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Iran plans new oil storage, airline hikes fares

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November 26, 2012 09:37 AM EST | AP

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TEHRAN, Iran — Iran is planning to build new oil storage facilities so it can store more of the fuel it is having a hard time selling due to Western sanctions over its disputed nuclear program.

State-run Press TV quoted Mahmoud Zirakchianzadeh, Director of the Iranian Offshore Oil Company, as saying nearly 8.1 million barrels will be added to Iran's crude oil storage capacity by the next summer.

Iran has the world's third largest proven oil reserves and was OPEC's second largest exporter, but sanctions have stymied the flow since summer. It slipped to the cartel's third place in July after the European Union imposed oil sanctions to force Tehran to stop its uranium enrichment program.

According to the International Energy Agency, Iran's oil exports plunged to 1 million barrels a day in July, after standing at the 1.74-million-barrel mark a month earlier. Crude oil exports account for about 80 percent of the country's foreign revenue.

The U.S. and its allies accuse Iran of using its nuclear program as a cover to develop nuclear weapons. Iran has denied the charges, saying its program is geared toward generating electricity and producing radioisotopes to treat cancer patients.

In another sign sanctions are biting, Iran's national airline has nearly doubled prices on plane tickets for some foreign destinations. Iran Air spokesman Shahrokh Nooshabadi was quoted by local media as saying the carrier raised prices by up to 90 percent because of higher fuel prices and the plunging value of the rial against foreign currencies.

Iranian media say other airline companies have also hiked prices on flights abroad. In November, prices for Iranian domestic flights by Iran Air rose some 70 percent.