Iran General News Iran conflict could send oil to high: Raymond James

Iran conflict could send oil to high: Raymond James

-

ImageReuters: Oil prices may surge to a record if conflict over Iran's uranium enrichment leads the oil producer to slash exports or block the Strait of Hormuz, Raymond James analysts said in a Monday research note. ImageNEW YORK (Reuters) – Oil prices may surge to a record if conflict over Iran's uranium enrichment leads the oil producer to slash exports or block the Strait of Hormuz, Raymond James analysts said in a Monday research note.

The note says that the risks of a military strike against Iran's nuclear facilities are rising, which could potentially cut off the OPEC nation's 2-million-barrels-a-day of exports.

It could also lead to a blockage of 20 percent of global oil supplies which are transported through the Gulf's Strait of Hormuz, the note said.

While the threat of a disruption due to the standoff between the West and Tehran over its nuclear program has pushed up oil prices from time to time over recent years, oil markets have remained calm amid rising tensions during the past month.

"With oil (prices) now around $70 a barrel we would argue that the market isn't factoring in the risks," said Pavel Molchanov, one of the report's authors, in a telephone interview. "Catalysts for higher oil prices could include more saber-rattling, or Iran reverting back to a more confrontational stance."

Iran has touted its uranium enrichment as a peaceful program for internal energy markets, while rejecting Western charges that it seeks to build nuclear weapons.

Officials from Iran and six world powers met last week, and Western officials said Iran took a conciliatory tone, agreeing "in principle" to Western demands it ship its enriched uranium outside the country for reprocessing.

But Raymond James analysts see a greater than 50 percent chance of military strikes against Iran over the next year, a scenario they say would prompt Iran to cut off oil exports and potentially block the strait.

"The market is aware of this, but seems to be factoring in extremely low probability it will happen," Molchanov said.

Oil prices could rise to a record above the $147 a barrel they reached in July 2008 if Iran is attacked, he added.

U.S. crude futures rose 30 cents a barrel to $70.28 at 6:24 p.m. GMT.

(Reporting by Joshua Schneyer; Editing by Christian Wiessner)

Latest news

Tehran’s Rejection of Compromise Is an Invitation to Maximum Pressure

Iran has formally rejected all Western efforts to at compromise during the current impasse over prospective restoration of the...

Iran’s Officials Admit to Playing With the Exchange Rate To Run Their Shattered Economy

'Increasing the price of the dollar and keeping the dollar artificially high is a reality accepted by all elements...

Misogynous Law Bans Iran Ski Coach From Travelling With Her Team

The head coach of Iran’s national Alpine skiing team was banned from accompanying her team to a competition in...

Amnesty on Saravan Protests

Amnesty International said that Iran’s Revolutionary Guards illegally used lethal force to subdue unarmed fuel porters in Saravan, Sistan...

Iran’s Lost Dreams About the New US Administration and Its Crises

On the front pages of Iran’s state-run dailies, especially those affiliated with the faction of Iran’s supreme leader Ali...

Pensioner Protests Hint at Bigger Iran Protests

Iranian pensioners held nationwide protests for the fourth week in a row on Sunday, but this time it coincided...

Must read

Britain pushes for sanctions at UN after Iran declares nuclear intentions

The Times: Britain, France and Germany were drafting a...

Iran: Human Rights Situation in September 2020

As with every month, Iran Human Rights Monitor has...

You might also likeRELATED
Recommended to you