TEHRAN/ABU DHABI: Tensions soared Monday between Saudi Arabia and Iran as Riyadh said it would make up for any shortfalls caused by an embargo on Iranian crude sales, despite Tehran’s warning to its Gulf Arab neighbors not to pump oil to compensate for any cuts on its exports. Signaling concern over Iran’s threat to close down the strategic Strait of Hormuz, a move that would affect their economies, the United Arab Emirates and Iraq Monday called for an end to the escalating tensions in the Gulf.

“Iraq is against escalation and against dealing with these differences using military force, but with dialogue,” Foreign Minister Hoshyar Zebari told reporters at a joint news conference with his Emirati counterpart in Abu Dhabi.

“There is a major confidence crisis with Iran and we also see ourselves as a country that overlooks the Gulf and is definitely affected by tension and escalation,” Zebari said, adding 90 percent of Iraqi oil exports pass through Hormuz.

Emirati Foreign Minister Sheikh Abdullah bin Zayed al-Nahayan echoed Zebari’s fears.

“Any talk on waterways and especially Hormuz has an effect on us,” Sheikh Abdullah said. “We will do everything possible to defuse the crisis.”

“I don’t think the escalation will serve the region or the markets’ stability,” he added.

Brent crude rose above $111, as concerns about global oil supplies if sanctions freeze OPEC’s second biggest producer out of the market or push it toward military conflict, while Saudi Arabia said it would work to stabilize the price at $100.

Israel, which has often said it could strike Iran to stop it developing nuclear weapons, called for tough new sanctions against Tehran to stop its nuclear program.

But it said that for sanctions to work effectively, all countries must join in – a subtle swipe at Russia and China which oppose the latest Western moves.

“Iran must be stopped and the good news is that Iran can be stopped with economic and diplomatic means once the entire international community gathers together with effective sanctions,” Deputy Foreign Minister Danny Ayalon told the BBC.

Tehran has been under a growing array of U.N. and unilateral sanctions for years, but a U.S. bill that President Barack Obama signed into law on New Year’s Eve went far further than previously, aiming to stop countries paying for Iranian oil.

The European Union – Iran’s second biggest oil customer after China, buying some 450,000 barrels per day (bpd) of its 2.6 million bpd exports – is also expected to agree to embargo Iranian oil at a foreign ministers meeting on Jan. 23.

The measures go far further than U.N. sanctions agreed by China and Russia and have helped cause a currency crisis in Iran where dollars are now a scarce commodity for Iranians seeking a safe haven for their vulnerable rial-denominated savings.

The new sanctions prompted Iran to threaten to close the Gulf to oil trade if it was prevented from selling its oil and Supreme Leader Ayatollah Ali Khamenei’s senior military adviser reiterated Iran would act decisively to protect itself.

“Iran would use any tools to defend its national interests, if it was exposed to any dangers,” Major General Yahya Rahim-Safavi said, according to the semi-official Mehr news agency.

Israel – reputed to have the Middle East’s only nuclear arsenal – said such talk was more evidence of the need to act quickly against Tehran.

“A nuclear Iran would mean a new world order where a very dangerous terroristic regime has impunity and also can control oil flow and oil prices,” Ayalon said.

U.S. Joint Chief of Staff Chairman General Martin Dempsey is to make his first visit to Israel Thursday, with Israeli media reporting he will try to persuade his hosts not to “surprise” Washington on Iran.

Saudi Arabia, Iran’s main rival for influence in the Middle East which would play a key role in replacing Iranian oil in the event of an embargo, played down Tehran’s talk of closing the Strait of Hormuz, the vital shipping lane for the kingdom’s exports.

The leader of China, Iran’s biggest oil customer was in Abu Dhabi Monday, on a six-day tour of the region where he hopes for greater access to its huge oil and gas reserves.

Although Beijing opposes further international sanctions on Iran, it has already cut its purchases of Iranian oil by more than half for the first two months of this year.

A senior Iranian oil official denied reports that Iran’s exports to Asia were already suffering due to the intensified sanctions pressure, saying contracts were bring renewed on schedule.

In addition to the confrontation with the United States over sanctions, Iran has accused it of being behind the latest murder of a nuclear scientist, Mostafa Ahmadi Roshan, blown up by a bomb attached to his car last in Tehran week.

Washington denies the charge.

Parliament speaker Ali Larijani said “some people have been arrested” in connection with the assassination, the fifth such killing in the last two years.

Larijani gave no further details, but told state-run Arabic language Al-Alam TV Tehran was ready to deal with sanctions.

Iran also accused Britain and Israel of involvement in the scientist s death.

Washington has denied any role in the assassination, while London has condemned the killing of civilians. Israel has not commented publicly.