Iran won't use oil as weapon in nuclear row - Mottaki

Iranian Foreign Minister Manouchehr Mottaki said yesterday that Tehran would not use oil as a weapon in the row over its nuclear programme and that it was open to compromise in negotiations.

But the head of the UN nuclear watchdog, Mohamed ElBaradei, said it was up to the Iranians to create the conditions for a resumption of collapsed negotiations aimed at resolving its nuclear stand-off with the West.

Mr Mottaki stressed that Iran would not give up its right to develop nuclear energy for civilian use, which he said was enshrined in the nuclear Non-Proliferation Treaty (NPT).

"We're not going to use energy as a political leverage," Mr Mottaki told reporters in Geneva, where he is on a two-day visit.

The stand-off with the UN Security Council and the International Atomic Energy Agency (IAEA) over its nuclear programme has raised fears that Iran, the world's fourth-largest oil exporter, might retaliate by cutting off its oil supply.

Oil markets reacted to Mr Mottaki's comments, with the price of US light crude dropping 78c to $66.37 per barrel by 1421 GMT, after rallying four per cent in course of the week.

Iran says it is only interested in peaceful nuclear power and does not want atomic weapons. But it concealed sensitive atomic fuel activities from the IAEA for nearly 20 years.

It resumed small-scale enrichment this year after talks with France, Britain and Germany on a permament suspension collapsed.

The Security Council on Wednesday gave Iran 30 days to halt enrichment and asked for a report from the IAEA, the UN's nuclear watchdog in Vienna, on whether Tehran had done so.

Asked would happen at the end of the period, Mr Mottaki said:

"It is still possible that there can be a compromise. But if you are referring to the possibility that Iran is going to give up its legal rights, that is just not going to happen."

"We're not at the moment talking about industrial production, therefore we can negotiate," he added, speaking through an interpreter. He gave no details.

Mr Mottaki dismissed British suggestions that Iran could face UN sanctions if it failed to suspend uranium enrichment, which can produce fuel for nuclear power stations or atomic bombs.