May 26, 2010 / 5:27 PM / 9 years ago

Iran will overcome sanctions: Libya

LONDON (Reuters) - Fresh sanctions on Iran will create difficulties but the Islamic Republic will be able to live with them, Libya’s top oil official told the Reuters Global Energy Summit on Wednesday.

The United States has said Russia and China, Iran’s allies, had agreed to a draft resolution that would expand U.N. sanctions on Iran for refusing to halt nuclear enrichment. Tehran has said its nuclear work is peaceful.

“It will create difficulties but it is not going to kill them,” Shokri Ghanem, the chairman of Libya’s National Oil Corporation, said. “We had sanctions for 20 years. What did it do to us? Not very much.”

Sanctions on Libya were lifted in 2004 after Tripoli renounced banned weapons programs and agreed to pay compensation to the families of those killed in the 1988 bombing of a U.S. airliner over the Scottish town of Lockerbie.

The draft sanctions on Iran, which have also been backed by Britain, France and Germany, will hit Iran’s banking and other industries. They include international inspection of vessels suspected of carrying cargo related to Iran’s nuclear or missile programs.

“I don’t think this is a prudent policy,” he said, urging diplomacy. “Countries can live through difficulties,” he added.

Ghanem said he did not believe Iran, a fellow OPEC member, would be subject to sanctions on its oil exports.

“If you embargo oil exports from Iran you are taking 3 million or 3.7 million barrels a day from the market. That will lead to an immense increase in the price of oil,” he said. “They are cutting their own noses.”

Iran has been storing more crude oil on tankers at sea in recent weeks which trade sources said was related to lower sales of the country’s sour crude. There has been speculation that fear of sanctions was having an impact on buyers.

Ghanem said he did not see an increase in demand “on other crude” which would indicate “any pulling out” on Iranian crude.

Iran is the world’s fifth-largest oil exporter and oil exports are the country’s key revenue earner. Other exports include commodities such as pistachio nuts.

“They are going to sanction pistachios first because they need more oil than pistachios,” Ghanem joked.

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