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Rice says 'wait and see' on Iran oil threat hint

Written by: Staff
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WASHINGTON, June 4 (Reuters) US Secretary of State Condoleezza Rice took a wait-and-see approach toward Iran's next moves in a dispute over its nuclear ambitions, after the country's top religious leader suggested today it could disrupt oil supplies if pushed.

''Well, I think we shouldn't place too much emphasis on a move of this kind; after all Iran is very dependent on oil revenue,'' Rice told Fox News today.

Asked whether Iranian leaders had already rejected a six-nation diplomatic initiative, by insisting there be no preconditions for new talks on their nuclear program, Rice said Iran had not yet received the proposal and would need time to assess it.

''It's sort of a major crossroads for Iran, and it's perhaps not surprising that they will need a little bit of time to look at it,'' she told Fox News.

Washington has offered to join European countries in talks with Iran about the nuclear program, but says Iran must first suspend uranium enrichment. Iran has so far said enrichment is a national right.

The timetable for a decision by Iran must not be endless, Rice said on CNN's ''Late Edition.'' But in the meantime, ''We're not going to react to every statement that comes out of Iran,'' she said.

She said Iran had a path to resolve the impasse but warned ''the international community is committed to a second path should that first path not work.'' Ayatollah Ali Khamenei, Iran's supreme leader, said earlier today that if the United States makes a ''wrong move'' toward the world's fourth-largest oil exporter, energy flows in the region would be endangered.

Iranian officials have in the past ruled out using oil as a weapon in the nuclear standoff.

His remarks, likely to unsettle wary oil markets, come days before EU foreign policy chief Javier Solana is due to deliver a package of incentives agreed by six world powers and designed to persuade Iran to abandon plans to make nuclear fuel.

Washington accuses Tehran of seeking to develop atomic weapons under cover of a civilian nuclear power program, a charge Tehran denies. While calling for a diplomatic solution, it has refused to rule out military action.

The incentives being offered in the new international initiative have not been publicly announced, but diplomats are considering an offer of nuclear reactors as well as security guarantees.

International oil prices have stayed near record highs, above 70 dollars a barrel, partly because of fears Iranian exports could be disrupted. Iran produces about 3.85 million barrels of oil a day.

REUTERS SRS RAI2228

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