Oil prices rise amid Iran crackdown fears
Oil prices rose today amid concern at Iran’s reaction to tough United Nations sanctions aimed at tempering the country’s nuclear programme.
A barrel of oil rose by 58 cents to $63 in London following the Christmas break, while it lifted 50 cents to $62.91 in New York.
The price hike followed declines earlier this month as a mild winter and reports of slower economic growth in the US eased pressure on demand for heating oil.
The Organisation of Petroleum Exporting Countries (Opec) has already said it is keen to tighten up worldwide supplies in a bid to stop prices falling.
However, oil prices climbed following concern that Iran – one of the world’s largest oil producers – could ignore calls for it to tone down its nuclear ambitions.
The UN Security Council voted unanimously on Saturday to impose sanctions on Iran for refusing to suspend its uranium enrichment work.
The crackdown, which comes after two months of negotiations, has increased international pressure on Tehran to prove it is not trying to make nuclear weapons.
The sanctions orders all countries to stop supplying Iran with materials and technology that could contribute to its nuclear and missile programmes.
However, the Iranian government immediately rejected the resolution and global powers are now waiting to see if oil supply will be hit.
Iran has insisted its enrichment programme is intended to produce fuel for nuclear reactors to generate electricity – and not weapons production.
An oil analyst at Fimat USA said: “Don’t look for a major washout in prices any time soon. Trouble in the world’s most important oil-producing region is not going away.”
There are also worries oil prices could climb further if there is a change in US winter weather conditions, which have so far been milder than expected.
Motorists felt the pinch in June when a barrel of oil shot to $73 in New York after Iran’s supreme leader warned oil supplies could be jeopardised if the West made the “wrong move” over Iran’s nuclear policy.
A barrel of crude eventually hit a record $78 in July with no end in sight to fighting in Lebanon between Hezbollah militants and Israel or a resolution to the Iran row.
