World could handle Iran oil cutoff -US Energy Sec

Tom Doggett, Reuters:

The world economy could handle any theoretical cutoff of Iranian oil exports "for a while," U.S. Energy Secretary Sam Bodman said on Tuesday. READ MORE

"We certainly could handle it for a while," Bodman told reporters.

Iran is the world's fourth-biggest oil exporter and holds 10 percent of proven global oil reserves.

Oil swept to a record $75.35 a barrel in April as the dispute between Iran and the United States over uranium enrichment rumbled on. On Sunday, Iran Supreme Leader Ayatollah Ali Khamenei said oil flows from the Gulf would be endangered if Washington made a "wrong move."

But there was a more conciliatory tone on Tuesday when Iran took delivery of a package of incentives put together by Britain, France and Germany and approved by the United States, China and Russia.

"The proposals had some positive steps in them and some ambiguities which should be removed," Ali Larijani, secretary of Iran's Supreme National Security Council, said after meeting European Union foreign policy chief Javier Solana.

Energy traders are concerned that if the United Nations punished Iran with sanctions, Tehran could try to hurt the Western economies by stopping some or all of its oil exports -- as Iraq used to do before the U.S. invasion in 2003.