Iran delays missile test

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Iran delays missile test

By Parisa Hafezi | Reuters – 3 hours ago

TEHRAN (Reuters) - Iran said it had delayed promised long-range missile tests in

the Gulf on Saturday and signaled it was ready for fresh talks with the West on

its disputed nuclear program.

Iran's state media initially reported early on Saturday that long-range missiles

had been launched during naval exercises, a move likely to irk the West, which

is concerned over threats by Tehran to close off a vital oil shipping route in

the Gulf.

But Deputy Navy Commander Mahmoud Mousavi later went on the English language

Press TV channel to deny the missiles had in fact been fired: " The exercise of

launching missiles will be carried out in the coming days. "

Ten days of Iranian naval drills have coincided with increased tension over

Tehran's nuclear program with Washington and its allies. The European Union said

it was considering a ban - already in place in the United States - on imports

from the major oil producer.

A spokeswoman for Germany's Foreign Ministry said Berlin was following events

carefully, adding: " Foreign Minister (Guido) Westerwelle is concerned that the

verbal escalation of the last few days does not lead to a logic of actual

escalation. "

Analysts say the conflicting reports on the missile test were intended to make

the West think twice about ratcheting up pressure on Iran over its nuclear work

- which the West says, and Tehran denies, is aimed at building nuclear bombs.

" The location and the timing of the drill were very shrewd ... then came reports

on launching missiles that can target America's bases in the region and Israel, "

said analyst Hamid Farahvashian.

" One of the messages was that you mess with Iran, then you stand to suffer from

economic havoc, " he said. " Iranians have always used this method of carrot and

stick ... first they used the stick of closing Hormuz and now the carrot is its

willingness for talks. "

OIL PRICE

EU foreign policy chief Ashton wrote to Iran's nuclear negotiator

Saeed Jalili in October and has not yet had a reply, a spokesman said. But the

bloc was open to meaningful talks with Tehran provided there were no

preconditions.

" We continue to pursue our twin-track approach and are open for meaningful

discussions on confidence-building measures, without preconditions from the

Iranian side, " EU foreign policy spokesman, Mann, said in an email.

Tehran threatened on Tuesday to stop the flow of oil through the Strait of

Hormuz if it were hit by an oil embargo over its nuclear ambitions.

Oil Minister Rostam Qasemi said imposing sanctions on Iran's oil exports would

lead to a leap in prices.

" Undoubtedly the price of crude will increase dramatically if sanctions are

imposed on our oil ... It will reach at least over $200 per barrel, " the Aseman

weekly quoted Qasemi on Saturday as saying.

Reports on Iran threatening to close the Strait of Hormuz briefly pushed up the

price of oil.

" DRUM BEAT OF WAR "

Iran has fired missiles in past exercises, as in 2009, when it fired the

surface-to-surface Shahab-3 strategic ballistic missile, whose range of up to

1,000 km (625 miles) could enable it to strike Israel and U.S. bases in the

Middle East.

Washington has expressed concern about Tehran's missiles, which include the

Shahab-3, the Ghadr-1 with an estimated 1,600 km range and a Shahab-3 variant

known as Sajjil-2 with a range of up to 2,400 km.

Iranian media have given massive coverage to the drill, state television

broadcasting live in an apparent attempt to strike a patriotic chord among

ordinary Iranians concerned about a foreign military strike. The United States

and Israel have not ruled out a military option if diplomacy fails to resolve

the nuclear dispute.

" I have already witnessed a war with Iraq in the 1980s ... I can hear the drum

beating of the war. A misfired bullet can spark a serious war, " said merchant

Mohsen Sanaie, 62, glancing over newspaper headlines at a central Tehran

newsstand.

He warily pointed at the headline of the Sharq newspaper " Power rally in the

Strait of Hormuz. "

The strait, through which passes 40 percent of the world's oil, is in the

territorial waters of Iran and Oman, but under international maritime law it is

considered open to international navigation and shutting it down would be seen

as an act of war.

The U.S. Fifth Fleet said it would not allow any disruption of traffic along the

world's most important oil route, which connects the biggest Gulf oil producers,

including Saudi Arabia, with the Gulf of Oman and the Arabian Sea. At its

narrowest point, it is 21 miles across.

Analysts say choking off the strait would hurt Iran's oil-dependent economy,

particularly when OPEC member Saudi Arabia has pledged to compensate for any

shortages in Iran's crude exports to Europe.

CARROT AND STICK POLICY

Russia and China, Iran's main allies, have protected it from stronger U.N.

sanctions. They too have no interest in seeing oil traffic disrupted in the Gulf

and favor resolving the nuclear dispute through talks.

Iranian media reported that Jalili would write to Ashton to express Tehran's

readiness for fresh nuclear talks with major powers.

" Jalili will soon send a letter to Ashton over the format of

negotiations ... then fresh talks will take place with major powers, " said

Iran's ambassador to Germany Alireza Sheikh Attar, the semi-official Mehr news

agency reported.

Talks between Iran and the five permanent members of the U.N. Security Council,

the United States, Russia, China, Britain and France, plus Germany (P5+1)

stalled in January.

Iran has to date ignored U.N. Security Council demands to halt its sensitive

nuclear work, and the threat to close the strait has been seen as a clear sign

of the clerical establishment's concern at the prospect of harsher sanctions.

Tehran has in the past threatened to close the waterway only if attacked by the

United States and Israel.

" Raising the volume on threats by Iranians clearly shows that they are worried

about losing petrodollars on which the country's economy depends by more than 60

percent, " said a senior western diplomat in Tehran, who asked not to be named.

Iranians concerned about a military conflict have shifted to gold and foreign

exchange as a hedge. Iran's currency has nosedived in recent weeks because of

withdrawals from savings accounts by ordinary Iranians.

The price of staples has increased by up to 40 percent in recent months, critics

blaming President Mahmoud Ahmadinejad's economic and foreign policies for the

hardship caused by the country's increasing isolation.

(Additional reporting by Hossein Jaseb, Hashem Kalantari and Ramin Mostafavi;

Writing by Parisa Hafezi; Editing by Jon Boyle)