Connect to share and comment

The big picture view of an ever-changing global economy.

Oil prices rise again on Iran worries

Crude prices move higher again, this time thanks to the European Union.
Strait of hormuz 1Enlarge
Iranian Army soldiers stand guard on a military speed boat during the 'Velayat-90' navy exercises in the Strait of Hormuz in southern Iran on December 28, 2011. (ALI MOHAMMADI/AFP/Getty Images)

There was another roil for oil today. And, once again, you can blame rising tensions with Iran.

The European Union announced a preliminary agreement to ban Iranian oil imports, though EU diplomats did not say when the embargo would take place. 

“We want to tighten sanctions on Iran — the things that have been mentioned are the oil sector and the financial sector,” EU spokesman Michael Mann told Bloomberg BusinessWeek.

The US State Department welcomed the move, which follows Iran's threat last week to close the Straits of Hormuz, a key oil shipping lane:

“This is consistent with tightening the noose around Iran economically,” State Department spokeswoman Victoria Nuland said at a briefing in Washington, as reported by Bloomberg. “The place to get Iran’s attention is in the oil sector.”

For its part, Iran says it can handle this latest threat.

"We could very easily replace those customers," S. M. Qamsari, International Director of the National Iranian Oil Co (NIOC) told Reuters over the phone

Crude for February delivery rose 26 cents to $103.22 a barrel in New York trading. That's the highest level since last May.

For all of 2011, oil futures climbed 8.2 percent. 

For more from Thomas Mucha on Twitter: 

http://www.globalpost.com/dispatches/globalpost-blogs/macro/oil-prices-rise-again-iran-worries

.

Featured Slideshow

The running of the bulls commenced in Pamplona, Spain (PHOTOS)

Injuries abound during the first days of the San Fermin festival.