Iran discounts U.S. bid to lower oil prices by tapping into reserves

Iran’s OPEC representative has dismissed renewed U.S. threat to tap into its strategic oil reserves in a bid to bring down global crude prices as a ploy with short-term impact, predicting further price hikes in fall and winter seasons.

Iran’s representative to the Organization of Petroleum Exporting Countries (OPEC) Seyyed Mohammad Ali Khatibi insisted on Tuesday that the fresh U.S. threat to open its strategic reserves in an attempt to reduce the steadily climbing oil prices in global markets would definitely not lead to declining crude prices in the long run.

The Iranian official further pointed out that the U.S. would ultimately have to replenish its strategic reserves by importing greater amounts of oil, leading to an increasing demand for the key energy source and higher crude prices.

Khatibi, however, emphasized that the U.S. has not yet acted on its threat and that the OPEC may decide on a retaliatory measure in case the American government moves ahead with the plan.

Meanwhile, he said the foremost reason behind the recent hike in crude prices was concern by major consumers about uninterrupted supplies of the product.

He also described geopolitical developments in the Persian Gulf region and the Middle East, as well as reduced oil production level in the North Sea region, as other reasons contributing to the increase in this summer’s crude price.

Global oil prices hit a new high on Monday, with New York's main contract, West Texas Intermediate (WTI) light sweet crude, reaching the highest level in the past 3.5 months amid renewed rhetorical threats by the Israeli regime about waging war on Iran.

New York's main contract for delivery in September soared as high as USD 96.53 a barrel -- the highest level since May 11.

In London midday deals, Brent North Sea crude for October delivery increased by 66 cents to USD 114.37 a barrel.

Crude prices have been increasing following illegal U.S. sanctions on Iran’s energy sector and persisting Israeli publicity campaign, threatening unilateral military strikes against Iran.