Gas and oil prices soared in the US as Iran halted some crude exports. Investors predict that the energy demand will rise as Europe moves closer towards bailing out Greece. Analysts warned that oil speculation might also push prices higher along with the Iranian situation. It is predicted that Iran’s stand would have a negligible impact on supplies as only 3% of Iranian oil goes to France, and the UK has not imported oil from Iran in six months. The real impact of Iran’s s announcement would be on oil prices, which would affect gasoline prices worldwide.
The prices reflect the mounting tension between Iran and the West. Halting a tiny amount of crude exports poses no threat to Iran. Indeed, it has managed to claim headlines and resulted in soaring prices worldwide. Iran would encourage the resulting price rise.
The Iranian stand brought forth many predictions regarding gas prices. One of them was that gas price would rise to $5 a gallon by summer. Respected analysts claim this prediction as futile and nonsense. Analysts predict gasoline prices would hover between $3.75 to $4.25 when they peak during spring.
Iran’s move was in retaliation to the EU and US sanctions on its nuclear strategy. Around 18% of Iran’s oil export goes towards countries in the EU. The EU states that the disruption of supply from Iran will be of little consequence since it has stockpiled sufficient supplies of oil and petroleum products.
The West fears that Iran is using nuclear strategy to develop atomic bombs. Iran denies the charge and claims it is for peaceful purposes. The West is unconvinced and has imposed sanctions to discourage Iran.
Oil prices also soared due to the hope created by the Greece bailout and China’s decision to boost the money supply. The ratio that banks must hold as reserves has been lowered. This move frees tens of billions of dollars into the market.