|January 23, 2012|
Oil prices set to climb after EU reportedly agrees Iranian export ban
|Oil prices look set to rise after EU ambassadors reportedly agreed to an embargo on Iranian oil exports beginning 1 July.|
Today's widely trailed move comprises the final step before foreign ministers can officially sanction the ban at a meeting in Brussels later this afternoon.
"[EU ambassadors] have agreed on Iran sanctions," an anonymous senior EU diplomat told news agency Reuters.
It looks likely that countries will not be able to sign new deals with Iran after the cut-off date, but will be able to fulfil existing contracts.
Analysts expect the embargo to result in yet more price rises, after crude oil reached an eight-month high earlier this month on the back of encouraging economic figures from the US and escalating tensions between Iran and the EU and US.
Iran has responded to tightening sanctions by threatening to close the strategically important Strait of Hormuz, which sees an estimated 17 per cent of the world's oil supply and 25 per cent of its liquid natural gas supply pass through it each day.
Société Générale SA has warned that the EU's sanctions could send Brent crude up to $125 a barrel, while other commentators estimate that closing the Strait may push prices up by about 50 per cent.
Any sustained increase in oil prices is expected to strengthen demand for green and energy efficient technologies, including electric and hybrid vehicles.