LONDON Dec 13 (Reuters) - Iran could lose almost a quarter of its oil production capacity if tight global sanctions are slapped on the country, the West's energy watchdog said on Tuesday while questioning the efficiency of a possible embargo imposed only by the European Union. "A broader global embargo or wider-ranging restrictions on dealings with Iran's Central Bank might lead to a more significant rise in crude prices, but arguably might more effectively limit Iranian revenues," the International Energy Agency said in its monthly report. It said EU-wide sanctions would force Mediterranean refiners to face higher crude prices from Saudi Arabia, Iraq and Russia, putting them under further competitive pressure as Asian buyers would obtain more Iranian oil at discounted prices. Tighter sanctions may result in Iranian production capacity declining by 890,000 barrels per day (bpd) to just under 3 million bpd by 2016, the IEA said. The latest proposals by the West would strengthen U.S. and EU sanctions already in place that target Iran's upstream oil and gas sector by closing a loophole that will bar exports of oil related equipment, drilling rigs or engineering services, the IEA said. (Reporting by Dmitry Zhdannikov)

Source