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Oil may hit USD 150 on EU ban - Iran

Reuters cited Mr Ahmad Qalebani deputy oil minister of Iran as saying that oil prices could rise as high as USD 150 per barrel because of the European Union ban on imports of Iranian crude. Although a precise prediction cannot be made on oil prices, it seems we will witness USD 120 to USD 150 oil price per barrel in future.

Benchmark Brent crude prices rose to around USD 111.50 per barrel on expectations Iran's parliament will vote to halt exports to the European Union as early as next week in retaliation for EU plans to stop all Iranian crude imports by July.

Escalating tensions between Iran and Western allies over Tehran's nuclear program including Iranian threats to close the vital Straits of Hormuz have helped push up Brent crude prices by about USD 8 per barrel since mid December.

But analysts said that the world is likely to have more oil this summer thanks to additional output from Saudi Arabia, Iraq and Libya that will more than make up for any lost from Iran after the EU's ban is imposed on July 1st 2012 and this is likely to be reflected in oil prices.

Iran's parliament is due to debate a bill this week that would cut off oil supplies to the EU in a matter of days in response to a decision last Monday by the 27 EU member states to stop importing crude from Iran as of July.

The EU banned imports of oil from Iran on Monday and imposed a number of other economic sanctions, joining the United States in a new round of measures aimed at hindering Tehran's nuclear development program.

Mr Qalebani warned foreign oil companies to either renew their long term contracts with Tehran or face the consequences of losing their benefits from the OPEC's second largest producer.

(Source: Reuters)