Iran says ME tensions will propel oil price to $120

October 28, 2007 - 0:0

TEHRAN (PIN) – Vice chairman of the Energy Committee of Majlis (Iran’s parliament) predicted that oil price would rise to 120 dollars if tensions in the Middle East continued.

Nasser Sudani told PIN in case tensions between regional countries like Iraq and Turkey mounted and led to the outbreak of a war, oil price would reach 120 dollars.
He also blamed U.S. threats against Iran for the increase in oil price, warning that sanctions against Iran and military threats against Syria and Lebanon would cause a new crisis in the Middle East and consequently in the world.
The lawmaker referred to the unprecedented economic crisis in the United States and added the U.S. and some Western countries had attempted to stockpile oil in a bid to lift oil output, leading to an increase in demand for the commodity and in its price.
“In the meantime, oil price jumps as cold season approaches,” said the MP.
Sudani added the protest of workers in the oil sector of Nigeria, an oil exporting state, and hurricanes in the Gulf of Mexico were among other reasons behind the hike.
The benchmark crude oil futures price rose above $92 a barrel for the first time ever in New York early Friday morning as the Middle East situation was expected to deteriorate.
The December contract for West Texas Intermediate crude hit a new high of $92.22 a barrel during off-hours trading, after ending regular trading on the New York Mercantile Exchange at $90.46 Thursday, up $3.36 from the previous day.
At 9:20 a.m., the key contract gained $1.10 from the previous day to $91.56 a barrel.
Concern grew about a crude supply shortage after Washington’s announcement of new sanctions on Iran, which may heighten tension in the Middle East. Other factors behind the crude price hike include the U.S. Energy Department’s Wednesday announcement of a crude inventory decline before the oil demand season and speculation about the absence of additional oil production.