Free Press Journal

Oil at 9- mth high after Iran cuts supply



Oil prices jumped to a nine- month high near USD 105 a barrel in Asia on Monday after Iran said it halted crude exports to Britain and France in an escalation of a dispute over the Middle Eastern countrys nuclear programme


Benchmark crude was up USD 1.75 to USD 104.99 per barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

Earlier in the day, it rose to USD 105.21, the highest since May. The contract rose 93 cents to settle at USD 103.24 per barrel in New York on Friday. Brent crude was up USD 1.52 at USD 121.10 per barrel in London.

Tehran will cut oil exports to more EU nations if they remain ” hostile,” the deputy oil minister who heads Irans state oil company said, a day after sales were halted to France and Britain. Exports to Spain, Greece, Italy, Portugal, Germany and the Netherlands would be stopped, Ahmad Qalebani said, quoted by Mehr news agency.

” Certainly if the hostile actions of some European countries continue, the export of oil to these countries will be cut,” said Qalebani, who runs the National Iranian Oil Company.

The 27- nation EU accounts for about 18 per cent of Irans oil exports. The EU sanctions along with other punitive measures imposed by the US are part of Western efforts to derail Irans disputed nuclear programme, which the West fears is aimed at developing atomic weapons.

Oil prices were also boosted by Chinas decision to boost money supply in a bid to spur lending and economic growth. Chinas central bank said on Saturday it will lower the ratio of funds that banks must hold as reserves, a move that frees tens of billions of dollars.

Iran sends only around a fifth of its exports to the EU, with Asian countries taking the lions share, according to US and international oil agencies. The EUs share of Iranian sales came to around 600,000 barrels a day over the period, out of total exports of 2.5 million barrels a day, the agency said.