Global crude prices rose on Thursday after US National Security Advisor Michael Flynn said Washington is putting Tehran “on notice” in response to an Iranian missile test.
The senior administration official refused to rule out any options for a US response, including military intervention.
With the lifting of international sanctions over its nuclear program, Iran has been rapidly boosting oil exports in recent months exacerbating global overproduction.
Any response from Washington could cut Iranian crude supplies, sending oil prices higher.
Major crude benchmarks gained over a dollar, with Brent blend trading at $57.18 per barrel, showing the best performance since January 6. US benchmark West Texas Intermediate was seen at $54.13 per barrel, which is also the highest price since the first week of the year.
“As soon as those comments hit the wires, you saw a bit of a rally in crude oil,” John Kilduff, founding partner at energy hedge fund Again Capital told CNBC.
The White House has condemned Iran’s recent ballistic missile test, describing it as provocative and destabilizing the situation across the Middle East. Flynn also criticized Iran’s support of Houthi rebels in Yemen’s civil war.
Iran has been formally PUT ON NOTICE for firing a ballistic missile.Should have been thankful for the terrible deal the U.S. made with them!
— Donald J. Trump (@realDonaldTrump) February 2, 2017
Iran was on its last legs and ready to collapse until the U.S. came along and gave it a life-line in the form of the Iran Deal: $150 billion
— Donald J. Trump (@realDonaldTrump) February 2, 2017
“Iran is now feeling emboldened…The Obama Administration failed to respond adequately to Tehran’s malign actions—including weapons transfers, support for terrorism, and other violations of international norms,” said Flynn.
As Iran is seeking to produce and export more oil and was even exempt from the OPEC deal to cut production by 1.2 million barrels per day (bpd) starting from January, the deterioration of relations with the US can hit its energy ambitions.
“We do not believe that the reimposition of sanctions would lead to an abrupt cut in Iranian exports, but the threat of new US sanctions will likely slow the pace of investment needed for Iran’s oil sector to mitigate the decline from existing oil fields,” Barclays said in a note in January.
It’s a good thing I just “filled up”. I was 32 years old in the fall of 1973 when the “gas crisis” was in full swing and lived through the less painful one in 1979. The secret: small cars with small engines. Give up the ego stroking 5.6 liter SUV or Pick-Up V8’s.
“The secret: small cars with small engines. Give up the ego stroking 5.6 liter SUV or Pick-Up V8’s.”
Are you a tree hugger too? No, the secret is get rid of the internationalists that continue to rape and pillage the lands for resource wealth. There is a glut of oil on the market, yet we continue to pay outrageous prices at the pump, and this is just another stunt to extract your wealth at the pump to put more money in these criminals pockets. It’s all a scam and you fell for it for personal reasons of which are to save money in your pocket, which is understandable, but how about hacking the problem at the root?
Iran retaliated. They’re dumping the dollar.
That’s gonna REALLY piss the stinking jews off, I’m guessin’.