* Turkish, Indian officials say to stick to Iranian oil
* Iranian oil minister says exports unchanged from 2011
* U.S., IEA acknowledge Saudi spare capacity thin
By Dmitry Zhdannikov and Humeyra Pamuk
KUWAIT, March 14 (Reuters) - Iranian oil officials show no signs of alarm as oil markets fret about a loss of supply from their country due to international sanctions, saying their Asian customers remain loyal and there is no easy and quick substitute for their crude.
They say the West is unrealistic to hope that Saudi Arabia - the only country in the world that can quickly boost supplies - will help replace the lion’s share of Iranian barrels. They also judge that Western politicians, heading for re-election this year, lack the courage to face a further rally in oil prices.
“Don’t you think we haven’t made our calculations? All the Saudis can probably do is to push output just a bit higher,” an Iranian oil official said on the sidelines of the International Energy Forum, the biggest gathering of oil producing and consuming nations.
The comment, even if it is just an opinion and part of Tehran’s attempts to pour scorn on Western sanctions, goes to the heart of the main concern in the oil markets: will Saudi Arabia be able to fill the supply gap if the stand-off over Tehran’s nuclear programme escalates?
Oil prices have rallied to above $128 per barrel this year, just $20 short of an all-time high, on worries over Iran and even before sanctions, which will come into force from July, have started reducing Iranian exports.
The rally could stall global economic recovery and has become a major headache for politicians around the world, including U.S. President Barack Obama, seeking re-election this year and facing public anger over high gasoline prices.
A European Union embargo on Iranian crude takes effect on July 1. U.S. and European financial sanctions have made it more difficult for other importing nations to process payments.
Iran produces almost 3.5 million barrels per day and exports around 2.2 million bpd to world markets, or around 2.5 percent of global demand.
Saudi Arabia, the top oil exporter, has said it stands ready to fill any oil supply gap. But with its output already running close to record highs of about 10 million bpd, the industry questions whether it can increase production to its declared capacity of 12.5 million bpd.
U.S. deputy energy secretary Daniel Poneman and Maria van der Hoeven, who heads the energy adviser to industrialised nations, the International Energy Agency, both said global spare capacity was tight.
Veterans from the Organization of the Petroleum Exporting Countries (OPEC) also see spare capacity as being limited now.
“If at the moment spare capacity is a little bit on the low side, I think in a year or two you will see it back above average,” Shihab Eldin, OPEC’s former head of research, said.
While the Iranian stand-off was barely mentioned in panel discussions at the International Energy Forum in Kuwait, Tehran’s oil minister, Rostam Qasemi, packed his agenda with meetings with the Turkish, Indian, Venezuelan, Algerian, Omani and South African delegations.
“You know that the world cannot live without Iranian crude,” Qasemi said, adding that Iranian oil exports remain unchanged from 2011 even after major companies Total and Royal Dutch Shell stopped buying crude as other customers stepped in.
The European Union will have to abandon purchases of some 600,000 bpd of Iranian oil from July and market insiders have speculated Iran will try to reroute those volumes to its main customers in Asia and Turkey.
China, India, South Korea and Japan and Turkey face increased U.S. pressure to cut purchases, to win waivers from Washington to keep buying smaller volumes.
The pressure is meeting resistance.
“We are the border country and we are getting almost half of our supplies from Iran,” said Turkey’s Energy Minister Taner Yildiz. “So we have a different status from other countries, such as Britain or France, whose Iranian crude purchases only make up one or two percent of their total”.
“As of today, we’re continuing to buy from Iran and we will continue to buy from Iran,” he said.
Indian officials outlined a similar stance.
“We haven’t reduced much. Some refiners are buying a couple of cargoes less but Iranian crude is cheap. It is difficult to replace that...since there are no UN sanctions on Iran, we don’t plan to cut,” said Sudhir Bhargava, secretary at the petroleum ministry.
Western oil executives also predicted Iranian oil would be leaking out of the country regardless of sanctions.
“There will always be outlets for Iranian crude,” said Total’s chief executive, Christophe de Margerie, whose company had to suspend imports of 200,000 bpd of Iranian oil in the past months because of sanctions.
The energy minister of Lebanon, Gebran Bassil, said the sanctions will make Iran more innovative in selling oil.
“The Iranian are now opening the markets towards Asia,” he said. “They will manage to adapt in the medium-term and in the long-term they will get more creative”. (Reporting by Dmitry Zhdannikov, Humeyra Pamuk, Amena Bakr, Peg Mackey and Sylvia Westall; Writing by Dmitry Zhdannikov; Editing by Anthony Barker)