Commodity Daily News

Iranian Threats Fuel Crude Oil Price Increases

Spot crude oil prices have steadily climbed on the Iranian threat to close the Strait of Hormuz should western nations impose sanction the Iranian oil industry. Comments on Tuesday from Iran's first vice-president did little to reduce tensions when he said if the west imposes sanctions on the Iranian oil industry then Iran will close the Strait of Hormuz. A majority of Middle East oil passes through this waterway and the US Department of Energy considers the Strait of Hormuz as, “The world's most important oil chokepoint.” The Iranian threat to close the strait is not a new one but the renewal of the tough talk and a US led strike on Iranian nuclear facilities has helped to push crude oil prices higher by almost $10 since the mid-December low.

Spot crude oil has run into a resistance line from the November and December highs which come in at $101.60. A break here and the next resistance level is found at $105.50 from the mid-April low.