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.
Or it may force the den of crazies to close the Strait of Hormuz.
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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
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, OPECs 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
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.
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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.
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?
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.
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.
Are the Brits and French up to keeping Iran from closing the Strait?
A couple of traders interviewed on "Fast Money" are betting on strong/stronger oil prices.
Hmm...
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.
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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:
"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.
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