Iran playing chicken with West on crude oil price

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As tensions continue to rise between Iran and western countries, an Iranian ministry spokesman warned crude oil prices could double if an oil embargo is imposed on the country.

Foreign ministry spokesman Ramin Mehmanparast said an oil embargo would cause crude oil prices to swell to more than $250, crippling a fragile global economy, according to a Reuters.

“As soon as such an issue is raised seriously the oil price would soar to about $250 a barrel,” Mehmanparast said in a Shargh newspaper interview.

Tensions have been rising between Iran and Western powers over the country’s nuclear program, prompting the European Union and the U.S. to consider strong sanctions against the large crude oil exporter.

The U.S. Senate voted last week to impose new sanctions on the country’s central bank and barring companies that do business with the bank from opening operations in the U.S.

EU foreign minister issued their own sanctions on Friday, but they stopped short of an oil embargo on the country. EU foreign policy chief Catherine Ashton told The Wall Street Journal that an embargo was still “being debated.”

Oil prices climbed to near $102 a barrel today in Asia as the markets reacted to the new sanctions against Iran, the world’s third-biggest oil exporter at 2.2 million barrels per day.

European refiners said it was too early to comment on the consequences of a possible oil embargo. One refinery, Saras SpA, told The Journal that it didn’t “anticipate any supply problems” and wouldn’t reduce capacity if an embargo happened.

If an embargo did happen, refineries would likely see tighten margins, similar to what they saw during the Libyan civil war.

Categories: Crude oil, Middle East

39 Responses

  1. Glenn Beak says:

    The Iranians want the West to be afraid of increasing sanctions so are exaggerating the impact. Oil production in Iraq is increasing, possibly by 6 billion barrels per day by 2013. The Saudis are no fan of Iran and could also pick up the slack.

  2. Smilin' Bob says:

    It’s amazing that so many Americans want to treat Iran just like Hitler treated Poland.
    I few minutes studying history and govt should explain why we can’t nuke Iran or assasinate it’s leader.
    Even if we invade we will still pay market price for oil……….remember Iraq?

  3. HAVEN’T YOU FOLKS REALIZED THAT ALL THESE HOSTILITIES BETWEEN THE U.S. AND IRAN, IS OVER THE DEFENSE OF THE U.S. SPOILED BRAT i.e. THE JEWISH STATE OF ISRAEL ??? IT’S NOT ENOUGH THAT ISRAEL IS OUR NUMBER ONE WELFARE BASKET CASE, NOW WE ARE SO CLOSE FOR A WAR TO PROTECT THE INTERESTS OF ISRAEL. AND HOW IS GOING TO GO FIGHT AND DIE IN THIS WAR ?? AS USUAL, SONS AND DAUGHTERS OF BLUE-COLLAR WORKING AMERICAN PARENTS. THE OIL INDUSTRY BIG FAT CATS ARE GOING TO HIDE THEIR SPOILED AND COWARD BRATS IN COLLEGE CAMPUSES, CANADA, OR EUROPE, TO KEEP THEM AWAY FRO HARM’S WAY. IRAN IS NOT SENDING PLANES OVER SOVEREIGN U.S. TERRITORIES SPYING ON US, AND WE ARE SENDING PLANES OVER IRAN, PROBABLY FROM BASES IN ISRAEL. WHO’S PROVOKING WAR ??

  4. Observer says:

    Bring it on Mr. Foreign Ministry Spokesman and since Iran is without refinery capacity of significance, Iran is of necessity a massive importer of gasoline.

    Depending on whether your prediction of the market price of crude is accurate, your new import price for gasoline might start at say, $6 a gallon give or take.

    Then again your Chicom allies might be importers of your crude at a much lower price and then in return export cheap product to you. In any event business will become more and more complicated and subject to diseconomies of all sorts. Allah Akbar!!! Yeah baby!

  5. richeyrich says:

    Drill baby, drill.

  6. ntangle says:

    Does anyone remember the big losers from the 1973 oil embargo? Venezuela was the big winner in that piece of stupidity.
    ————-
    What losers? (Besides consumers of course). Anybody that owned oil in the ground benefited from its price doubling overnight. And what was the stupidity? Supporting Israel in the Yom Kippur war?

  7. blue says:

    So tree-huggers are brain dead? No group ,on average, is dumber than Conservatives. Partially because they aspire to it and but mostly because they are very proud of it. Those of slow wit are revered by the GOP base. It looks even more moronic when they try to use it as an insult against those with whom they do not agree.

  8. Godiva55 says:

    The alternatives are to invade and have another (at minimum) Iraq
    +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
    Dearest, we (and the rest of the world) went to Iraq to remove Saddam Hussein.
    As is ovbvious by now, Iraq was not about oil, never was or will be.
    Iraq was about Democracy.

  9. Godiva55 says:

    Great comment, but insert “liberal” in front of the pee word.

    Price per barrel doubling?? Well, that’s just fine!
    We have endangered lizards and bugs to protect instead of drilling our own oil, so double price is fine with us!
    Tree-hugging liberal whackadoodles don’t mind paying extra.
    Triple it, why doncha.
    Hell, the USA is made of $$!

  10. tboyinhouston says:

    Soooooo, people suggest blowing up 100 million people because a few jag off clerics run a country? Mkaaaaaaayyyyy

  11. GDI says:

    Come on folks, this is just more posturing. If Iranian production drops yes, the price will go up, but the other oil producing countries will take the opportunity to make more money by filling the gap. The people that will be hurt the worst are the Iranians themselves.

    Does anyone remember the big losers from the 1973 oil embargo? Venezuela was the big winner in that piece of stupidity.

  12. Hellscreamgold says:

    Oil skyrockets to $250 a barrel?

    Sounds like food and other resources oil-producing countries need skyrocket to $250 a bushel, etc.

    The world should get smart and tie the cost of necessary things (like foodstuffs) to the cost of oil to these countries. Let’s see what OPEC thinks when it costs them a ton of money for their coffee and tea when it costs the same as oil.

  13. Seriously? says:

    Take oil of the commodities market so speculators can’t control the price of it and you can put an embargo on Iran no problem. Never happen though…

  14. printzapper says:

    Check out all people who are ready to believe a sworn enemy at face value. You all are doing exactly what he intended– showing your fear. Why not let the embargo do it’s thing, and if gets too bad, sell your SUV and get something with better gas mileage? That way we don’t have another rogue country that hates the US with nukes. The alternatives are to invade and have another (at minimum) Iraq or just let things stay the way they are and await Iran’s announcement that they’ve detonated a device.

  15. Paul says:

    w00t, what would that make us?

    Right on, Mai-Kat.

    Yeah, Faye…because we “all know” how much those “tree-huggers” are running things.

    We could probably be off the electric grid…and possibly be off of oil and gas altogether in less than a decade if we really tried. It’s just a shame that it’s almost 2012 and we’re still too busy arguing about oil and gas prices.

  16. Database Guy says:

    Americans warn of alternative fuel research.

  17. joe says:

    Whats funny is that the US won’t let there own oil companies drill for more oil off the coasts of Maine all the way down to florida, and Alaska all the way down to the bottom of California. Instead of letting our own companies find our own oil, they would rather go to IRAN?

  18. Trail Tramp says:

    Hot air? Remember the spike in oil prices over the rumors of lost exports from Egypt and Libya? An outright cut off by Iran would cause panic buying.

  19. Trail Tramp says:

    Drill here, drill often.

  20. Daniel says:

    Saudi Arabia could and should easily replace whatever is lost if an oil embargo is put in place. Saudi Arabia easily has enough capacity to more than make up for whatever is lost from Iran. This is a bunch of hot air being blown from Iran!!!!

  21. Ogre 1 says:

    And he was smoking what again? Saudi Arabia can EASILY pick up Iran’s slack. EASILY.

  22. Rick says:

    Thank goodness that we are dependent on our good friends who have plenty of oil. Thank goodness we have our buddies the Russians to carry us into space. We are so lucky.

  23. Faye says:

    Way to go Obama. Make sure that pipeline doesn’t come this way. You don’t want that to be a problem for you election. My goodness that might cause all those tree huggers to not vote for you. Can’t have that. Your dismal attempt at being president has already lost so much support you can’t disappoint this brain dead bunch. We can just walk to work. It will be good for us.

  24. Lamer says:

    Correct me if I’m wrong, but wouldn’t insinuating that prices would double on an Iranian embargo mean that Iran controls half of the world’s oil supply? In know that’s not the case, but to say “hey if you take our product off the market, prices will double” SHOULD mean “Hey if you take our product off the market, there’ll only be half as much avaialble as before. So prices will double.” Further more, this embargo applies to the “west”, not China, Russia, India etc.

  25. txloanguy says:

    OPEC has already tried that, and Obama wants to restrict drilling in the US and wants to slow walk the XL pipeline?

  26. Joseph Kubica says:

    Doesn’t matter to us! As soon as we get that new pipeline built from Canada …… we are going to build that pipeline – aren’t we?

  27. Keneth Hubbard says:

    Really ? , those fools need to be delt with.

  28. jayhawkminer says:

    If obomma thinks that oil could go to 250 a barrel with an embargo (or any other scheme) he’ll fight to his last breathe to do exactly that. I can’t think of a better gift to this guy than to have us paying outragious prices for something we SHOULD be getting from our own country.

  29. itsmetres says:

    That country as a whole hates us, why not just clean the slate off and call in New Texas.

  30. Cj n Cut nShoot, TX says:

    If Dubya had to invade a country, it would have made more sense and benefited everyone more if he had moved on to Iran and then we would have $1/gal. gasoline and fewer tensions in the middle east – not to mention payback for some very dastardly things in the past.

  31. Thrudahoop says:

    Too much opium being absorbed in Iran. More hopheads per capita than anywhere in the world.

  32. Hank says:

    I told that idiot George W that instead of Iraq he should be invading Iran, but nooooo…

  33. IranSucks says:

    Let’s play Cowboys and Iranians!

  34. Cris says:

    That man needs to be taken out. Can’t believe he hasn’t been up to this point. Just one well placed sniper bullet.

  35. Mai-Kat says:

    Passed time for us to be switching to renewable energy

  36. w00t says:

    Blow the savages up and take their oil.

  37. BigO says:

    In that case O’bama better get that Canadian pipeline open ASAP.

  38. James T Wilson says:

    And we can warn Iran of pending Nuclear DISASTER. When they begin an embargo, we can fly some nuclear tipped cruise missles over their major cities, and turn them into unholy ghost towns, full of dead sand people!!!