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Iran threats to stop the flow of oil from the Gulf

December 28/2011

(Reuters) --  Iran's threat to stop the flow of oil from the Gulf supported crude prices on Wednesday and put world shares on the back foot.

Tehran said on Tuesday it would stop oil transiting through the Strait of Hormuz if sanctions were imposed on its crude exports over its nuclear ambitions, a move that could conceivably trigger military conflict with economies dependent on Gulf oil.

Brent crude oil steadied above USD 109 a barrel after climbing more than a dollar in the previous session. Prices have surged over 5 percent since December 16.

"The only way Iran would actually close Hormuz is when it is attacked and war breaks, but such a possibility appears low as no country would want to take the risk when growth worldwide was likely to slow down," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.

But he added the tensions would be a major source of volatility in 2012 along with the euro zone debt crisis. He expected Brent to trade between USD 105-110 in 2012.

Tags:naphta, oil.
Category:General News
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