Tags: Iran | Oil | Ban | EU | europe

Iran Oil Ban by EU May Send Brent Crude to $125, SocGen Says

Wednesday, 04 Jan 2012 01:28 PM

 

Brent crude futures, trading near $113 a barrel today, may rally to $125 should the European Union ban imports of Iranian oil, according to Societe Generale SA.

Such a move would require about 600,000 barrels a day of replacement supply from Saudi Arabia, depleting the country’s spare capacity, said Mike Wittner, the bank’s head of oil market research for the Americas. Iran would struggle to find alternative buyers for the banned crude, he said.

European Union governments moved closer to halting oil purchases from Iran, stepping up the confrontation over the Islamic republic’s nuclear program. EU foreign ministers plan to announce harsher sanctions on Iran’s energy and banking industries at their next meeting on Jan. 30 after Greece lifted its objections to an oil embargo.

“The EU imports 600,000 barrels a day from Iran, that will go to zero sooner or later,” Wittner said today in a phone interview from New York. “Does Saudi have the ability to replace it? Yes. But then the market may become concerned about how much spare capacity Saudi Arabia has remaining.”

While Iran will probably divert some of the unsold crude to Asia, the country would be unlikely to sell all of it there, Wittner said. Refiners would find it difficult to cut their intake of Saudi Arabian crude in order to take extra Iranian cargoes, because of contractual terms with the kingdom, he said.

“China could take a little bit more,” Wittner said. “If Iran has 600,000 barrels a day looking for a home, I don’t think it would be easy to sell it elsewhere.”


© Copyright 2015 Bloomberg News. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Wash Times: Senate GOP Requests Obama's Emails in IRS Inquiry

Friday, 30 Jan 2015 08:48 AM

A group of Senate Republicans have called on President Barack Obama to turn over all communications that he and his aide . . .

Obama to Democrats: Time to Fight for Middle Class, Party Message

Friday, 30 Jan 2015 07:42 AM

At the annual Democratic retreat in Philadelphia this year, President Barack Obama urged lawmakers to keep up the fight  . . .

Romney to Update Supporters on Potential 2016 Run

Friday, 30 Jan 2015 07:18 AM

Republican Mitt Romney is to give an update to his supporters on Friday on whether he should run for president a third t . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved