Iran blasts West over oil embargo

BEIRUT(WSJ) — Iran's president attacked Western powers for sanctions against Iran but offered no clear indication on whether his country would return to negotiations on its nuclear program, in his first public remarks since the European Union agreed to ban Iranian oil imports.

In a public rally on Thursday in the southeastern city of Kerman, President Mahmoud Ahmadinejad denied that Iran has been an obstacle to reviving negotiations, but stopped short of offering to restart talks, saying, "Why would we run away from negotiations? Why should the person who is in the right and has logic avoid talks?"

Iran's parliament echoed the defiant tone by saying it would consider an immediate halt of oil exports to Europe to pre-empt the oil embargo, which the EU set to begin on July 1 to give its members time to find alternative supply sources.

Mr. Ahmadinejad declared that the embargo wouldn't hurt Iran's economy, saying other export markets would easily compensate for the loss of sales to Europe, the destination of about a quarter of Iranian oil exports. The Chinese government, Iran's No. 2 oil buyer after the EU, on Thursday criticized use of sanctions to "blindly pressure" Iran.

But the expanding measures are already taking a toll. The value of Iran's currency, the rial, has fallen by nearly 50% against the dollar in the past month on the black market. The prices of basic food items and other goods are increasing daily, according to Iranian media reports and interviews with Tehran residents.

On Thursday, Iran's central bank devalued the rial by 8% against the dollar and ordered all currency-exchange shops to adhere to the official rate or be shut down, according to Iran's official media.

This week, Mr. Ahmadinejad approved an order that banks increase interest rates to 21%, from between 12.5% and 15%, to encourage Iranians to keep their capital in domestic banks, as Iranians hoard dollars and gold.