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Iran oil: Threat to cut off EU impacts oil prices

Oil prices fluctuated on the news that Iran might have cut off supplies to six European countries.

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NEW YORK, NY - FEBRUARY 15: Oil traders work on the floor of the New York Mercantile Exchange on February 15, 2012 in New York City. As Iran reportedly may have cut oil exports to six European countries in retaliation for economic sactions levied on them, oil has risen to its highest point in a month with crude futures in New York increasing as much as 1.8 percent. (Photo by Spencer Platt/Getty Images) (Spencer Platt/AFP/Getty Images)

Reports on Wednesday that Iran had cut off oil exports to six European Union nations – denied by the Iranian oil ministry – made European oil prices jump to a six-month high, reported The Wall Street Journal.

The Guardian reported that Brent crude oil prices were up $1 to $118.35 after the announcement.

Early on Wednesday, The New York Times said that Iran had warned its six largest European clients that it might cut off their supplies of Iranian oil before Europe had a chance to impose a planned oil embargo on Iran.

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“Iran’s official Islamic Republic News Agency said the warning was conveyed to the ambassadors of Italy, Spain, France, the Netherlands, Greece and Portugal in separate meetings at the Foreign Ministry in Tehran,” reported The Times.

Press TV, Iran’s state-sponsored television channel, claimed that supplies had already been cut, but a spokesman for Iran’s oil ministry told Reuters, "We deny this report ... If such a decision is made, it will be announced by Iran's Supreme National Security Council.”

Iran’s news agency said, “European people should know that if Iran changes destinations of the oil it gives to them, the responsibility will rest with the European governments themselves,” according to The Times.

The US and EU have been considering tougher sanctions against a defiant Iran which just announced progress in its nuclear program. Tensions have been escalating as Iran also threatened to cut off access to the Strait of Hormuz last month, a vital waterway for commerce and exports.

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Reuters reported at the close of trading in New York today that oil had settled near an eight-month high on the uncertainty out of Iran. Brent benchmark crude for April delivery settled in London at $118.93 a barrel on the Intercontinental Exchange, which the news agency said was a $1.58 rise and the highest close since June 14. Crude for delivery next month in the US had its highest close since Jan 11 at $101.80, a rise of $1.06.

http://www.globalpost.com/dispatch/news/regions/middle-east/120215/iran-oil-threat-cut-eu-impacts-oil-prices