US Approves Further Sanction agst Iran I am writing this as IMO this will build a bigger risk premium in Brent pricing and positively impact IAE sp.
Today, 31 Dec President Obama signed the previous congressional legislation into law that included sanctions against all dealings with the Iran Central Bank including foreign companies. Parts of the law come into effect in 60 days, others parts within 6 months. The penalties agst foreign firms that deal with the Iran Central Bank meant to prevent and target Iran oil will come into effect in 6 months and according to US officials is being phased in to allow the oil market to price in the impact on oil prices. That is, for the oil market to price in higher oil prices as a result of expected negative impact on Iran oil production and dealings.
The EU is working on their own sanctions agst Iran. It is reported that the EU foreign ministers meeting upcoming 30 Jan 2012 will confirm the EU decision of sanctions agst Iran, similar to the US, meant to pressure Iran and would impact their oil industry.
Iran exports approx 3 M bopd, and loss or impact limiting this, will drive oil prices significantly higher. Different commentary have mentioned significantly higher prices, $150 per barrel and higher ranges.
Google for yourself: Iran US Sanctions (you can read all of the above), also Google: EU Iran Sanctions (for the latest)