Tehran (Platts)--5Nov2012/908 am EST/1408 GMT

Iranian oil minister Rostam Ghasemi renewed Monday a threat to halt all oil exports if the West imposes more sanctions against Tehran, oil ministry news service Shana reported.

"If the West increases sanction pressures, the Islamic republic, in reaction, will revise the trend of its crude oil exports," Ghasemi was quoted as saying. "Iran is not willing that such a thing happens in the world."

"Elimination of Iran's oil from the market will disturb the supply and demand balance in the world's markets and under such conditions instability and oil supply shortage in the world's markets will escalate," he added.

"The absence of Iran's oil from world markets will have an impact on prices and people will suffer. But their governments will be responsible for that," Ghasemi said.

But he said the country was taking measures to bypass the sanctions and that its oil exports had improved in recent months.

Ghasemi first threatened to halt all oil exports by the OPEC member state on the sidelines of the World Energy Forum in Dubai October 24 if the US stepped up pressure on Tehran over its nuclear program.

On Sunday, he was quoted by students' news agency ISNA as saying that while he hoped the nuclear crisis would be resolved through dialog, Iran would withhold oil exports to "part of the industrial world" if further sanctions were imposed.

"Despite the latest pressures to impose sanctions on Iran's oil, we have succeeded to pass through them by special measures," he said, adding that the country's oil exports had been improving in recent months.

Ghasemi said in Dubai that oil production was running at 4 million b/d but provided no figures for exports, saying much of the oil being produced was used domestically as refining capacity had expanded.

Iranian officials have given widely differing figures for Iranian oil production and exports since the latest round of EU and US sanctions came fully into effect in July. A prominent member of Iran's parliament was quoted Sunday as saying that the country's oil exports had fallen to 1.03 million b/d compared with predictions that Iranian exports would average 2.5 million b/d, the Donya-e Eqtesad newspaper reported Sunday.

"Currently, the oil sale is 1.03 million barrels per day. Our prediction was 2.5 million barrels," Gholamreza Mesbahi Moghaddam, head of the parliament's planning and budget committee, was quoted as saying at a provincial meeting on Thursday.

He predicted that Iran would post a $60.35 billion budget deficit in the current Iranian year that started March 19 as a result of lower oil exports, the country's economic lifeline.

The semi-official Fars news agency quoted an unnamed oil ministry source as saying Sunday that Iran produced 3.1 million b/d of crude oil last month. A Platts survey of OPEC's production for September estimated Iran's output at 2.7 million b/d.

Secondary sources estimate that Iran's oil exports have fallen by 1 million-1.5 million b/d in recent months from an average 2.5 million b/d in 2011.

On October 2, President Mahmoud Ahmadinejad told a press conference that he was hopeful the country, which relies on crude oil sales for the majority of its foreign revenues, would not face a cash shortage although he confirmed that oil income had fallen as a result of the sanctions.

"We will continue with the current income and God willing we will move forward without facing a budget deficit," Ahmadinejad said when asked whether an OPEC basket price around $110/barrel would be enough to meet budgetary requirements.

However, Mesbahi Moghaddam provided figures showing a budget shortfall. "The general budget of the country in the current year was 164,000 billion tomans [$133.76 billion]... our prediction is that under the current situation 90,000 billion tomans [$73.4 billion] of the money will be realized," Mesbahi Moghaddam said. Oil revenues so far this year have totaled $30 billion, he added.

"The country's economic situation is not favorable and given the decreased oil income, we face economic problems and we should adjust to these conditions," he said, adding that the government was making light of the impact of the sanctions.

The US and the European Union have piled on sanctions against Iran since the start of the year in an effort to starve the Islamic Republic of revenues that it believes are being used to fund a covert atomic weapons program.

Tehran has insisted that its nuclear program is peaceful and designed to generate electricity and for medical use.

The EU imposed a ban on the import of Iranian oil from July 1 and recently extended the ban to gas imports as well as a host of other sanctions targeting the energy and financial sectors.

The US has adopted sanctions that effectively resulted in lower Iranian oil exports by threatening to penalize any country or entity that deals with Iran's Central Bank unless they cut their imports from Iran. --Aresu Eqbali, newsdesk@platts.com --Edited by Kate Dourian, kate_dourian@platts.com

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