December 28, 2011
Oil prices fell on Wednesday after the US navy said Iran’s threat to block the strait of Hormuz, a key supply route for crude exports from the Gulf, would not be tolerated.
After Iran warned that it could respond to threatened sanctions from the US by closing the strait, a spokesman for the fifth fleet, the arm of the American navy based in Bahrain, issued a statement which said: “Anyone who threatens to disrupt freedom of navigation in an international strait is clearly outside the community of nations; any disruption will not be tolerated.”
The cost of a barrel of Brent crude fell by 82 cents a barrel to $108.45 in London trading, after rising for six successive days. In New York, US crude had fallen 87 cents to $100.47 by lunchtime.
Thorbjørn Bak Jensen, oil analyst with Global Risk Management, said: “The threat by Iran to close the strait of Hormuz supported the oil market yesterday, but the effect is fading today as it will probably be empty threats, as they cannot stop the flow for a longer period due to the amount of US hardware in the area.”
This article was posted: Wednesday, December 28, 2011 at 9:44 am