Iran pushes for war with U.S, oil prices highest in 7 months
Iran tension pushed gold again above $1,600
Gold prices rose more than 2 percent to be back above $1,600/ounce while oil prices jumped nearly 4 percent to $102/barrel after Iran’s threat of war against the US Navy in Persian Gulf. As Iran is a far more powerful and bigger nation than Libya, Iraq and Afghanistan combined; the world fears a major war coming in 2012.
Tehran — Iran has threatened on Tuesday to strike the U.S. Navy aircraft carrier in the Persian Gulf, Tehran’s most aggressive statement yet after weeks of saber rattling as the new U.S. and EU financial sanctions begin take a toll on its economy.
Oil prices hit highest since May 2011
The Iranian currency Rial have collapsed and lost 60% of its value in 3 months, driving instability in Iranian society and wreaking havoc on its commerce. Long queues have formed across Iran at banks and some currency exchange offices shut their doors as Iranians scrambled to buy US dollars to protect their savings from the currency’s fall.
France, Britain and Germany have proposed and pushed for embargo to punish Iran’s lack of cooperation on its nuclear program before the end of January. Analysts said should the Europeans succeed in getting through the legislation; Iran’s currency may experience total collapse.
Iranians queue to buy U.S. dollar as currency collapses
Iran’s Army chief Ataollah Salehi said the United States had moved an aircraft carrier out of the Gulf because of Iran’s naval exercises, and Iran would take action if the ship returned. “We advise and insist that this warship not return to its former base in the Persian Gulf,” the armed forces chief said.
“We don’t have the intention of repeating our warning, and we warn only once,” he was quoted as saying by the armed forces’ official website.
The US carrier would face the “full force” of the Iranian navy if it returns, a navy spokesman, Commodore Mahmoud Mousavi, told Iran’s Arabic television service Al-Alam.
In Washington, the Pentagon says U.S. warships will continue to sail in the Persian Gulf despite an Iranian warning to stay away. The aircraft carrier is now on its way heading back to its Persian Gulf base.
Iran threatened to close the Strait of Hormuz
The ominous message came just after Iran completed 10 days of naval manoeuvres at the entrance to the Gulf to show it could close the strategic oil-shipping channel in the Strait of Hormuz if it felt threatened. 20 percent of the world’s traded oil flows through that narrow strait.
Physically closing the strait is not really a mean that is not available to Iran, said Professor Jean-Paul Rodrigue of Hofstra University. “At best, Iran can posture and potentially disrupt traffic for a short duration,” said Rodrigue, who specializes in global trade and maritime transportation issues.
The Iranian Navy is simply no match for the American fifth Fleet based in Bahrain. In close combat, it is estimated that the U.S. warships can annihilate Iran’s fleet within 5 days. Experts say the U.S. Navy is overwhelmingly more powerful than Iran’s sea forces, but Iran is running out of diplomatic wiggle room to avert a confrontation, and may attempt a suicidal move amid destabilizing economy.
U.S. warship heading back to its Bahraini base in Persian Gulf, Iran threatened ‘full force’ against it if it returns.
The American aircraft carrier in question is the USS John C. Stennis, one of the US navy’s biggest warships. The massive, nuclear-powered vessel transports up to 90 fighter jets and helicopters and is usually escorted by around five destroyers.
Tehran’s latest threat comes at a time the country has been pushed to the wall, the West has imposed the increasingly tight sanctions over Iran’s nuclear program, and with the new sanctions are the first that could have a serious effect on Iran’s oil trade, 60 percent of its economy.
Sanctions signed into law by U.S. President Barack Obama on New Year’s Eve would cut off financial institutions that work with Iran’s central bank from the U.S. financial system, blocking the main path for payments for Iranian oil, devastating 60 percent of its economy, which are dependent on oil.
The EU is expected to impose new sanctions by the end of this month, possibly including a ban on oil imports and a freeze of Iranian central bank assets.
EU drafting sanctions to be enacted at end the of January, if passed the Iranian currency may collapse totally.
Even Iran’s top trading partner China – which has refused to back new global sanctions against Iran – is demanding discounts to buy Iranian oil as Tehran’s options narrow. Beijing has start cutting its imports of Iranian crude by more than half for January, paying premiums for oil from Russia and Vietnam to replace it.
The potential for an Iran-U.S. conflict sent a shiver through oil and markets Tuesday, pushing oil prices up around $2 a barrel and gold $33 an ounce. Analysts and market traders are watching the developing situation in and around the Strait of Hormuz carefully, fearing that a spark could ignite open confrontation between the long-time foes.
Iran and American military bases around it, 10 years of preparation and the U.S. is now done getting Iran surrounded.
Posted by admin
on January 4, 2012. Filed under Financial News.
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