Oil prices surge higher after Iran threatens to close the Hormuz Strait
BonTradeOil prices for Brent and WTI crude surged higher amid a stronger US dollar after reports that Iran was set to begin war games in the Strait of Hormuz to practice closing down the key chokepoint which concentrates 30 percent of global seaborne oil shipments.
Latest Oil Prices
In London, Brent crude oil futures for January 2012 delivery was trading at $109.66 a barrel, 18.20 GMT or up 2.2 percent, while US WTI Light crude oil was at $100.23, or 2.3 percent higher.
“We Will Make The World Insecure”
Today’s shock surge in crude oil prices came after Iranian MP Parviz Sorouri of the Majlis National Security and Foreign Policy Committee announced:
“Currently, the Middle East region supplies 70 percent of the world’s energy needs, (most of) which are transported through the Strait of Hormuz. We will hold an exercise to close the Strait of Hormuz in the near future. If the world wants to make the region insecure, we will make the world insecure.”
Hormuz is one of the world’s most important waterways, with daily flow of about 15 million barrels of oil. That’s 90 percent of Persian Gulf Exports and 40 percent of global consumption.
Oil Prices Over $200 a Barrel?
Meanwhile, Iranian Foreign Ministry Spokesman Ramin Mehman Parast said if the West seriously considers blocking Tehran’s ability to export oil, the global price of crude would more than double.
“As soon as such an issue is raised seriously, the oil price would soar to above $250 a barrel.” Mehman-Parast told the Persian-language daily, Sharq, on Sunday 4th December.
Many world analysts have warned that they perceive a price for oil somewhere between $200 to $300 per barrel in case action is taken against Iran.
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Oil prices surge higher after Iran threatens to close the Hormuz Strait
