A final decision by the European Union will not come before the end of January and would be implemented in stages to avoid major disruptions in global oil supplies. But the move by some of Iran’s most important oil customers appears to underscore the resolve of Western allies to impose toughest round of sanctions on Iran to date, increasing pressure on Tehran to stop enriching uranium and negotiate an end to what Western leaders argue is an accelerating program to build a nuclear bomb.
This should get us some $125 a barrel oil and maybe some tense times in the Strait of Hormuz going forward. I guess it would be up to Iran if they actually tried to close the Strait or not. In any case quite a few barrels of oil will be kept off the world market and USO (United States Oil ETF) might be a good play in the next few months.
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