US WTI oil futures open Thursday’s trading session back under $100 after Saudi Arabia said it would offset any loss of supply from a threatened Iranian blockade of a crucial tanker route in the Middle East, the Strait of Hormuz.<\/p>\n
Latest WTI Oil Price<\/strong><\/p>\n US Light crude oil futures for February 2012 delivery was trading at $99.53 a barrel, 07.42 GMT this morning in electronic trading on the NYMEX.<\/p>\n The US oil contract closed yesterday’s trading session at $99.69 a barrel, or 1.6 percent lower on the day.<\/p>\n Middle East Supply Debate<\/strong><\/p>\n On Tuesday, Iran\u2019s vice president said his country was ready to close the Strait of Hormuz if western nations embargoed the country\u2019s oil because of its ongoing nuclear programme. The head of the country\u2019s navy added yesterday that his fleet could block the strait.<\/p>\n A Saudi Arabian oil ministry official said that Saudi Arabia and other Gulf producers were ready to provide more oil if Iran tried to block the strait.<\/p>\n He didn\u2019t specify other routes that could be used to transport oil, although they would probably be longer and more expensive for getting crude to the region\u2019s customers.<\/p>\n Relations between Saudi Arabia and Iran have soured significantly in recent months, though a recent meeting of the oil producer’s cartel, Opec, in which the two are leading members, ended in an agreement to maintain output at current levels.<\/p>\n Iran is the world’s fourth largest oil producer, pumping 4 million barrels a day, and oil exports make up 80 percent of Iran’s income.<\/p>\n Empty Threats?<\/strong><\/p>\n Thorbj\u00f8rn Bak Jensen, oil analyst with Global Risk Management, said: “The threat by Iran to close the strait of Hormuz supported the oil market yesterday, but the effect is fading today as it will probably be empty threats, as they cannot stop the flow for a longer period due to the amount of US hardware in the area.”<\/p>\n The EU is considering targeting Iran’s oil industry after last month’s attack on the UK embassy in Tehran, which was widely perceived as having tacit government support.<\/p>\n Tehran knows that a sudden rise in oil prices would come at a dangerous time for the west, with the sovereign debt crisis in the eurozone threatening to drag the rest of the world into a double dip recession.<\/p>\n