Oil is in the crosshairs as the prospect of confrontation brews between the U.S. and Iran. At least, that’s how Iranian officials would have it.
A top military aide to Iran’s supreme leader Ayatollah Ali Khamenei, Yahya Rahim Safavi, warned over the weekend that “The first bullet fired in the Persian Gulf will push oil prices above $100.” He added, “This would be unbearable to America, Europe and the U.S. allies like Japan and South Korea.”
More than a million barrels of oil per day have been wiped off the market as U.S. sanctions, imposed after the Donald Trump administration withdrew from the 2015 Iran nuclear deal last year, endeavor to bring the exports of OPEC’s third-largest producer to zero. This has contributed to the crippling of Iran’s economy, which the U.S. administration says will continue unless Iran “acts like a normal country” and ceases its support of terrorist proxies in the region and ballistic missile testing.
Iran has responded to the sanctions by threatening to ditch its obligations under the nuclear deal — which had promised economic relief in exchange for limits to its nuclear development — and return to higher levels of uranium enrichment.
A series of attacks in the United Arab Emirates (UAE) and Saudi Arabia that are being blamed on Iran have now pushed tensions to new highs, and prompted the U.S. to deploy more troops and military hardware to the region. In an area responsible for the shipment of one-third of the world’s seaborne oil, just how high could military confrontation — or indeed, an outright war — send the price of crude?
Source: CNBC
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