Iran’s first move on oil ban would backfire 26 Jan 2012 Oil prices may shoot up if Tehran abruptly cuts off the EU ahead of a full embargo. This would likely trigger a release of emergency stocks, and increased production from Saudi Arabia. But Iran won’t win much from higher prices, and would be the first to lose from a glut.
Indian economy could gain from Iran sanctions 24 Jan 2012 Beggars can’t be choosers. Iran would prefer to sell its oil for dollars, but sanctions mean it might have to take rupees from India, its second largest customer. Rupees are hard to spend outside of India, so New Delhi would get cheap oil and a captive buyer of its exports.
Gulf states will benefit from Iran sanctions 16 Jan 2012 Tehran has warned of dire consequences if regional producers replace its shut out oil. But Saudi Arabia and its allies have strong incentives to fill any sanctions-supply gap. They need to keep the United States on their side, and they have much to gain if Iran is weakened.
China will fudge Iran oil sanctions 12 Jan 2012 Simple disobedience of the U.S. freeze would give China cheap oil, but it can’t afford the cost of angering Uncle Sam. Total obedience would push up prices, and could spark social unrest in China. But Beijing can probably find a middle way: do just enough to placate the Americans.
Iran sanctions shouldn’t shift oil price 10 Jan 2012 The latest sanctions are not enough to justify an oil price spike. Sure, the lack of foreign equipment may bring Iran’s oil production down, but not in a hurry. Globally, crude supplies will remain fairly steady. A serious military escalation in the Gulf would change that.
Tighter sanctions push Iran to unpleasant choices 9 Jan 2012 The Islamic Republic can probably cope with a decline in oil revenue and restrictions on its central bank. But tighter sanctions will worsen already high inflation and put extreme pressure on the rial. President Ahmadinejad risks political fallout, however he chooses to respond.
Iran sanctions’ impact could prove slippery 6 Jan 2012 Iran’s nuclear ambitions are a problem, but more sanctions may not be a solution, especially if China doesn’t cooperate. Iran will suffer, but may just become more determined. Without a realistic plan for unwinding sanctions if they fail, they will just distort oil markets.
Europe’s Iranian oil ban is affordable but risky 30 Nov 2011 Attacks on the UK’s Tehran embassy have added momentum to calls for an embargo. As the economic slowdown hits demand, cutting off Iranian supply won’t be too hard. But a ban could be in place for years. And it’s not clear Saudi Arabia would be willing to fill the gap in the long term.
Iran conflict would worsen bad economic situation 15 Nov 2011 After sanctions failed to end Tehran’s nuclear ambitions, a U.S. or Israeli-led attack on the Islamic Republic would come at a steep cost for the global economy. Sky high oil prices would delay any recovery, and threaten financial chaos across an unstable region.