TEHRAN, 24 November 2005 — Iran’s hard-line President Mahmoud Ahmadinejad was dealt a fresh political blow yesterday when Parliament rejected his third nominee for the crucial post of oil minister.

Deputies acknowledged the dispute could damage investor confidence as well as the Islamic republic’s standing within OPEC, but said they were unwilling to approve a man they said was the president’s crony and not up to the task.

The nominee, Seyed Mohsen Tassaloti, has been accused of being a millionaire whose family spends most of its time abroad. Although he has headed Iran’s largest petrochemical zone, he lacks direct experience in oil and the Oil Ministry.

One MP labeled him a “fourth-rate manager,” and he only managed to win the backing of 77 MPs in the 290-seat assembly.

“Each nominee presented by the president has been weaker than the previous one, and this shows that Ahmadinejad wants to select his allies rather than use experienced managers,” said Mahmoud Mohammadi, a moderate deputy.

“Most MPs think that after almost 30 years of revolution and an Islamic regime, the country should possess officials more capable of taking up the job,” he said.

In August, MPs in the conservative-controlled Parliament refused to give their backing to Ahmadinejad’s first choice on the grounds he was unqualified. The president was dealt another embarrassing blow earlier this month when deputies forced him to withdraw a second nominee.

The previous nominees had also been shunned over their lack of experience in the oil sector — which accounts for 80 percent of Iran’s export revenues.

A senior deputy acknowledged that the dispute over the post — which has exposed divisions within Iran’s right-wing camp — was damaging to investor confidence and Iran’s image within OPEC, where the Islamic republic is the No. 2 producer.

“Our position inside OPEC has been weakened, and our foreign project partners are worried. This is not just a domestic issue,” Kazem Jalali, spokesman for the Majlis foreign policy commission, told AFP.

He said the only consolation was that the vote proved Iran “is not heading towards a dictatorship” where the Parliament — controlled by a mix of centrists, moderate conservatives and radicals — simply follows the hard-line government of Ahmadinejad.

The latest rejection also keeps the brakes on Ahmadinejad’s populist promise to purge a ministry he argues is controlled by a “mafia” and redistribute the huge oil revenues among Iran’s poor.

Despite widespread concerns that the spat is causing stagnation in the oil sector, the head of Parliament’s influential energy commission played down the risk of serious fall-out.

“The absence of an oil minister is of little consequence because the ministry can function by itself and the president is monitoring it,” Kamal Daneshyar insisted.

Mohammad Khoshchehreh, a conservative deputy and economist, also voiced optimism that the damage to the sector — the backbone of Iran’s economy — would be limited.

“The oil industry will continue to function just like during the (1980-1988) war with Iraq, although this could have an effect on its rhythm,” he explained.