Iran warned its Arab neighbors on Sunday not to raise crude output to replace Iranian oil in the event of an embargo by the European Union, Tehran's governor for the Organization of the Petroleum Exporting Countries was quoted as saying.

The consequences of this issue are unpredictable. Therefore, our Arab neighbor countries should not cooperate with these adventurers and should adopt wise policies, Mohammad Ali Khatibi said in an interview with the Sharq newspaper.

EU countries have agreed in principle to embargo imports of Iranian crude as part of the latest Western efforts to increase the heat on Tehran.

They will look to other oil exporters to increase output to make up for the shortfall, and Saudi Arabian Oil Minister Ali al-Naimi said on Saturday his country was ready to meet any increase in consumer countries' demand.

Iran -- OPEC's second-largest oil producer after Saudi Arabia, with output of about 3.5 million barrels per day -- faces trade hurdles over its nuclear program, which the United States and its allies say is aimed at building bombs.

Iran says it needs nuclear technology to generate electricity.

EU countries have proposed grace periods on existing contracts of one to 12 months to allow companies to find alternative suppliers before implementing an embargo.

Iran has threatened to block the vital oil shipping route of the Strait of Hormuz in the Persian Gulf should sanctions be imposed on its oil exports.

(Writing by Ramin Mostafavi, Editing by Jonathan Thatcher)