Over the weekend Iran announced they will no longer be selling crude to British and French Companies. A spokesman for the Ministry of Petroleum was quoted as saying, “Exporting crude to British and French companies has been stopped … we will sell our oil to new customers” What impact, if any, will this have on the global economy?
First off, the EU had already decided to stop importing crude from Iran in the middle of 2011 due to Iran’s insistence on continuing their disputed nuclear programs. It is the belief of many in the West that Iran’s nuclear program will ultimately build weapons.
Secondly, Saudi Arabia has announced it is prepared to supply extra oil to the EU. Efforts by Riyadh have been soundly criticized by Iranian officials.
These two ‘facts’, deflates the statement Iran was trying to make. It is the threat to a tiny waterway that has the world on full alert.
For a while now, the world has been preparing for an altercation in the Straits of Hormuz. The U.S. is now sending a fleet of warships, known as ‘Carrier Strike Group Nine’ on forays through the Straits to prevent any blockade of the incredibly important waterway. Iranian boats are now regularly shadowing our boats and nerves are beginning to fray.
All of this talk about the security in the Straits of Hormuz has shot oil to over $100 a barrel. One way or another it appears Iran is holding the fate of the world’s economy in their hands.
Do you believe the U.S. and the rest of the world should be playing harder against this threat?
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