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July 2, 2022
BUSINESS

Oil prices jump to 9-month high after Iran cuts exports

Oil prices jumped to a nine-month high near USD 105 a barrel Monday in Asia 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, Foxnews informs. Benchmark crude was up USD 1.50 to USD 104.74 per barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Earlier in the day, it rose to USD 105.21, the highest since May. The contract rose 93 cents to settle at USD 103.24 per barrel in New York on Friday. Brent crude was up USD 1.43 at USD 121.01 per barrel in London. Iran’s oil ministry said 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. 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. The EU sanctions along with other punitive measures imposed by the U.S. are part of Western efforts to derail Iran’s disputed nuclear program, which the West fears is aimed at developing atomic weapons. Iran denies the charges, and says its program is for peaceful purposes. According to Wall Street Journal, analysts said Iran’s announcement would likely have minimal impact on supplies, because only about 3 percent of France’s oil consumption is from Iranian sources, while Britain had not imported oil from the Islamic republic in six months.“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.” Oil has jumped from USD 96 earlier this month amid optimism the global economy may grow more this year than previously expected. “Building economic momentum has the potential to pull oil prices higher for the next 12 to 24 months,” J.P. Morgan said in a report.

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