent of its requirements, and has been an importer since 1982.

Iran imported 150,000 barrels per day of gasoline in 2005, versus total consumption of 400,000 bpd, making it the second biggest gasoline importer after the United States, according to the U.S. Energy Information Administration.

Analysts have pointed to Iran's gasoline imports as a possible point of vulnerability if the West chose to pursue sanctions.