U.S. Says Iran’s Nuclear Claim Is ‘Hype’

By Indira A.R. Lakshmanan

The U.S. played down Iran’s claim of a “major” nuclear breakthrough as an exaggeration to bolster nationalism amid tighter sanctions rather than a step toward developing an atomic weapon.

Iranian state-run Press TV said yesterday 3,000 “new- generation” Iranian-made centrifuges were installed at its main uranium enrichment site at Natanz, and domestically made fuel plates were loaded at a medical research reactor in Tehran. Iran won’t be intimidated by outside pressure and will pursue technological advances, the Iranian Students’ News Agency said.

“Our view on this is that it’s not terribly new and it’s not terribly impressive,” State Department Spokeswoman Victoria Nuland told reporters in Washington yesterday. The announcement was “hyped” for a domestic audience, she said.

The opposing assessments came as the European Union received a letter from Iran’s top nuclear negotiator, Saeed Jalili, about resuming negotiations with the U.S., France, Britain, Germany, Russia and China. U.S. Secretary of State Hillary Clinton said the international community wants serious engagement about Iran’s program. Concern the dispute will lead to a military conflict that disrupts oil supplies from the Persian Gulf has contributed to a 3 percent increase in crude prices in February. Iran is OPEC’s second-biggest producer.

Oil for March delivery slipped 42 cents, or 0.4 percent, to $101.38 a barrel in electronic trading on the New York Mercantile Exchange at 6:04 a.m. local time today. It rose 1.1 percent to $101.80 yesterday, the highest settlement since Jan. 10, after Press TV reported that Iran halted crude oil shipments to Italy, Spain, France, Greece, Portugal and the Netherlands five months before a European Union embargo takes effect July 1.

“This is the kind of news that gets traders juices flowing,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said in a phone interview. “The Iran situation has gone from lukewarm to a simmer.”

The state-run Fars news agency said Iran summoned the ambassadors from the European countries to the foreign ministry to protest against the sanctions, without cutting exports.

Iran is “feeling the pressure” of “unprecedented sanctions” that U.S. and European officials say are impeding the Islamic republic’s acquisition of materials for its nuclear program and hobbling its economy, according to Nuland.

While Iran insists its nuclear program is for civilian energy and medical research, the U.S. and European governments say they suspect Iran is seeking an atomic weapons capability. Israeli leaders say they haven’t ruled out a military strike to prevent it.

“It’s a lot more likely that we will soon see major change in the situation,” Lynch said. “Whether that’s an attack by Israel or negotiations has yet to be determined.”

Over the past three months, the U.S. and the EU have imposed numerous new sanctions restricting petroleum and non- energy trade as well as financial transactions in an effort to force Iran to give up any illicit nuclear activities. Sanctions advocates say economic pressure is the best way to avert a military conflict in a region that holds more than half the world’s oil reserves.

Iran pumped 3.55 million barrels of crude a day in January, 11 percent of the total produced by the 12 members of the Organization of Petroleum Exporting Countries, according to data compiled by Bloomberg. Oil sales earned Iran $73 billion in 2010, accounting for about 50 percent of government revenue and 80 percent of exports, the U.S. Energy Department estimates.

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