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Iran Tensions Are Rumored To Push Up Oil Prices  

in International Business

Iran Tensions Are Rumored To Push Up Oil Prices  

After Iran seized a British oil tanker in the Persian Gulf, a jump in oil prices lies ahead.

The British motoring association AA Plc has warned that the uncertainty of British oil tankers returning from the Strait of Hormuz will spark an increase in the price of oil this summer.

Iran seized the British ship Stena Impero in retaliation of their ship being seized by Britain. Iran have implicated attacks on six other ships in the Strait of Hormuz, ensuing buildup of UK and US naval forces in the area. People are fearing Iran might block the strait as a whole which would cut off a fifth of the world’s oil and a quarter of its natural gas.

David Balston, head of the UK Chamber of Shipping stated if Iran closes the Strait of Hormuz, “It would significantly push up petrol and gas prices in the UK,” he adds, “Because 5% of the country’s oil and 13% of its natural gas passes through the Strait of Hormuz.”

John Hall, chairman of Alpha Energy Group, stated that the global oil market is not too volatile of oil prices now. 

According to Hall, the market has grown tired of “threats and bluster” from President Donald Trump’s threats against Iran which do not lead to anything. Hall also stated that financial markets are also growing immune to Trump’s tweets, and the markets do not change after his tweets.

Hall stated that Iran is not likely to shut off the Strait of Hormuz but if they do Britain would sell a barrel of oil for $100.

“If it was really serious I think you could expect petrol to go up 20p a liter, that’s a conservative estimate,” Hall stated. “At the moment there is a serious diplomatic game running between Iran, the US and the UK with Iran deliberately being provocative.”


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