Oil surges on Iranian fears
OIL prices surged yesterday after a defiant Iran banned sales to Britain and France, amid growing fears over the country’s nuclear ambitions.
Brent crude nudged over $121 a barrel – the highest level for eight months – as the International Atomic Energy Agency (IAEA) arrived in Tehran to assess first hand the Islamic Republic’s controversial nuclear programme.
Brent crude for April delivery settled up 0.4 per cent at $120.05, its first close above $120 since June.
Five inspectors have planned two days of meetings to try and get answers from Iran on whether its civilian nuclear energy scheme is a façade for researching atomic bombs.
The price of oil has climbed from around $106 a barrel at the start of the year on rising concerns over stability in the Middle East.
The country is the world’s fifth-largest oil exporter and outrage over its nuclear efforts has provoked an EU boycott of Iranian oil, due to be triggered on 1 July.
Iran’s retaliatory ban on sales to the UK and France is largely symbolic, since the two countries have already cut purchases, but the move is a sign of increasingly strained relations.
China, which buys around a fifth of Iran’s oil exports, yesterday gave a rare criticism of the country’s behaviour. A spokesperson said “we…do not approve of exerting pressure or using confrontation to resolve issues”.
Iran’s deputy oil minister Ahmad Qalebani suggested the Western crackdown would backfire, saying that in targeting Iranian oil the West had achieved only a surge in crude prices from $103 a barrel to $120, “and it will reach $150”.
GFT senior markets strategist David Morrison said oil could rise to $127 a barrel as the crisis unfolds.
The IAEA yesterday said it was hoping for “concrete results” after claims that the Iranian regime has been hiding its true intentions behind a wall of misinformation.
But chief UN nuclear inspector Herman Nackaerts warned that progress “may take a while”.