Investment bank Merrill Lynch predicts a $40 rise in oil prices if the country’s 2.2 million barrels day of crude are shut off completely.
The Russia Today reported on Thursday that Iran’s move will be a good response to EU sanctions which have been already slammed by Iran’s close allies like China.
The report quoted Nasser Soudani, a member of Iran Majlis (parliament) Energy Committee, as saying that in reaction to EU measure, Iranian lawmakers are drafting a new law, which would stop oil supply to European countries as soon as possible.
“A number of representatives of the Majlis and I are seeking to approve a bill according to which all European countries that made Iran the target of their sanctions will not be able to buy even one drop of oil from Iran, and oil taps will be turned off to them so that they will not play with fire again,” the lawmaker added.
The report stated that the legislation may be ratified in Iran’s Majlis as early as this Sunday, adding that such a ban would result in a fuel shortage in Europe as the countries which joined the sanctions, while receiving a considerable amount of crude from Iran, would not have enough time to secure a substitute.
In their latest meeting in Brussels on January 23, EU foreign ministers imposed new sanctions on Iran which include a ban on purchasing oil from the country, a freeze on the assets of Iran’s Central Bank within the EU, and a ban on the sale of diamonds, gold and other precious metals to Iran.
EU foreign policy chief, Catherine Ashton, claimed that the new sanctions aim to bring Iran back to negotiations with P5+1 — US, UK, France, Russia, China and Germany — over the country’s peaceful nuclear program.
The United States, Israel and some of their allies accuse Tehran of pursuing military objectives in its nuclear program. Iran has strongly rejected the allegation.
January 27, 2012