The head of Iran's central bank warned that oil prices will rise above $150 a barrel if economic sanctions against the Islamic theocracy are not lifted soon.
“Iran can have an effect on world energy and fuel. Fuel prices will go up dramatically,” Mahmoud Bahmani said in a recent interview with The Washington Times at a meeting of the International Monetary Fund in Washington.
“If sanctions are not removed, particularly sanctions against banks and other economic sanctions, the price of oil will go above $150 a barrel.”
A top Federal Reserve official and other economists predict that such a price could drive gasoline prices skyrocketing and throw the U.S. and Europe into another recession. The last time oil came close to that price was in the global recession that began in 2008, when a barrel of crude hit more than $147 in July of that year.
Mr. Bahmani’s veiled threat prompted a leading Republican senator to compare the country’s central bank officials to “bankers to the Nazis.”
“It should be the policy of the United States to bankrupt the central bank of Iran,” said Sen. Mark Kirk of Illinois.
Mr. Kirk — a member of the Senate Banking, Housing and Urban Affairs subcommittee on security, international trade and finance — said he is urging the Obama administration to investigate the bank’s suspected links to “terrorism and human rights abuses.”
Iran's central bank is the “21st-century equivalent of the bankers to the Nazis,” said Mr. Kirk, who earlier served five terms in the House as a member of the Appropriations subcommittee on homeland security.
Iran is the world’s third-leading oil exporter, but it lacks the capacity to refine crude petroleum into gasoline. It is a member of the Organization of the Petroleum Exporting Countries, a cartel that sets production limits for most oil exporters. The country also has the world’s second-largest known reserves of natural gas.
Congress last year passed the Comprehensive Iran Sanctions, Accountability and Divestment Act, a law that slapped severe sanctions on companies that aid Iran’s petroleum sector.
The legislation came after a fourth round of U.N. Security Council sanctions and was followed by the European Union’s own supplementary sanctions package. Last week, the EU imposed an asset-freeze and travel ban on 32 Iranian officials accused of severe human rights abuses.
The U.S. Treasury Department also sought to isolate Iran’s banking sector from the international economy. It cited major Iranian banks, like Bank Melli, for supporting terrorism and aiding the country’s nuclear program, although Iran's central bank has escaped sanction.
Mr. Bahmani dismissed U.S. threats of designating the Iranian central bank as a financier of terrorism.
“Iran has the highest standards in fighting money laundering and terrorism,” he said.
But the Financial Action Task Force, an international watchdog group, last year ranked Iran at the top of a list of nations financing terrorism and laundering money.
Mr. Bahmani also claimed that the current financial sanctions against other Iranian banks have had “no effect” on the country’s cash flow.
“We are stronger than before,” he said of the Iranian economy.
However, Suzanne Maloney, an Iran specialist at the Washington-based Brookings Institution, reported that sanctions have taken a bite out of a nation already beset with a “wide range of economic problems.”
“Sanctions have raised the cost, time and inconvenience of almost all international transactions [for Iran],” she reported in February.