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(RNN) – Reports that Iran had shut off oil supplies to Europe and will ramp up uranium production is putting pressure on already tense relations between the country and the U.S. and Israel.
The Middle Eastern country - historically at odds with the West and Israel - announced Wednesday it intends to begin production of yellowcake, a chemically treated form of uranium ore, possibly to be used in nuclear weapons.
Iranian President Mahmoud Ahmadinejad, clad in a white coat, said a uranium enrichment plant is "fully operational," CNN reported. That would put Iran one step closer to the manufacture of nuclear war heads capable of reaching at least Israel, if not the U.S.
News of the facility was first broadcast by Iran's state TV. However, Irans Foreign Ministry spokesman Haran Tajik said later that supplies had not been cut, merely the six countries had been threatened with a shut-off.
Iran has been under harsh sanctions against its energy and business sectors, all designed to coerce the country into complying with the Atomic Energy Agency's demands to cease uranium production.
A security consulting firm that provides international intelligence to corporations and businesses said in a report Wednesday that Israel is looking at all options in regards to Iran's nuclear efforts.
"In the event Iran continues to defy the international community, an overt strike by the Israeli military on Iranian nuclear facilities is likely within the next six months," according to the statement from MSA.
In response to the sanctions, Iran announced Wednesday it would cut off oil supplies to six European countries: the Netherlands, Spain, Italy, France, Greece and Portugal.
The move had been expected since late January, when the European Union announced it would gradually phase out the purchase of oil from Iran.
The shut off - or threatened shut off - would be an abrupt halt to those supplies to Europe, and comes as tensions between Iran and Israel increase.
Israel has accused Iran of orchestrating two attacks Monday on embassy vehicles abroad. Four people were killed by a car bomb near the Israeli embassy in New Delhi, India. A second car bomb was found on a vehicle outside the Israeli embassy in Tbilisi, Georgia.
"Currently, Israel is continuing to weigh its potential attack options, knowing full well that Iranian officials claim they will retaliate if the action is carried through," according to MSA.
Israel and U.S. are committed allies, often supporting each other's military operations in the Middle East. The U.S. is one of the largest financial supporters of the state of Israel. There is debate as to whether the U.S. should take the lead in striking Iran's nuclear facilities.
"There is certainty that the United States will align with Israel and other allies in the Gulf on how to proceed," the statement from MSA said.
The IAEA is scheduled to meet again in Tehran on Feb. 20 and Feb. 21 in order to address Iran's nuclear capabilities and "outstanding issues.
"The Agency is committed to intensifying dialogue. It remains essential to make progress on substantive issues," said IAEA Director General Yukiya Amano in a Feb. 1 news release.
Iran exports 2.2 billion barrels of oil per day, according to the U.S. Energy Information Administration. Approximately 20 percent of that goes to the European Union. China is Iran's single largest customers, also receiving 20 percent of its exports.
Oil was trading at $100 per barrel after Wednesday's announcement.
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