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Oil price falls as Saudis trump Iran threat
Oil prices fell on Wednesday, after Saudi Arabia said it will offset any loss of oil from a threatened Iranian blockade of a crucial tanker route in the Middle East.In New York, benchmark crude fell $1.98, or about 2 percent, to finish at $99.36 a barrel. Brent crude fell $1.71 to end at $107.56 a barrel in London. On Tuesday Iran's vice president said that his country was ready to close the Strait of Hormuz -- a vital waterway through which a third of the world's tanker traffic flows -- if western nations embargo the country's oil because of Iran's ongoing nuclear program. The head of the country's navy added on Wednesday that his fleet can block the strait if need be. His comments came as Iran held a 10-day drill in international waters near the strategic route, which is 21 miles wide at its narrowest point. A Saudi oil ministry official told The Associated Press that Saudi Arabia and other Gulf producers are ready to provide more oil if Iran tries to block the strait. The official spoke on condition of anonymity because he was not authorized to discuss the issue. He didn't specify other routes that could be used to transport oil, although they would likely be longer and more expensive for getting crude to the region's customers. Posted by: tipper 2011-12-29 |
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