The world could handle a cutoff in oil exports from Iran, a US State Department official said on Tuesday. "We do have capabilities in place to handle a potential shut-off of these flows should they occur," said Paul Simons, deputy assistant secretary for economic and business affairs at the State Department, speaking before the Joint Economic Committee of the US Congress.
"The United States and other members of the global energy community are certainly prepared if the situation goes that way," Simons said, referring to strategic petroleum stockpiles controlled by the United States and the other 25 members of the International Energy Agency.
A dispute between Opec nation Iran and the West over Tehran's atomic ambitions have helped drive prices to record highs above $78 a barrel as investors fear potential supply disruptions from the world's fourth-biggest crude exporter.
Simons declined to discuss the likelihood of such a disruption, or how vulnerable Iran might be to potential sanctions that could be imposed by the United Nations Security Council.
Simons affirmed that Iran imports a "large chunk" of its refined products, but would not address whether limiting Iran's gasoline supplies was a viable sanctions option for US policymakers.