by Staff Writers
New York (AFP) Feb 15, 2012
World oil prices spiked on Wednesday after Iran warned that it may suspend crude exports to six European Union countries amid escalating tensions over Tehran's nuclear program.
New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in March, climbed $1.06 to close at $101.80 a barrel.
In London, Brent North Sea crude for April delivery settled at $118.93 a barrel, up $1.58 from Tuesday's closing level.
The market was mainly fixated on concerns about Iran, Tom Bentz at BNP Paribas said.
"This morning, we had this news about Iran cutting exports to (six) European countries. It seems to be the primary driver of the market," he said.
Iran said Wednesday that it was considering cutting oil sales to six EU countries but would not do so "at the moment," while unperturbed European officials said they were looking for other suppliers anyway.
State broadcaster IRIB reported on its website that the ambassadors of France, Greece, Italy, the Netherlands, Portugal and Spain were called to the foreign ministry in Tehran and warned that "Iran will revise its oil sale to these countries."
The warning was in retaliation of a European Union ban on Iranian oil imports that is being phased in as existing contracts expire up to July 1. The EU, the United States and their allies suspect Tehran is developing nuclear weapons; Tehran insists its program is purely for peaceful purposes.
The European Commission said that, even if Iran did cut its sales to the European Union, it would make little difference as EU buyers were already switching suppliers.
Prices also won some support after the US Department of Energy reported American crude stockpiles sank by 200,000 barrels in the week ending February 10, indicating strengthening demand in the world's biggest crude consumer.
Market expectations had been for a surge of 1.3 million barrels, according to analysts polled by Dow Jones Newswires.
China defends 'economic interests' with Iran
Vice Foreign Minister Cui Tiankai, accompanying China's Vice President Xi Jinping on a weeklong visit to the United States, said the two sides had discussed "hot spot" issues like Iran's controversial nuclear program.
"We call for efforts to maintain the effectiveness of the international non-proliferation regime and to maintain peace and stability in the region," he told reporters at a briefing in Washington late Tuesday.
"As for relevant Security Council resolutions on sanctions, we voted for these resolutions and we have been enforcing them most strictly. But we do have reservations on unilateral sanctions and this is nothing new."
He added that "with regard to Iran... the legitimate economic interests and energy demands of China should not be affected."
The United States and the European Union have ratcheted up economic sanctions on Iran to an unprecedented level to try to force it to halt its uranium enrichment program and re-engage in long-stalled talks.
The latest measures go beyond four rounds of UN sanctions placed on Iran in recent years, and come as a stream of media reports have suggested Israel may carry out a military strike on Iranian nuclear facilities later this year.
The United States and Israel have accused Iran of secretly pursuing atomic weapons, charges denied by Tehran, which insists its nuclear enrichment program is for purely peaceful purposes.
Beijing's economic ties with Iran, a major oil exporter, have expanded in recent years, partly thanks to the withdrawal of Western companies in line with the sanctions.
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Tens of billions at stake in BP oil spill trial
Chicago (AFP) Feb 15, 2012
Tens of billions of dollars will be at stake when BP heads to a US court this month to determine how much it owes for the massive Gulf of Mexico oil spill and how much it can shift to subcontractors. Several government probes have castigated BP, rig operator Transocean and Halliburton - which was responsible for the runaway well's faulty cement job - for cutting corners and missing warnin ... read more
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