Economy and Finance

Global Oil Prices Predicted to Soar by 50 Percent

Iranian officials predicted that global oil prices would soar by 50 per cent in the wake of EU sanctions as the country’s oil minister declared exports to “some countries” would be cut off.

Ed Thomas

Published on

January 30, 2012

In what will be seen as evidence of brinksmanship, Iran’s parliament postponed debate on a proposal immediately to halt oil deliveries to the EU, which accounts for 20 per cent of Tehran’s exports of crude.

Despite postponing the parliamentary debate, Rostam Qasemi, Iran’s energy minister, promised that exports to some countries, which he did not name, would be ended “soon”.

Experts from the International Atomic Energy Agency arrived in Tehran on a three-day mission to investigate the suspected military dimensions of Iran’s nuclear programme to a flurry of anti-Western invective.

A damning report released by the body in November accused Iran of military-related atomic activities for the first time.

The visit comes when Iran’s relationship with the West is a fraught as at any time in recent years after the regime reacted with fury to a decision by the EU and the US this month to sanction the country’s central bank and oil sector.

With the sanctions carrying the potential to trigger a deep economic crisis in the country, Iran has responded with a mixture of belligerence and conciliation.

That the government of Mahmoud Ahmadinejad, Iran’s prime minister, has allowed the inspectors in at all has angered hardliners.

Demonstrator met the inspectors at Tehran’s airport carrying photographs of a nuclear scientist assassinated in the city earlier this month.

Ali Akhbar Salehi, the Iranian foreign minister who is seen as relatively moderate, spoke of his optimism about the IAEA’s visit, promising that all the inspectors’ questions would be answered.

“We have nothing to hide and Iran has no clandestine activities,” he said.

But the hawkish speaker of parliament, Ali Larijani, was more hostile, threatening that Iran would sever relations with the IAEA if it showed that it was a “tool” of the West.

The EU is phasing in its sanctions on importing Iranian oil over six months to allow economically troubled Greece, Italy and Spain, Tehran’s biggest European customers, to find alternative markets.