Sanctions may force Iran to discount oil

Gas prices gonna go up...
:eek:
Iran oil boycott menaces world economy
Jan. 15, 2012 -- Some financial analysts say the rising tensions over Iran's nuclear program could throw a wrench into the world economy.
Analysts told The Washington Post that sanctions on Iranian oil could force already buoyant world crude prices even higher than they were in 2011, when the average price per barrel surged 14 percent over the record price set in 2008.

Major industrial nations boycotting Iranian crude would be forced to look elsewhere to cover their oil requirements, which would push the price of non-Iranian crude higher. Analysts say there are some doubts in the market the oil giant Saudi Arabia could make up for the lost Iranian supplies.

With futures prices settling in above $100 per barrel, worrisome forecasts warn that the global economic recover could stall. "At current prices, the world economy is going to grow at 3 percent to 3.5 percent this year," Adam Sieminski, chief energy economist at Deutsche Bank, told the Post. "That's not great, but it's OK. At $125 a barrel, it is only going to grow 2.5 percent, and that's not very good. At $150, we might only grow 1 percent, and that's a disaster."

The potential crude crisis could in particular add fuel to the European debt crisis, which also has U.S. economists and business leaders on edge. The United States has a longstanding boycott of Iranian crude in place; however Greece, Spain and Italy are major importers and could find themselves bearing the brunt of a boycott by the European Union.

Read more: Iran oil boycott menaces world economy - UPI.com

See also:

Iran warns its Gulf neighbors against producing more oil
Mon, Jan 16, 2012 - Iran warned its Arab neighbors on Sunday not to raise crude output to replace Iranian oil in the event of an embargo by the EU, Tehran’s OPEC Governor Mohammad Ali Khatibi 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,” Khatibi said in an interview with the Sharq newspaper. EU countries have agreed in principle to embargo imports of Iranian as part of the latest Western efforts to step up 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 US 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 warns its Gulf neighbors against producing more oil - Taipei Times
 
Gettin' ready for the big showdown...
:eusa_eh:
British, French ships join US carrier in Strait of Hormuz
Jan 23, 2012: British and French ships joined a US carrier group in a six-strong flotilla of warships which passed through the sensitive Strait of Hormuz, Britain's Ministry of Defence said Sunday.
The ministry said a Royal Navy frigate, HMS Argyll, was part of a US-led carrier group to sail through the waterway which Iran has threatened to close over Western moves to impose new sanctions over Tehran's nuclear programme.

A spokesman said: "HMS Argyll and a French vessel joined a US carrier group transiting through the Strait of Hormuz, to underline the unwavering international commitment to maintaining rights of passage under international law."

He said Britain maintained "a constant presence in the region as part of our enduring contribution to Gulf security". British warships have been patrolling in the Gulf continuously since the 1980s. The Strait of Hormuz is a key transit route for global oil supplies.

European Union foreign ministers meeting in Brussels on Monday are expected to agree to sanction Iran's central bank and announce an embargo on buying Iranian oil. The United States, France, Britain and Germany accuse Iran of seeking to build a nuclear bomb, but Tehran says its nuclear drive is peaceful.

Source
 
Sanctions May Force Iran to Sell Oil at a Discount - MarketWatch Video

Or it may force the den of crazies to close the Strait of Hormuz.

They are crazy and they may be stupid enough to try to close the Strait of Hormuz, but to try they would have to attack international shipping and that would mean they would lose their navy in short order and probably at least some of their land based military capability and the Strait would only be slowed down for a very short time.
 
toomuchtime_ wrote: They are crazy and they may be stupid enough to try to close the Strait of Hormuz,

Den how dey gonna get their oil to China, their biggest customer?
:confused:
 
toomuchtime_ wrote: They are crazy and they may be stupid enough to try to close the Strait of Hormuz,

Den how dey gonna get their oil to China, their biggest customer?
:confused:

It would be a desperate move. If the US and EU sanctions are firmly implemented, Iran will have a hard time selling its oil, and while China has been buying about 20% of Iran's output, it is now demanding discounts and better terms, and it has cut back on its oil purchases until Iran complies with its demands, so Iran will shortly be unable to pay its bills with or without selling oil to China, and they may be desperate and stupid enough to try to get the US and EU to back down by trying to close the Straits of Hormuz.

Of course, it would be wrong to say Iran would be forced to try to close the Strait. It could end all of this by giving international arms control inspectors unfettered access to all of its nuclear and missile programs and all relevant records.
 
Kinda sounds like the oil producers are being divided up into three camps...

... one camp for the Asia market...

... one for the US & EU markets...

... and one for the rest of the world...

... divide and conquer...

... a stratergy fer bringin' down oil prices.
:eusa_eh:
 
Last edited:
Kinda sounds like the oil producers are being divided up into three camps...

... one camp for the Asia market...

... one for the US & EU markets...

... and one for the rest of the world...

... divide and conquer...

... a stratergy fer bringin' down oil prices.
:eusa_eh:

It "could".

the persian and arabs hate each others guts and we could have the Canadians and some other Americas to rely on.
 
Are the Brits and French up to keeping Iran from closing the Strait?

Iran is not capable of closing the Strait of Hormuz. At its narrowest point the navigation channel through the Strait is 2 miles wide and the only way Iran could possibly attempt to close the Strait is to attack international shipping and this would compel the US and its allies to destroy the Iranian navy and any land based facilities capable of attacking Gulf shipping.
 
A couple of traders interviewed on "Fast Money" are betting on strong/stronger oil prices.
Hmm...

Oil prices go up and down mostly on expectations of future demand, so when the economies in the US and EU seem to be improving, oil prices go up and when there are doubts about them, oil prices go down. Iranian chest thumping does not cause sustained increases in oil prices.
 
Iran threatenin' to close the Strait of Hormuz - again...
:cuckoo:
EU imposes fresh sanctions on Iran, bans oil and mineral imports
Monday 23rd January, 2012 - The European Union Monday imposed fresh sanctions on Iran, banning the import of Iranian crude oil and petroleum products and a freeze on the assets of the country's central bank, to which Tehran immediately responded by threatening to close the strategic Strait of Hormuz.
The measures, adopted in Brussels by the EU's 27 foreign ministers, include an immediate embargo on new contracts for crude oil and petroleum products. But it has allowed existing contracts to be run until July. The EU diplomats formally adopted the oil embargo and termed the measures as part of a twin-track move to discourage Tehran from pursuing its alleged nuclear weapons programme. Iran maintains its nuclear programme is only for peaceful purposes.

Meanwhile, a senior member of Iran's parliament said that the Islamic Republic would shut the entry point to the Gulf if its oil exports are hit. "If any disruption happens regarding the sale of Iranian oil, the Strait of Hormuz will definitely be closed," Mohammad Kossari, deputy head of parliament's foreign affairs and national security committee, told the semi-official Fars news agency. The EU has also blocked trade with Iran in gold, diamonds and precious metals. It is also blocking the export to Iran of "key" petrochemical equipment and technology from the EU.

The sanctions come because of Iran's "defiance of six U.N. Security Council resolutions and its refusal to enter negotiations over its nuclear programme," British Foreign Secretary William Hague said in a statement from Brussels, Belgium. Hague described the embargo as part of "an unprecedented set of sanctions. I think this shows the resolve of the European Union on this issue". Iran exports 2.2. million barrels of oil a day, with about 18% bound for European markets, according to the U.S. Energy Information Administration. The Iranian government gets about half its revenue from oil exports, according to the EIA.

The EU ban came a day after a U.S. aircraft carrier, accompanied by a flotilla that included French and British warships, made a voyage into the Strait of Hormuz, in defiance of Iranian hostility. The sanctions will compound problems for Iran, which is already facing U.S. sanctions imposed on December 31. The Western powers believe that choking exports would force Iran to agree to curbs on its nuclear programme. Israeli Prime Minister Benjamin Netanyahu, who has voiced unhappiness over Iran's nuclear programme, called the EU sanctions a "step in the right direction" but said Iran was still developing atomic weapons.

Source
 
Gas prices went up 45&#cent; overnight here...
:eek:
Iran slams EU oil embargo, warns could hit US
Jan 24, 2012: Iran accused Europeans on Monday of waging "psychological warfare" after the EU banned imports of Iranian oil, and US President Barack Obama said Washington would impose more sanctions to address the "serious threat presented by Iran's nuclear program."
The Islamic Republic, which denies trying to build a nuclear bomb, scoffed at efforts to choke its oil exports, as Asia lines up to buy what Europe scorns. Some Iranians also renewed threats to stop Arab oil from leaving the Gulf and warned they might strike US targets worldwide if Washington used force to break any Iranian blockade of a strategically vital shipping route.

Yet in three decades of confrontation between Tehran and the West, bellicose rhetoric and the undependable armoury of sanctions have become so familiar that the benchmark Brent crude oil price edged only 0.8 per cent higher, and some of that was due to unrelated currency factors. "If any disruption happens regarding the sale of Iranian oil, the Strait of Hormuz will definitely be closed," Mohammad Kossari, deputy head of parliament's foreign affairs and national security committee, told Fars news agency a day after US, French and British warships sailed back into the Gulf. "If America seeks adventures after the closure of the Strait of Hormuz, Iran will make the world unsafe for Americans in the shortest possible time," Kossari added, referring to an earlier US pledge to use its fleet to keep the passage open.

In Washington, Obama said in a statement that the EU sanctions underlined the strength of the international community's commitment to "addressing the serious threat presented by Iran's nuclear program." "The United States will continue to impose new sanctions to increase the pressure on Iran," Obama said. The United States imposed its own sanctions against Iran's oil trade and central bank on Dec 31. On Monday, it imposed sanctions on the country's third-largest bank, state-owned Bank Tejarat and a Belarus-based affiliate, for allegedly helping Tehran develop its nuclear program.

The EU sanctions were also welcomed by Israel, which has warned it might attack Iran if sanctions do not deflect Tehran from a course that some analysts say could potentially give Iran a nuclear bomb next year. US Secretary of State Hillary Clinton said in a statement with Treasury Secretary Timothy Geithner: "This new, concerted pressure will sharpen the choice for Iran's leaders and increase their cost of defiance of basic international obligations." US ambassador to the United Nations, Susan Rice, reiterated Washington's commitment to freedom of navigation in the Strait of Hormuz. "I think that Iran has undoubtedly heard that message and would be well advised to heed it," she said at a meeting of the board of governors of the American Jewish Committee in New York.

CALLS FOR TALKS:

See also:

Iran ready for new nuclear talks with world powers: Ahmadinejad
Jan 26, 2012: President Mahmoud Ahmadinejad said on Thursday that Iran is ready to sit down with world powers for talks on its nuclear programme as he brushed off the harmful effect of newly imposed sanctions.
"They have this excuse that Iran is dodging negotiations while it is not the case...," the Iranian leader was quoted as saying by state media. "Why should we run away from the negotiations?" Ahmadinejad was implicitly responding to comments made by Western officials urging the Islamic republic to return to negotiations over its contested nuclear programme. "The European Union stands together in sending that clear message to the government of Iran: that we wish to go back to negotiations, to invite them to pick up the issues which were left on the table in Istanbul a year ago," EU foreign policy chief Catherine Ashton said on Tuesday.

The last round of talks between Iran and the major powers consisting of Britain, China, France, Germany, Russia and the United States was held in Turkey in January 2011, but the negotiations collapsed. Ahmadinejad also downplayed the effect of the newly imposed Western sanctions saying they would not hurt his nation. "Once our trade with the Europe was around 90 per cent but now it has reached 10 percent and we are not seeking this 10 per cent... experience has shown the Iranian nation will not be hurt," Ahmadinejad said during a visit to the southern Kerman province.

"For the past 30 years, the Americans have not been buying oil from us. Our central bank has no relations with you," he added. The European Union on Monday slapped an embargo on Iranian oil exports as the West ramped up pressure on Tehran over its controversial nuclear drive and urged it to return to the negotiating table.

Source
 

Forum List

Back
Top