Oil Crosses $100 On First Trading Day of 2012
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Oil prices jumped more than 1.5 percent to cross the $100 mark on Tuesday, the first trading day of 2012, amid new fears that rising tensions between the West and Iran could lead to a future disruption of crude supplies.
The spike occurred after Iran said it has test-fired two long-range missiles on Monday – a show of military might and perceived by the West as a sign of aggression as Iran continues on its nuclear programme.
Iran’s latest tests are part of a 10-day naval drill scheduled to end on Tuesday.
Oil prices jumped more than 1.5 percent to cross the $100 mark on Tuesday, the first trading day of 2012, amid new fears that rising tensions between the West and Iran could lead to a future disruption of crude supplies.
The spike occurred after Iran said it has test-fired two long-range missiles on Monday – a show of military might and perceived by the West as a sign of aggression as Iran continues on its nuclear programme.
Iran’s latest tests are part of a 10-day naval drill scheduled to end on Tuesday.
Following Iran’s test, fears of a supply disruption in the Strait of Hormuz, through which 40 percent of the world’s oil is shipped, sent the prices of oil up.
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Brent crude climbed $1.27 to $108.65 pbl on the first day of trading for 2012 while U.S. crude futures rose $1.69 to $100.52 pbl.
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[quote]Chief of Iran’s navy, Admiral Hibibollah Sayyari, said the test was a proof that the strategic and important oil transit way is “completely under our control.”[/quote]Iran’s nuclear tests come at a time when it is trying to avoid new sanctions on its oil industry.
On Saturday, United States President Barack Obama signed a law imposing hefty financial sanctions that could directly affect Iran’s oil exports. According to news agencies, the European Union is considering a similar sanction.
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