Oil Prices React to Iranian Situation; Special Report by Leading Financial Web Site Penny Stock Detectives
In a recent Penny Stock Detectives article, editor Danny Esposito points out that the world was hoping that talks with Iran would go smoothly a few weeks ago, but they broke down.
(prHWY.com) July 20, 2012 - New York, NY -- In a recent Penny Stock Detectives article, editor Danny Esposito points out that the world was hoping that talks with Iran would go smoothly a few weeks ago, but they broke down. Esposito notes that after they broke down, Iran stated it had tested missiles capable of hitting Israel, which sent oil prices higher.
"During the meeting, the U.S., Europe, and Israel asked Iran to stop its nuclear energy enrichment program and to ship some of its uranium out of the country," reports Esposito. "Iran would only accept these terms if the U.S. halted its sanctions. Obviously, no one blinked, and the nuclear energy program continues in Iran, while the U.S. imposes further sanctions."
Talks are still ongoing about Iran's nuclear energy program, but thus far, no progress has been made, which has continued to push oil prices higher, comments Esposito.
In response to the increased sanctions, Iran defiantly stated it was considering blocking the Strait of Hormuz to block oil shipments from other Middle Eastern countries from reaching their destinations, Esposito reports. The U.S. military immediately dispatched forces to the Strait of Hormuz and increased the number of fighter jets, should the tensions further escalate, he says.
"More navy ships have entered the area to prevent Iran from blocking the Strait of Hormuz, should Iran attempt such an action. In the meantime, Iran has said that it will equip its warships with short-range missiles in response to the increase in the number of navy ships in the area," notes Esposito. "Oil prices have taken notice."
Israel, of course, is unhappy with Iran's threat about missiles able to reach its country, states Esposito.
"Israel's stance is what it has always been: if Iran does not back down from its nuclear energy ambitions, it will strike at Iran to ensure its nuclear energy ambitions are halted," Esposito argues.
According to the Penny Stock Detectives editor, the European Union, as of July 1, has banned oil imports from Iran in response to Iran's refusal to back down. Meanwhile, China and India are finding ways to buy oil from Iran using other methods besides paying in U.S. dollars.
With the new sanctions, however, more and more countries have publicly stated that they will no longer buy any oil from Iran; this has moved oil prices higher, observes Esposito.
From just a few months ago, this crisis has reached another critical level, he says. Certainly those in Iran are feeling the pinch of the sanctions, and now that the U.S. has upped the pressure, Esposito asks, will the leadership in Iran become more desperate and finally make a move because its back is against the wall?
"It is difficult to trade on political outcomes, but certainly for the near term, expect higher oil prices as the talks continue to break down, which means someone will eventually blink first, resulting in even higher oil prices," believes Esposito. "Despite weak economic growth, oil prices will rise if war breaks out with Iran."
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