Iranian crude holding over $100 in Asian markets

TEHRAN - Iranian crude oil has traded at over $100 per barrel with Asian refineries this week as the Iranian parliament forwarded a proposal to block the strategic Strait of Hormuz to prevent the passage of tankers that carry oil to countries that have imposed sanctions on Iran, the Mehr News Agency reported.

The measure was response to the European Union’s oil embargo on Iran that took effect on July 1 as well as a U.S. law that penalizes countries that do business with the Central Bank of Iran by denying their banks access to the United States market. The law came into force on June 28.

On June 9 Iran slammed fellow OPEC members Saudi Arabia, Kuwait and the United Arab Emirates as oil quota "violators", accusing them of depressing global crude prices by over-pumping.

Iran's OPEC representative, Mohammad Ali Khatibi, said Tehran had officially protested to OPEC that Saudi Arabia was "saturating the market" under pressure from the United States and the European Union, according to the IRNA News Agency.

"It is not right that two or three countries compensate for a country that is being sanctioned. OPEC members should not work against each other," Khatibi was quoted as saying.

On June 30 Iranian Oil Minister Rostam Qasemi called for an emergency OPEC meeting, saying the current market value of oil has become "illogical."

Some OPEC countries including Venezuela and Algeria responded to Iran’s call for emergency meeting, a move which was influential in pushing prices up.

Qasemi had said at a recent OPEC meeting in Vienna the member states agreed to hold emergency meeting if oil prices fell below $100 per barrel.

Qasemi said that if OPEC members do not observe their quota and the organization's production ceiling of 30 million barrel per day, the market will fall into chaos.

Brent crude was trading at $95.51 per barrel in London on Friday.

Oil prices surge on Iran tensions, Norway strike

By AFP

Oil prices shot up Tuesday on fresh tensions over Iran, where lawmakers threatened to shut the Strait of Hormuz in retaliation for oil sanctions, and after a strike shuttered production in Norway.

New York's main contract, light sweet crude for August, soared $3.91 to close at $87.66 a barrel.

In London trade, Brent North Sea crude for delivery in August settled at $100.68 a barrel, jumping $3.34 from Monday's closing level.

"With Iran oil out and Norway on strike it is giving the oil market reason to bounce!" said Phil Flynn at Price Futures Group.

Crude prices had fallen Monday in the wake of weak economic data in China, the world's biggest energy consumer; the first fall in US manufacturing in three years; and as markets assessed the impact of a European Union embargo on Iranian oil.

Full implementation of an EU embargo on Iranian oil took effect on Sunday, provoking anger in Tehran, which says the measures will hurt talks with world powers over its contested nuclear activities.

On Tuesday, oil prices surged higher after Iran test-fired missiles into its central desert region, drawing a US warning that the tests were in violation of UN resolutions that ban Iran from any ballistic weapons activity.

Meanwhile, some 120 lawmakers in Iran's 290-seat parliament backed a draft bill calling for the strategic Strait of Hormuz to be closed to oil tankers headed to Europe in retaliation for an EU embargo on Iranian crude.

Oil market observer bodies and analysts say the EU embargo, coupled with US financial sanctions ramped up on Thursday, are gutting Iran's vital oil exports, which account for half of government revenues.

The International Energy Agency says Iranian crude exports in May appear to have slipped to 1.5 million barrels per day (mbpd) as the market braced for the embargo, which has been phased in since being announced January 23.

Oil prices also gained support from a 10-day-old strike by more than 700 North Sea oil workers in Norway. The union action over pensions has cut about 10 percent of the total production of the world's eighth-largest oil exporter, according to the Norwegian Oil Industry Association.