Oil Could Soar To $100 On Iran Decision.
Iran is among the world’s largest providers of crude oil. The foreign aid bill that passed the House includes sanctions on the crude exporter. Much of this oil goes to China, the largest importer. The supply interruption would be enough to hit the global crude market and push the price to $100. The $100 figure has been a part of forecasts for the last several weeks, primarily because of geopolitical considerations.
Oil Future –Years Of Success?
According to Bloomberg, “The legislation would broaden sanctions against Iran to include foreign ports, vessels, and refineries that knowingly process or ship Iranian crude in violation of existing US sanctions.” The law still has to be approved by the Senate.
Crude oil prices are increasing by many causes–perhaps the largest number in years. Ukraine has attacked Russian oil installations. US sanctions on Venezuelan oil is another. Oil tankers have stopped transiting the Red Sea to the Suez Canal. Tensions between Arab nations and Israel are high.
The US, now the largest producer of crude in the world, does not pump enough oil to make up the difference. Parts of the world’s economy that appeared to have slowed, particularly China, have picked up again. The very same dip in demand is now over.
Iran was one of the keys to keeping oil prices under $100. It may not be anymore.
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