"TEHRAN, Iran - A defiant Iran announced Friday it has begun pulling its foreign currency accounts out of European banks to protect its assets from possible U.N. sanctions over its nuclear program.

As analysts estimated the amount of those funds at up to $50 billion, Iran also called for a reduction in

OPEC oil production — raising the possibility that the country would deploy its oil prowess in its standoff with the West.

Underlining his challenging stance, Iran's hard-line president, Mahmoud Ahmadinejad, held a meeting in Damascus, Syria, on Friday with leaders from the Palestinian militant groups Hamas and Islamic Jihad.

The meeting came a day after an Islamic Jihad suicide bomber blew himself up in a Tel Aviv restaurant, wounding 20 people. Israel accused Iran and Syria of being behind the attack, a charge both countries denied.

The currency withdrawal signaled that Iran was willing to weather U.N. punishment rather than abandon its nuclear ambitions, which the United States and some in Europe say are to develop atomic weapons. Tehran insists its program is for peaceful purposes only.

Friday's move also deprives Europe of an important lever to influence Iran and could weaken its resolve to push Iran to give up key parts of its nuclear program, analysts said.

Even more daunting is the possibility that Iran — which has the world's fourth largest reserves of oil — could try to put a squeeze on petroleum.

Crude oil prices rose above $67 Friday amid concern over the Iranian nuclear dispute, unrest in Nigeria and al-Qaida's threat of terrorist attacks in the United States.

It is feared that oil prices could surge much higher — even beyond $100 a barrel — if the U.N. Security Council imposes trade sanctions on Iran over its nuclear activities.

Iran's Oil Ministry confirmed Friday that the country is pushing for the Organization of Petroleum Exporting Countries to cut its overall production.

Ministry spokeswoman Souzan Shakourzadeh told The Associated Press the move was connected to the expected fall in demand for oil in the second quarter of 2006 and not to the nuclear dispute. She could not say how large a cut Iran is seeking.

Iran pumps about 4 million barrels of oil a day, making it the second largest producer in OPEC after Saudi Arabia.

The announcement of the withdrawal of Iran's foreign currency accounts from Europe came from the country's Central Bank governor, Ebrahim Sheibani.

"We transfer the foreign exchange reserves to wherever we deem fit," Sheibani was quoted as saying by the semiofficial Iranian Students News Agency. He would not say how much money was involved or where Iran would move it.

It was not immediately clear whether Iran's investments and property in Europe would also be affected.

Iran's assets in the United States were frozen shortly after the 1979 revolution that toppled the pro-Western Shah Mohammad Reza Pahlavi and installed a clerical regime.
As analysts estimated the amount of those funds at up to $50 billion, Iran also called for a reduction in

OPEC oil production — raising the possibility that the country would deploy its oil prowess in its standoff with the West.
Underlining his challenging stance, Iran's hard-line president, Mahmoud Ahmadinejad, held a meeting in Damascus,"
http://news.yahoo.com

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Classic American liberal

Once they strarted seeing it European nations should have begun freezing their assets.

Indecisivness though is the hallmark in this entire thing..well with everyone but Iran.

Irans very decisive in this thing it knows what it wants and it going to go for it regardless of whom doesn't like it.

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"The heart of the wise inclines to the right, but the heart of the fool to the left."
Ecclesiastes 10:2 (NIV)

Why haven't we already launched air strikes to destroy Iran's nuclear program? I would have done that months ago.

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"I am a Tory Anarchist. I should like every one to go about doing just as he pleased- short of altering any of the things to which I have grown accustomed." (Max Beerbohm)

You WARMONGER you!

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"The heart of the wise inclines to the right, but the heart of the fool to the left."
Ecclesiastes 10:2 (NIV)

Actually, this is good. It reduces European support for Iran, because Europe no longer has their money. And cutting oil production is good, too, because it decreases the pain (for us) of bombing their oil facilities.

I really, really like it when obnoxious countries go out of their way to paint a bullseye on themselves. Makes decision making and consensus-gathering so much easier.

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Man up.

Yes I agree.

What bothers me is that Iran must know what they are doing. It all seems like a trap of some kind.

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Classic American liberal

I think you overestimate the Iranians.

They're either confident of their ability to defend themselves against air strikes -- in which case, I think they're mistaken. Or they're confident that nobody will do anything and it's all bluff and bluster -- in which case, I also think they are mistaken.

I categorically do *not* think invading them is a good idea. But we can hit them very hard in other ways -- their nuclear facilities, military facilities, oil facilities, the like. Most of their oil exports go through the Persian Gulf, so a blockade would be easy and devastating: Oil accounts for about half their governmental budget and about 20% of their GDP.

If it comes to a confrontation, Iran will lose.

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Man up.

To stop this problem.

1. Issue an embargo through the UN. Yes, this takes time, and as much as I dislike the UN I think it's important to get everyone on board with this.
The downside is that the decrease of Iranian oil on the world market will seriously raise gas prices, which would be unpopular.

2. Order air strikes on any and all suspected nuclear facilities and uranium enrichment capable facilities. This would also be unpopular, but it beats a ground war, and would probably be much more effective. The trick would be to figure out where the sites are (though I suspect we have a pretty idea of where most of them are located).

BTW, Iraq war supporters should stop and take note of all the Iraq war opponents who support tough action against Iran. That's because most Iraq war opponents, myself included, are not antiwar per se; we're just opposed to stupid, wasteful wars, such as Iraq.

Iran fulfills all the requirements for action: A bad actor, a clear danger and exhausting diplomacy before resorting to military force, while building internal as well as international consensus for military action. And that consensus, if we have any sense, steers clear of invasion and occupation -- which should be a last resort among last resorts.

Iraq, you may notice, fulfilled just one requirement -- a bad actor. One who was already in a box besides. And to deal with this nonproblem we chose the last resort among last resorts. Brilliant.

I hope somebody in high places notices the difference.

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Man up.