Tehran, Iran ? A defiant Iran announced Friday it has begun pulling its foreign currency accounts out of European banks to protect its assets from possible U.N. sanctions over its nuclear program.

As analysts estimated the amount of those funds at up to $50 billion, Iran also called for a reduction in OPEC oil production – raising the possibility that the country would use oil in its standoff with the West. Iran pumps about 4 million barrels of oil a day, making it the second largest producer in OPEC after Saudi Arabia.

Underlining his challenging stance, Iran’s hard-line president, Mahmoud Ahmadinejad, met Friday in Damascus, Syria, with leaders from the Palestinian militant groups Hamas and Islamic Jihad.

The two groups expressed support for Iran’s right to the peaceful exploitation of nuclear power and criticized what they called the “selective and double-standard policy practiced by some international powers in this regard.” The remark was a reference to U.S. and European opposition to Iran’s enrichment of uranium, a process that can produce material for atomic bombs.

The currency withdrawal signaled that Iran was willing to weather U.N. punishment rather than abandon its nuclear ambitions, which the United States and some in Europe say are to develop atomic weapons. Tehran insists its program is for peaceful purposes only.

Friday’s move also deprives Europe of an important lever to influence Iran and could weaken its resolve to push Iran to give up key parts of its nuclear program, analysts said.

Crude oil prices rose above $67 Friday amid concern about the Iranian nuclear dispute, unrest in Nigeria and al-Qaida’s threat of terrorist attacks in the United States.

Analysts fear that oil prices could surge much higher – even beyond $100 a barrel – if the U.N. Security Council imposes trade sanctions on Iran over its nuclear activities.