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Oil And Gas Prices Soar Due to Iran Sanctions, Israel Attack Threats

  • There are reasons for that. Iran is not much dependent on US or Europe and exported merely a minuscule -16 percent of its total oil exports – to Europe. And it has already stopped the oil supply to two harshest critics of Iranian regime, France and Britain.
  • The bulk of its oil is bought by Asian nations –emerging powers like China and India- besides American allies Japan and South Korea.
  • While United States talks of tightening sanctions against Iran and Israel is planning to go for surgical strikes, it is common consumers across the world including the United States and Canada who would be badly affected by any war. Oil and gas prices would soar and everything in the market will become costlier due to the higher crude prices.
  • In many places in US people are already paying $3.51 a gallon and experts expect the prices to soar to at least $4.50 or even higher within months. In case of war on Iran it may go up even higher.
  • A report says, “Higher gas prices could dampen consumer spending and slow the recent improvement in the U.S. economy…A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion”.
  • Japan and South Korea are under tremendous pressure from US to stop buying crude from Iran. Japan had reiterated in meetings with U.S. officials that it wanted a waiver from the sanctions. The United States says it will punish financial institutions that deal with Iran’s central bank, the main clearing house for oil revenue. A country can earn a waiver from the sanctions if it significantly reduces trade with Iran. Still, cutting Iranian imports carries risks for Japan. The country’s reliance on imported energy has increased since the Fukushima nuclear power plant disaster last year.
  • Japan imports a significant part of its oil needs. It imported more than 300,000 barrels per day of Iran crude in 2011, mostly through long-term contracts, making it one of Tehran’s top global customers.
  • India has flatly refused US advice to stop importing Iranian oil. China too is not heading any warning from Washington.
  • An oil expert says, “This price juggernaut has taken on a life of its own since the Iran/Israeli threat flinging began and [the] boycott/sanctions war continues to ratchet upwards, and it’s been made worse by the big run in stocks since the start of the year”.

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