Monday, November 7, 2011

Fear of Nuclear Iran already having economic consequences on oil prices

As Iran steps onto the precipice of being a nuclear power, the threat of retaliation by Israel, the US, or even NATO is causing the European oil markets to rise, and Brent to begin skyrocketing upwards.

Oil support, sanctions and attacks: Oil should get more support and take the Brent-WTI spread back toward $20 given the broken nature of that market. The first move may be to sanction the Central Bank of Iran, cutting oil exports and dividend repatriation (negative for MTN and the like). Russia and China will push back on this toward the end of the month, increasing the probability of an attack on Iranian nuclear facilities late November/December, which we upgraded to 40% a month ago. - IAEA

By the world leaders waiting and waiting for Iran to break resolution and resolution, it appears the world's energy markets are now paying the price for failed leadership, and the inevitable war that is soon to take place in the Middle East.


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