The news yesterday from Cairo, once again, was ominous. This time Iran warned its oil-producing neighbors in the Persian Gulf against boosting production to offset any potential decrease that might occur when and if Iran drops its exports in the event of an embargo.

Iran does not want to see oil shipments from Saudi Arabia, for instance, increase at Iran's expense. Saudi Arabia's oil minister was quoted this weekend denying that his country's earlier pledges to boost output as needed to meet global demand was linked to a potential siphoning of Iranian crude from the market because of sanctions.

According to the Associated Press, Mohammad Ali Khatibi, Iran's OPEC governor, was quoted Sunday as saying that attempts by Gulf nations to replace Iran's output with their own would make them an "accomplice in further events."
"These acts will not be considered friendly," Khatibi said, adding that if the Arab producers "apply prudence and announce that they will not participate in replacing oil, then adventurist countries will not show interest," in the embargo.

Oil Minister Ali Al-Naimi appeared to try to further clarify the country's position in comments published Sunday in the daily Al-Ektisadiyah newspaper. And he did his best to calm Iran with semantics.

"We never said that Saudi Arabia is trying to compensate for Iranian oil in the case that sanctions (are enacted)," Al-Naimi was quoted as saying. "We said that we are prepared to meet the increase in global demand as a result of any circumstances."

The Associated Press also reported that while momentum appears to be building for the sanctions by the West, China, another major buyer of Iranian oil, has come out against the measures. Most European nations support the sanctions but Greece, Italy and Spain say they'd like to postpone any actions for at least 6 months...