Tuesday, October 30, 2012

Iran Finally Blinks in Terms of Sanctions Pressure

The Iranian defense minister said last weekend that his country has no plans to choke of maritime oil shipments through the Strait of Hormuz. In early 2012, Iranian threats to close the key shipping lane caused a ripple effect in the international oil market, pushing prices up to historic highs. U.S. President Barack Obama in April acknowledged there were problems in the global oil market but said the situation was secure enough to move ahead with tighter sanctions against Iran. An announcement from Iran that it was no longer considering closing the strait, however, may suggest western sanctions may be taking a toll on Tehran.
Iranian Defense Minister Brig. Gen. Ahmed Vahidi said Iran no longer has plans to close the Strait of Hormuz, a conduit for much of the world's maritime oil shipments. Sanctions imposed by the U.S. and European governments, he said, were "unjust," but his country as able to move beyond them.
"These two issues (closure of the Strait of Hormuz and sanctions) are not related and are totally independent of each other," he said.
His remarks are on stark contrast to when Iranian naval Cmdr. Ali Fadavi said in July that not even "a single drop of oil" would pass through the Strait of Hormuz if the Islamic republic were backed into a corner. Threats to close the strait are nothing new. Obama, coping with oil prices about the $100 per barrel mark in April, was forced to lather his talks of new economic pressure on Tehran with references to a release from the Strategic Petroleum Reserve. With Hurricane Sandy shutting down most of the eastern seaboard, including refineries in the region, movement in Monday's markets had little, if anything, to do with Iran.

Read more: http://oilprice.com/Geopolitics/Middle-East/Iran-Finally-Blinks-in-Terms-of-Sanctions-Pressure.html

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