Business

Like Clockwork: Iran Announces Cut in Oil Supply, Oil Hits 9-Month High

Like Clockwork: Iran Announces Cut in Oil Supply, Oil Hits 9 Month HighOil prices jumped to a nine-month high above $105 a barrel on Monday after Iran said it halted crude exports to Britain and France in an escalation of a dispute over the Middle Eastern country’s nuclear program.

By Monday afternoon, benchmark March crude was up $2.02 to $105.26 per barrel in electronic trading on the New York Mercantile Exchange, the highest since May. The contract rose 93 cents to settle at $103.24 per barrel in New York on Friday.

Analysts are hopeful Iran’s announcement will have “minimal impact” on supplies because only about 3 percent of France‘s oil consumption is from Iranian sources and Britain hasn’t imported oil from the Islamic republic in six months.

So, it really shouldn’t affect anything, right? Don’t be too sure.

“The price rise is more a reflection of concerns about the further escalation in tensions between Iran and the West,” said commodity analyst Caroline Bain of the Economist Intelligence Unit. “Banning the tiny quantities of exports to the U.K. and France involves very little risk for Iran – indeed quite the opposite, it catches the headlines and leads to a higher global oil price, which is something Iran is very keen to encourage.”

Translation: cutting off oil to France and the U.K. has as much to do with spooking the markets and driving up costs as it does making a symbolic show of force. Think about it: who really thinks Iran is willing to post a loss in profit just so it can rattle its saber a little?

Iran’s oil ministry said late Sunday it stopped crude shipments to British and French companies in an apparent pre-emptive blow against the European Union after the bloc imposed sanctions on Iran’s crucial fuel exports. They include a freeze of the country’s central bank assets and an oil embargo set to begin in July.

As many Blaze readers are aware, the EU sanctions, along with other punitive measures imposed by the U.S., are part of Western efforts to halt Iran’s nuclear program, which many fear is aimed at developing atomic weapons. Of course, Iran denies the charges, and says its program is for “peaceful purposes.”

Iran’s Oil Minister Rostam Qassemi had warned earlier this month that Tehran could cut off oil exports to “hostile” European nations. The 27-nation EU accounts for about 18 percent of Iran’s oil exports.

Tehran also is considering extending the embargo to other European countries, a semiofficial Iranian news agency reported Monday.

Many critics believe this is part of Iran’s strategy of grabbing headlines and driving up oil prices. And it makes sense: if Iran were to announce the countries it was cutting off all at once, it would have a one-time effect that the markets would eventually address. However, if Iran releases the names of countries that have made the “cut off” list in a “slow drip” fashion, it can milk the market reaction and consequent impact on oil prices for all it’s worth.

The head of Iran’s state oil company Ahmad Qalehbani was quoted by the Mehr agency as saying that the country would stop selling crude to nations who take action against Tehran.

But who’s on the list?

Oh, and in case you were wondering, the full impact of Iran’s announcement on the U.S. markets won’t be known until they reopen following the Presidents Day holiday.

The Associated Press contributed to this report.

Comments (56)

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  • rrjenn
    Posted on February 21, 2012 at 9:22am

    Well. anything for da jews. right?

    Report Post »  
    • carl_in_ohio
      Posted on February 21, 2012 at 3:11pm

      that’s just a racist, knee-jerk comment based on your years of watching network Television.

      Turn off your TV and cable, and read a book.

      Report Post »  
  • I Aint PC
    Posted on February 21, 2012 at 9:18am

    “A bushel of wheat and corn just rose to over $105 for OPEC nations. Shipments of wheat and corn have been halted to Iran. All non-OPEC nations will contine being able to purchase for current market rates.”

    That would be a good start to an article about oil prices. Tie the price we sell them food commodies for, to the price they sell us oil.

    For the whiny Liberals that will cry about “starving the people” of these nations, when gas gets too high, food prices also rise, putting a financial strain on my family.

    Report Post »  
    • JRook
      Posted on February 21, 2012 at 10:36am

      Really according to GB and Rush its all Obama’s fault. Even though they and everyone here suggests that we heighten the tension in the Middle East rather than settle the markets. How many sides of one’s mouth can you talk out of.

      Report Post »  
    • Blazer123
      Posted on February 21, 2012 at 11:50am

      “For the whiny Liberals that will cry about “starving the people” of these nations”
      Our policies which starve the people of these nations let their dictators stay in power because they can blame us for their problems. We f with their economy and they do the same in retaliation…

      Report Post »  
  • LastAmerican
    Posted on February 21, 2012 at 8:05am

    Come on Israel. Time to git r done!

    Report Post »  
  • The American People
    Posted on February 21, 2012 at 7:59am

    It should serve to wake this country up and make it more intelligent and stop making dumb mistakes. This politically suicidal moron of a President, flat out said no to hundreds of thousands of jobs with the oil drilling moratoreum and while gas prices are at record bank breaking highs because of him, during an election year he says NO yet AGAIN to hundreds of thousands of jobs associated with the pipeline. This man is so offensive to this country that it’s staggering. If we keep letting this happen and dont use or get resources wherever we can, Russia and China will come over and use it. They’ll take resources, kill all of the Americans especially the evnironmentalists and tree huggers, wipe out whole animal populations and drill. They don’t care and they have the ability to OWN the US because we are too stupid to take our heads out of our butts.

    Report Post » The American People  
  • Gonzo
    Posted on February 21, 2012 at 7:27am

    This is exactly what Obama wanted, perfect cover for his failed energy policies.

    Report Post » Gonzo  
  • babylonvi
    Posted on February 21, 2012 at 4:39am

    Another con job by the oil industry. 1. There was an embargo so cutting off oil by Iran was meaningless. 2. We haven’t used Iranian oil for some time. 4. We are far from the $8.gal gas price the Obama said he wanted during his campaign(to make electric cars more viable).

    Report Post » babylonvi  
    • The American People
      Posted on February 21, 2012 at 7:53am

      show me your evidence that we don’t or havent used Iranian oil for sometime while your busy “explaining” this to everyone.

      Report Post » The American People  
    • howcomeagain
      Posted on February 25, 2012 at 12:36pm

      TheAmericanPeople@ This is why we have a search box. This is also the problem with most not looking things up for themselves. The US does not get it’s oil from Iran. Even the gov‘s own Joint Economic Committee’s report show’s graphs with zero exports to the US. Somehow, they then claim in the same report, according to BP’s statistical review, that 13% is exported to the US. But I am unable to make 13% come out of 5% marked as “other”.

      Report Post »  
  • SHOWMESTATEGUY
    Posted on February 21, 2012 at 3:09am

    Where is a Keystone pipeline when you need one?

    Report Post »  
  • Detroit paperboy
    Posted on February 21, 2012 at 2:43am

    Obama wants high oil prices, he needs to sell those leftover Volts……However, it will be the one thing that ensures he loses… His welfare freaks arent getting free gas yet….

    Report Post »  
  • Viper1
    Posted on February 21, 2012 at 1:28am

    Build the vehicle that I designed forty years ago and we can tell these idiots to choke on their oil. The test vehicle got over 150 mpg in the late sixties and early seventies. I was an idiot and gave most of the design to the Honda Corporation and they told me that it would never be built because the oil companies would never let it be built. I was told that the rubber companies would never let it be built for the same reason. Then the Honda corporation attempted to build my vehicle with only part of my design and they have spent over $250 million and still don’t have a working prototype. I guarantee I can have one within the year. I am not greedy. I will share fifty/fifty with any young engineer that wants to be rich beyond their wildest dreams. Remember, the Government spent BILLIONS developing a new helicopter, (The Apache), built multiple working prototypes and then scrapped the project. If they want to throw money at something that works they can spend some my way. I will share.

    Report Post »  
  • thetreyman
    Posted on February 21, 2012 at 12:49am

    supply and demand.

    Report Post » thetreyman  
  • KAdams
    Posted on February 21, 2012 at 12:48am

    Hello people… we don’t get Iranian oil… there’s been a ban on Iranian oil imports since 1979……………

    Report Post »  
    • READRIGHTHERE
      Posted on February 21, 2012 at 1:58am

      Thank you. This is a game. They just played their only card and all they got was a two percent hike in oil prices. The world is better off without them. Once they realize this, about the time they run out of water, bread, and meat, then they will change their tune, and revert to their status as oil producing pawns for the great western culture. Chances are they will be stubborn, but they will cave. Hunger and thirst trump ideology every time.

      Report Post »  
  • EndTheFedNOW
    Posted on February 21, 2012 at 12:37am

    How dare they. They get slapped with sanctions with no proof of a nuclear bomb, AND THEN THEY WONT SELL US OIL. Gosh those Iranians.

    Report Post » EndTheFedNOW  
  • 1casawizard
    Posted on February 21, 2012 at 12:03am

    Let them drink their own oil. The citizens however, want to be like Americans, the way America was in the past.

    Report Post » 1casawizard  
  • SychinLegacy
    Posted on February 21, 2012 at 12:01am

    How long until Santorum says the solution is to bomb Iran?

    Report Post » SychinLegacy  
    • howcomeagain
      Posted on February 25, 2012 at 12:47pm

      He already is. He’s just another elite mouth piece under the guise of conservatism. Although, I don’t see how funding two/three undeclared wars on false pretenses, and 900 military bases throughout the world could be considered conservative.

      Report Post »  
  • neoconenemy
    Posted on February 20, 2012 at 11:42pm

    So global prices are spiking up just because zionists are throwing a hissy fit over Iran’s nuclear program???

    Report Post »  
  • DeOppressoLiber
    Posted on February 20, 2012 at 11:41pm

    This country made a strategic error when it failed to start developing it own fossil fuel reserves right after 9/11. Even before attacking Afghanistan we should have opened all of our drilling areas and constructed new refineries. That would have sent a message of we do not care how bad we screw the middle east. That action would have put the fear of god in everyone, This is also a COG for this administration, they know how the middle east is unstable and failing to act is criminal. The GOP needs to latch on to them on this like a pit bull.What about that pipe line?

    Report Post »  
    • Dismayed Veteran
      Posted on February 21, 2012 at 11:19am

      Deoppressor Libre

      I agree. We should have declared war and gone to a war footing beginning 9/12. Maybe if Americans really had to participate in the sacrifice that war demands. A war footing means that we go from a net exporter of oil to using the oil as an internal strategic reserve. Expanding oil, oil shale, coal gasification would have made us much stronger.

      BTW, Deoppressor Libre,

      Daily I remember MSG Russell Peter Bott, 1st Special Forces, Detachment B-52, Recon Team Viper, MIA, Laos, 2 DEC 1966. Missing but not forgotten.

      Report Post » Dismayed Veteran  
  • KidCharlemagne
    Posted on February 20, 2012 at 11:40pm

    Oh crap!…..we need Ron Paul to become the Federal Reserve chairman immediately!!:

    ———————————–
    (January 17, 2006)
    “In 1971, as it became clearer and clearer that the U.S Government would not be able to buy back its dollars in gold, it made in 1972-73 an iron-clad arrangement with Saudi Arabia to support the power of the House of Saud in exchange for accepting only U.S. dollars for its oil. The rest of OPEC was to follow suit and also accept only dollars. Because the world had to buy oil from the Arab oil countries, it had the reason to hold dollars as payment for oil. Because the world needed ever increasing quantities of oil at ever increasing oil prices, the world’s demand for dollars could only increase. Even though dollars could no longer be exchanged for gold, they were now exchangeable for oil.

    The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to accumulate increasing amounts of dollars, because they needed those dollars to buy oil. As long as the dollar was the only acceptable payment for oil, its dominance in the world was assured, and the American Empire could continue to tax the rest of the world. If, for any reason, the dollar lost its oil backing, the American Empire would cease to exist. Thus, Imperial survival dictated that oil be sold only for dollars.”
    http://www.energybulletin.net/node/12125

    Report Post »  
  • Netsurfer2
    Posted on February 20, 2012 at 11:34pm

    It’s a ploy to let Russia dictate to us by force! Remember that Russia is building their military like crazy right now, while ours is being cut back dramatically! Not only that, our president has not pursued any drilling of oil in our own country in easing our pains with resources becoming higher priced! I believe it is time that we take the bull by the horns and produce our own oil, raise the price of food to those countries or tell them that they can eat oil from now on! I for one am sick of it that they continue to shove it down our throats while our own resources are kept in the ground!

    Why our government does not listen to it’s own people is well beyond my understanding! It’s the “crony capitalism” that they are using, not the constitution! Time to change gears and throw the bums out!

    I’m sure our president wants us to see very high inflation beyond no tomorrow!

    My one sentence I have to say is “Get out of debt and stay out of debt”! Education is the only way out of poverty!

    You only know what is coming next! Very high inflation, high cost of living and I can promise you that the wages will not change! Yes folks that means even people walking off their jobs in protests! It won’t be worth working if the cost of living is beyond the means to begin with! I suggest our president start drilling more for oil right now! Start building more oil refineries in our own country, pump more out of our grounds and ease some of the pain this is c

    Report Post » Netsurfer2  
  • 1casawizard
    Posted on February 20, 2012 at 11:11pm

    I‘m just surprised that they haven’t cut supply already. Let’s eliminate federal EPA and drill baby drill. We still have state EPA.

    Report Post » 1casawizard  
    • 1casawizard
      Posted on February 20, 2012 at 11:19pm

      We don’t need their damn oil.

      Report Post » 1casawizard  
    • 1casawizard
      Posted on February 20, 2012 at 11:24pm

      Let’s eliminate The FED EPA and let the states drill, baby drill.

      Report Post » 1casawizard  
    • oldguy49
      Posted on February 20, 2012 at 11:32pm

      this is another reason i am switching to paul………..they say he’s weak on foreign policy but this is strong……..duh……with paul at least we can take back our country

      Report Post »  
    • LauraPZ
      Posted on February 20, 2012 at 11:41pm

      Agreed- America, needs to be energy independant, ASAP. I seem to recall that Jimmy carter, created the DoE, to do just that. And- since then, we have become MORE energy dependent on our ENEMIES, every since.
      And- guess what- Summer is coming, time to jack the fuel prices up, up, up!!! While I would never own an electric/hybrid car (doesn’t fulfill my needs), I do have several large diesel trucks. While they might not get many MPG’s, they DO carry 5-10 TONS of cargo, and anything else I need. (hey, if I did not live so far off-road, I’d have a Ferarri- but an airplane gets me to work, when I have to).

      Report Post »  
  • GoodStuff
    Posted on February 20, 2012 at 11:10pm

    Don’t worry…Obama’s got everything under control.

    Report Post »  
    • CatB
      Posted on February 20, 2012 at 11:22pm

      Yea .. I just made the best investment of the year .. I put gas in my vehicle .. by next week .. if I don’t go anywhere .. I will be WAY ahead.

      Report Post »  
    • db321
      Posted on February 20, 2012 at 11:34pm

      Obama sure does have everything under control – at the pump, we are sad – but Obama is glad – Just think how powerful it must make him feel for Obama to know that he can bring everyone in America to their knees like he does. He is one powerful man! I feel like every time Obama speaks he is flipping me the bird! I still will not lift Obama up as my Lord, as so many have done – Obama may be able to manipulate things for power, but my Lord has All Mighty Power.

      Report Post » db321  
  • KAdams
    Posted on February 20, 2012 at 11:09pm

    And the title of this article: “Like Clockwork”… implies foreknowledge.

    Report Post »  
  • LeadNotFollow
    Posted on February 20, 2012 at 10:50pm

    …
    Those of you who voted for Obama, how’s that HOPE and CHANGE working for you now?
    He’s stripped all Americans of HOPE, and now he has taken our last dime of CHANGE.

    How can the employed afford to drive to work, and the unemployed afford to drive to look for work?
    IMPEACH NOW !

    Report Post »  
  • Snowleopard {gallery of cat folks}
    Posted on February 20, 2012 at 10:48pm

    Something more, anyone who does not believe Iran will have that much of an impact on the way oil speculators will create crisis after crisis – say Soros and friends, just look back to when oil shot to 150.00 or so a barrel; the military reports that declared it a economic terror attack…what is to keep such a economic terror attack from coming again, this time much worse…especially with the radical in chief of the White House.

    Report Post » Snowleopard {gallery of cat folks}  
  • Snowleopard {gallery of cat folks}
    Posted on February 20, 2012 at 10:46pm

    Lets see – Russia gains, Iran gains, Saudi arabia gains (cut back production) and we lose along with Europe; anyone want to bet a new pipeline may soon be in the works say across northern Iraq and Syria under control of an Iranian puppet state in both areas, and built in cooperation with Russia?

    Report Post » Snowleopard {gallery of cat folks}  
    • KAdams
      Posted on February 20, 2012 at 11:09pm

      Hellooo… there’s been a ban on Iranian oil imports into the US since 1979… so I ask again, this is supposed to affect us how? They haven’t closed the Straits yet, so I ask yet again… WHY is this affecting us? …gouge gouge… gouge.

      Report Post »  
    • ChiefGeorge
      Posted on February 20, 2012 at 11:35pm

      Because oil is priced in US Dollars thats how it affects us.

      US Dollars are required by the OPEC countries in order to purchase oil. The agreement goes back to Kissinger in arounf 73/74 in which he got a deal with them to only sell oil for US Dollars. A small portion of the profit from these sales is remitted back to our treasury through the purchase of US Bonds. Iran not selling in Dollars drives these equation into the negative. Less bonds being sold needs to be countered…higher prices to make up for the loss. Once you understand that this scheme is what makes the whole system work you begin to see how the powers that be cannot allow anyone to challenge this status quo by going around it to sell oil for rupees, gold or whatever from Russia and India. The world reserve currency is the USD and this is why it is. Our system is strong because therr is an endless profit motive atleast until the oil runs out.

      Report Post » ChiefGeorge  
    • KAdams
      Posted on February 21, 2012 at 12:50am

      Ah, I completely forgot the ‘almighty dollar’ factor. *facepalm* Thanks Chief!

      Report Post »  
    • howcomeagain
      Posted on February 25, 2012 at 12:54pm

      Georgechief@ You are absolutely correct. Surprising how few people know this. Especially considering it takes about 30 seconds with a search browser. Thank you for posting.

      Report Post »  
  • Boycott the Media Let the People Decide
    Posted on February 20, 2012 at 10:44pm

    100% Barack Obama’s fault as sanctions are an act of war! Newton’s law of motion is best defined here….

    Report Post »  
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