Oil prices reached towards $100 per barrel mark after tensions in Middle East started boiling up again. The root cause driving oil prices back and forth is Iran and its tensions with United States. The country has again issued a threat to block crude shipments from Persian Gulf, after the decision of European Union to put an embargo on Iranian oil imports seems to be widely expected.
March delivery’s benchmark oil increased by 9 cents, settling at a value of $99.67 per barrel during electronic trading, around mid morning Bangkok time, at the New York Mercantile Exchange. On Monday in New York, the contract of benchmark oil for March delivery had increased by $1.25 to settle at a value of $99.58 per barrel.
On the other hand, at the ICE futures exchange in London, price of Brent crude remained unchanged, as it settled at a value of $110.58 per barrel.
Iran has been warning against the shutdown of Strait Of Hormuz pass if the West imposes sanctions on it. As the week started, the European Union said that their oil refineries will not continue to buy crude oil from Iran after July. Moreover, it also froze the assets of the country’s central bank. The sanctions are being imposed by the European Union to impel Iran to talk to the West regarding its prestigious nuclear program. The country’s government has said that its nuclear program is intact and peaceful, however, nations in the West are suspicious of it trying to construct nuclear weapons.
Outside of the West, Iran can sell its oil to one potential buyer: China and if things between the West and Iran get strained further, this means China will be subjected to get some pretty good deals at the hands of Iran.
