International sanctions on Iran's oil exports will continue to drive up oil prices globally because no viable alternative exists for the Islamic republic's output, Iran's envoy to OPEC was quoted as saying by the Mehr news agency yesterday.
If there were an assured substitute for a big oil exporter then the sanctions would not send a price shock to the market.... (But) conditions in different nations show that, in present circumstances, a substitute does not exist, Mohammad Ali Khatibi said.
He stated that oil prices will continue to rise in the market because of colder than usual winter weather in America and Europe, and unrest in Sudan, Syria and Nigeria impacting their oil exports.
Geopolitical tensions in the Middle East and the Persian Gulf, were also behind rising oil prices, he stressed.
Oil prices on dipped, to $100.52 a barrel for light sweet Texas crude and $117.20 a barrel for Brent crude, on worsening economic outlooks for several European countries. But they remained supported generally by the ongoing tensions over Iran.
Khatibi's comments followed assurances by Saudi Arabia that it could step in to pump more oil to make up for the 2.5 million barrels a day Iran exports, should Western sanctions make it necessary.
Iran has warned Saudi Arabia and other Gulf Arab states that it would view such intervention as unfriendly.
Khatibi himself said last month that, if Iran's neighbours compensate in such a fashion, they will be held responsible for what happens.
The European Union has declared a ban on Iranian oil imports that is being phased in through to July. The United States has imposed sanctions which expose any foreign company that does business with Iran's oil sector to US reprisals.
Thus far, two of Iran's most important oil customers, China and India, have refused to go along with the US sanctions, though Beijing has been holding energy supply talks with Saudi Arabia.
The Islamic view is much opposed to the Western view, India and China are the only countries that will purchase the bulk of the oil from Iran and will therefore demand lower prices. Iran claims there is no replacement source of oil, while the Saudi's and OPEC assure the world that they can increase production. The price of oil is not high today due to Iran's conflicts it hardly responsed to the continued threats from the Islamic nation, the price of oil, responds to many other factors and that is most assuredly political and economics in Europe. Sactions are continuing to have an internal effect on Iran. Other regional unrest and problems also effect the pricing, but little due to Iran's rhetoric.
Crude Oil Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3