Oil, Gas Prices Surge After Iran Cuts Oil To UK, France


Oil prices spike and Gas surges to a near record as Iran officially starts cutting their supply of oil to Europe.

Iran has officially cut off oil supplies to France and the UK, a move which has caused an immediate reaction in oil and gas prices. Furthermore, Iran has sent letters of ultimatum to other European nations saying they either sign long term contracts in defiance of the UN oil embargo or face being immediately cut off from Iranian oil now.

Crude oil and gas prices spike after Iran cuts oil suplies to europe

Crude oil and gas prices spike after Iran cuts oil suplies to europe
In making the decision to impose sanctions on Iran, western politicians were worried on the effect sanctions would have on oil prices, so they devised a clever plan to prevent oil prices from being effected. Prior to the UN approval of the sanctions against Iran, Saudi Arabia promised they would increase oil production to keep oil steady at $100 dollars a barrel. The other part of the plan was to wait until July to implement the sanctions to give nations like Britain and France time to re-route their oil imports from other nations, like Saudi Arabia.

However, Iran warned last week that they would launch a preemptive strike by cutting off oil to six nations in Europe and further warned that by cutting off their oil supply they could easily send the price of oil skyrocketing to atleast twice its current price.

Today, Iran has began that preemptive strike against the sanctions by choosing to impose their own ban of oil exports to the European nations that led the call for an embargo against Iranian oil, France and Great Britain. The immediate cut in oil supplies to those two nations was coupled with letters of ultimatums which are speculated to have gone to Spain, Greece, Italy and other nations. The letters are reported to demand the buyers sign a long term contract to continue buying Iranian oil or face being immediately cut off from Iranian oil as France and Britain have.

The announcement of today’s cuts in the oil supplies follows ever escalating rhetoric between Israel and Iran in which western nations repeatedly warn that a preemptive attack is inevitable and necessary to prevent Iran from obtaining a nuclear weapon.

Western nations just recently cut Iran off from the global banking system, imposing sanctions against the Iranian central bank and removing it from the SWIFT wire transferred, which is a secure network used by nearly all international banks and companies to conduct transactions.

Russia, China, Japan and India have all given stern warnings to the U.S. and Israel not to launch any attacks against Iran. Tensions are also building up in Syria where a proxy war between the U.S. and Iran is already underway. Iran has already deployed a fleet of Navy ships and thousands of elite Revolutionary Guard troops to Syria, as the Pentagon has made clear they are planning various military options to deal with the situation in Syria.

Update – Since publishing this post, Zero Hedge has written a similar article, noting oil prices are now above $105 a barrel.

Update: Crude Oil Futures Surge Above $105 a barrel

Russia today reports on the announcement of the cutting of oil supplies.

Iran cuts off oil supplies to Britain, France

The move was confirmed by the country’s Oil Ministry, with the spokesman saying that Iran will be “selling its oil to new customers”.

The decision is not expected to have a big impact, as France only bought three percent of its oil − 58,000 barrels a day − from the Islamic republic last year, and Britain buys less than 1 per cent.

But it was seen as a warning shot to other EU nations that are bigger consumers of Iranian oil, including Italy, Spain and Greece. The latter would be the most affected, should Iran go ahead with the cuts, as crisis-hit Greece gets more that 30 percent of its oil needs from the Islamic Republic.

As a whole, the bloc currently buys about 18% of Iran’s oil exports. Iran is the world’s 4th largest oil supplier, with China, India and Japan its largest buyers.

Earlier this month, Iran’s Oil Minister threatened to cut the Republic’s oil exports to “some” European countries. “We have our own customers … The replacements for these companies have been considered by Iran,” Nikzad said.

News of Iran cutting supplies to 6 EU member states caused a lot of concern in Europe – and in world’s markets, with the price of Brent oil jumping above $120 a barrel.

Source: RT

While the western media is downplaying the effects of Iran cutting off the oil supply, prices in the commodities have reacted immediately. Crude oil prices have now spiked will over the $100 a barrel mark with an upward move of nearly 1% in the last 24 hours and the latest crude oil quote at over $104 a barrel and rising.

Furthermore, Gasoline prices has spiked and are heading toward record highs. Fox News, has published an article on price of gas shooting near record highs which barely even acknowledges the situation in Iran as a factor.

Instead, they blame Obama’s foreign economic policies and warn that gas prices will over $4.25 a gallon come April.

Fox quotes Karl Rove who supplies a nationwide average price of $3.53 cents. However, Gas-Price.net, which aggregates real time data from across the Nation shows nation wide gas prices are in fact already at $4.25 a gallon.

Domestic production eyed as gas prices head toward record-breaking height

Published February 19, 2012 | FoxNews.com

President Obama’s re-elect team defended White House energy policy on Sunday as gas prices shoot toward the $4 mark and beyond, a level that could devastate voters’ pocketbooks as well as Obama’s chances for a second term.

Nationally, gas prices are $3.53 a gallon, up 25 cents since Jan. 1, and likely headed to $4.25 a gallon by late April. […]

[former CEO of Shell Oil] Hofmeister warned that the global economy is in “the crosshairs” of a precarious situation in which China is growing its demand for oil each year by millions of barrels per day and turmoil in the Middle East is creating “some of the most unpredictable, volatile, geopolitical situations” in the world.

[…]

Source: Fox News

Categories: WORLD NEWS

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