Iran fears send oil soaring above $70 a barrel
Oil soared above $70 a barrel on Tuesday as Iran defied world pressure to halt its nuclear program, raising new fears of a cut in supplies from the world's fourth biggest crude exporter.
In London, North Sea Brent crude oil jumped 74 cents to set the new all-time high as Iran and the West exchanged increasingly sharp words over the Islamic Republic's determination to push ahead with uranium enrichment. US West Texas Intermediate crude climbed to $70.88, smashing through its previous record of $70.85. “The Iranian situation is making us all very nervous... We don't seem to be getting anywhere on the diplomatic solutions,” said Deborah White, an analyst at SGCIB in Paris.
Brent, an indicator of the cost of Europe’s oil imports, was up 14 cents at $71.60 at 1344 GMT while WTI was up 10 cents at $70.49. High US oil stocks have helped push WTI below Brent.
Iran is not the market’s only concern. With almost a quarter of Nigerian oil production still shut after rebel attacks two months ago, oil consumers feel almost as vulnerable as they did during the Arab oil embargo in the 1970s. Oil prices have soared from $20 at the start of 2002 and are now nearing the inflation-adjusted peaks of over $80 hit in 1980, the year after the Iranian revolution.
Initially fired by strong demand from the US, China and India, the rise has accelerated over the past year on worries over supplies.
Iraq’s once significant oil industry is in crisis, Nigerian exports have been slashed by rebel attacks on the world’s eighth biggest exporter and consumers are worried that Iran's exports could fall victim to its nuclear dispute with the West.
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