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Oil price falls as Saudis trump Iran threat

(Shanghai Daily)

10:49, December 29, 2011

OIL prices fell yesterday, after Saudi Arabia said it will offset any loss of oil from a threatened Iranian blockade of a crucial tanker route in the Middle East.

The US Navy warned that any disruption of traffic through the vital Strait of Hormuz "will not be tolerated."

In New York, benchmark crude fell US$1.98, or about 2 percent, to finish at US$99.36 a barrel.

Brent crude fell US$1.71 to end at US$107.56 a barrel in London.

On Tuesday Iran's vice president said that his country was ready to close the Strait of Hormuz - a vital waterway through which a third of the world's tanker traffic flows - if western nations embargo the country's oil because of Iran's ongoing nuclear program. The head of the country's navy added yesterday that his fleet can block the strait if need be. His comments came as Iran held a 10-day drill in international waters near the strategic route, which is 21 miles wide at its narrowest point.

A Saudi oil ministry official told The Associated Press that Saudi Arabia and other Gulf producers are ready to provide more oil if Iran tries to block the strait. The official spoke on condition of anonymity because he was not authorized to discuss the issue. He didn't specify other routes that could be used to transport oil, although they would likely be longer and more expensive for getting crude to the region's customers.

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  1. Name

Hammad Sethi at 2011-12-2992.40.254.*
If Iran decides to block the Strait of Hormuz then Saudi Arabia should not increase its oil production. Instead Saudi Arabia should start charging double amount for its oil. This will bring cash for Saudi Arabia, and also limit the ability of Western Christians to commit an act of aggression against a Muslim brother. Saudi Royal family should not stab the Muslim Ummah in the back.
Hammad Sethi at 2011-12-2992.40.254.*
If Iran blocks the Strait of Hormuz then Saudi Arab should charge twice the price for its oil and make twice the profit. Saudi Royal family should refrain from increasing the oil output and stabbing the Muslim Ummah in the back.

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