TEHRAN, Iran - President Mahmoud Ahmadinejad on Tuesday slammed Western sanctions on Iran's oil sector as a "ridiculous" move that seeks to deprive the world of energy resources at a time when demand is swelling. "It's very funny.

They (the West) use oil as a political weapon against a country that is an oil producer itself," Ahmadinejad said at the inauguration of a new fuel-making unit at a Tehran oil refinery. "This is among the most ridiculous behaviors." Iran's leaders have repeatedly insisted the country can withstand the international sanctions imposed in efforts to curb Tehran's nuclear program.

But the rash of defensive comments by Ahmadinejad and others — including warnings against local media reports on the sanctions fallout — suggest deepening worries about a sustained drop in vital oil revenue. The European Union — which once accounted for around 18 per cent of Iran's oil exports — stopped all contracts with Tehran on July 1.

Meanwhile, the U.S. is pressuring Iran's key Asian oil customers such as India and South Korea to look to the Gulf and other suppliers. "The ones that need oil use what they need as a tool to pressure (others)," Ahmadinejad said, calling it "political warfare."

Iran relies on oil for some 80 per cent of its foreign revenue. "It takes a lot of insolence to be like that," he added in the speech broadcast on state TV. Ahmadinejad also urged for foreign investment in Iran's oil and petrochemical industries, but many companies remain wary of running afoul with Washington over sanctions.

Ahmadinejad's remarks came after Congress pressed ahead late Monday with a new package of sanctions on Iran, expanding financial penalties and targeting Tehran's energy and shipping sectors in the hope that economic pressure will undercuts the country's suspected nuclear weapons program.

Iran denies it seeks atomic weapons Also Monday, U.S. Defence Secretary Leon Panetta acknowledged that increasingly stiff international sanctions have yet to compel Iran to give up its nuclear ambitions. But he argued that more pressure eventually would lead Iran to "do what's right."

In Tehran, Iran's oil minister said there is no need for an additional OPEC meeting to discuss oil prices. A report by the semiofficial Mehr news agency quoted Rostam Ghasemi as saying the current price does not merit an extraordinary meeting of the oil-exporting cartel. Ghasemi said oil prices $100 per barrel seem "fair." Benchmark crude was below $89 a barrel Tuesday in electronic trading on the New York Mercantile Exchange. (AFP)