Iran says U.S. pressure could backfire

By Peg Mackey and Alex Lawler

ROME (Reuters) - U.S. pressure on international oil firms to shun Iran will backfire by hindering efforts to add new supply to meet rising global demand, the Islamic Republic's oil minister said on Tuesday.

The United States, in dispute with Iran over its nuclear program, has banned its own nationals from doing business with Iran, OPEC's second-largest oil producer, and urged foreign companies to follow suit.

"This sort of pressure, which some companies may face, is going to affect the security of supply," Oil Minister Gholamhossein Nozari told Reuters Television in an interview.

"Those who are engaged in doing the sanctions and limitations should be very concerned what will happen in the next five to 10 years," he said.

The remarks came on the sidelines of a meeting of oil producing and consuming countries and as oil prices hit a new record high above $118 a barrel, driven in part by traders' concern about future supply.

U.S. political pressure has delayed progress on gas projects by European companies such as Total and Royal Dutch Shell and led to some European banks pulling their financing for Iranian oil deals.

In addition, U.S. and United Nations sanctions have targeted several big Iranian banks. But Tehran has brushed off any impact on the economy.

"These tactics are the old-style practices. These practices are, in my opinion, very toothless and are not effective these days," Nozari said.