Oil prices could hit $150 a barrel as a result of the ongoing international standoff over Iran’s nuclear programme, the head of the country’s state oil company said yesterday.
Ahmad Qalehbani, chief of the National Iranian Oil Company, made the remarks as Tehran ponders cutting off exports to Europe, before a proposed EU embargo on Iranian crude is due to come into effect. The embargo is set to go into effect in the summer, but Iran says it may cut the flow of crude to Europe early. “It seems we will witness prices from $120 to $150 in the future,” Qalehbani was quoted as saying by Iran’s official news agency.
Any such price hike would likely play havoc with the global economy, forcing many countries back into recession. Qalehbani’s statement came as Iranian oil officials prepare to debate a ban on crude sales to European Union countries.
Many Iranian lawmakers have called for an immediate ban on oil exports to the EU before its ban goes into effect in July - in a bid to hurt Europe before it can find alternative suppliers. Meanwhile, one of the UAE’s most senior oil executives - Crescent Petroleum president Badr Jafar - has called for the world to lessen its dependency on the Strait of Hormuz.
About 17 million barrels of oil pass through the narrow waterway at the mouth of the Gulf each day - and Iran has threatened to block the vital artery in the event of a conflict with the US and its allies. “While the Gulf region is blessed with 47 percent of the world’s proved oil and gas resources, it only has one seaborne route for them to reach the international market,” Jafar said in a statement that was released yesterday. He called for the region to explore “new export routes” and said the use of a new pipeline between Abu Dhabi and Fujairah - which will be ready this year - could be one of a number of ways of reducing the quantity of oil that could be disrupted by any blockage of the Strait.