US official endorses oil embargo against Iran. On Gulf visit calls boycott a moral issue
Doha, Qatar — The United States has contacted Japan and other US allies in an effort to organize an international boycott of Iranian oil. US Energy Secretary John Herrington, now on a Gulf tour, indicated that the Reagan administration is seeking international support for such an embargo but that no responses have been received yet.
The secretary did not name nations contacted other than Japan.
But he added during an interview, ``A lot of countries are going to have to look at this. The oil market is a world market. It is not just Japan or the US.''
The Reagan administration has yet to announce its formal position on an oil embargo. Secretary Herrington says that although boycotts usually don't have much effect, this one might work if enough countries participated.
``The history is not good on boycotts,'' he says.``But my feeling is that if a number of consuming countries join in ... it could have an impact.''
``I think this one is something we have to do. It is a moral position as much as an economic position,'' the secretary said.
The US is already advocating within the United Nations Security Council a worldwide arms embargo of Iran for its reluctance to accept UN efforts to peacefully end the Iran-Iraq war.
In addition, both the US Senate and House of Representatives voted this week to enact an American trade embargo - including oil - against Iran. The measure must be approved by President Reagan.
The moves in Congress followed reports that last July US oil firms purchased $347 million worth of Iranian oil, making the US the third largest buyer of Iranian crude.
The concern in Congress was that US funds used to buy Iran's oil would be spent by Iranian Revolutionary Guards to purchase guns and bombs that could eventually be used against the US Navy in the tense Gulf.
``My personal feeling is that Americans would rather walk to work than use Iranian oil, and therefore a boycott looks like a certainty to me,'' Mr. Herrington says.
The secretary's comments came as tension remained high in the Gulf as both Iran and Iraq continued their attacks. Iraq reported Wednesday that its warplanes hit a ship in Iranian waters. And in the southern Gulf, a Saudi tanker was attacked off Dubai by three Iranian speed boats firing rocket-propelled grenades and antiarmour missiles. No injuries were reported.
Herrington said during a news conference that his eight-nation Mideast tour was aimed at demonstrating US resolve to ``stand by our friends in the Gulf.'' He added that his discussions with Gulf leaders have centered on ways of enhancing energy security, such as reducing dependence on oil transported to world markets via Gulf sea lanes.
``Pipelines are very much on everyone's mind right now,'' Herrington says.
One of Iraq's main advantages over Iran in the on-going Gulf war has been its network of oil pipelines that carry more than 2 million barrels of Iraqi crude oil a day to export terminals in the Red Sea and the Mediterranean Sea.
Iran, on the other hand, remains vulnerable to Iraqi air attacks against tankers in the Gulf carrying Iranian oil to world markets. Iran is currently discussing converting an unused gas pipeline to the Soviet Union into a oil export line. The project would provide an alternative to sending oil out through the Gulf and help protect Iranian exports from Iraqi raids.
The neighboring Gulf states are also considering various pipeline plans to reduce their dependence on oil exports through dangerous Gulf waters.
Despite its large naval presence and high-profile attempt to maintain safe passage in the Gulf for reflagged Kuwaiti tankers, the US is well-insulated from a possible future oil shock in the Gulf, according to Herrington.
In the event of an oil cutoff either from widespread war in the region or a closure of the Strait of Hormuz, the US would draw from its 530 million-barrel strategic petroleum reserve. The secretary says the reserve could compensate for a total cutoff of oil imports from all regions to the US for 120 days, if necessary.
``One-hundred and twenty days protection would be more protection than would be necessary under any oil crisis that we have seen in history so far,'' Herrington says.
US dependence on Gulf oil is currently low (roughly 4 percent of oil imports). As a result, the strategic petroleum reserve could compensate for a total cutoff of Gulf oil for more than a year, Herrington adds.
The strategic reserve has long been a sore point with Gulf oil ministers, who see stockpiling as a potential means of undermining oil prices.
``What we are looking at is moderation of short-term shocks,'' Herrington says. He noted that while the US government does not support the concept of cartels, such as OPEC, the US has never had a policy of attempting to influence OPEC pricing. ``Our policy is to let the market work to whatever extent possible.''