Iran threat to block oil route may cause speculators to raise gas prices

Iran threat to block oil route may cause speculators to raise gas prices

Tehrān : Iran | Dec 28, 2011 at 10:33 AM PST
Views: Pending
Clean Energy Economy Forum: Energy Security

As the US economy struggles to recover, a sharp spike in gas prices could lead to another economic slump. The prospect is real under a recent Iranian threat to block oil tankers from traveling through the Strait of Hormuz. However the real problem could be oil futures speculators.

It wouldn't be the first time Wall Street oil speculators defied the laws of supply and demand by driving up gas prices ahead of any actual change in availability.

According to a University of Massachusetts Amherst study cited by CBS News, "speculation in the oil futures market is having a big impact on prices at the pump."

Iran's threat to block the flow of one-sixth of the world's oil is in reaction to possible sanctions against the country.

"Western nations are growing increasingly impatient with Iran over its nuclear program. The U.S. and its allies have accused Iran of using its civilian nuclear program as a cover to develop nuclear weapons. Iran has denied the charges," according to USA Today.

Political instability in the Middle East has caused the price at the pump to fluctuate over the past several years. But the Public Interest Research group finds that speculators in the oil futures markets are the real culprits for rising gas prices.

"A decade ago, speculators controlled less than 30 percent of the oil futures market. Today, they control more than 70 percent."

Lawmakers claiming that more oil drilling will stablize American gas prices generally fail to inform the public that oil drilled in the US does not stay in the US.

No matter where oil is pumped, it is sold on the open market and oil futures traders set the prices.

1 of 4
Iran threat to block oil route could raise gas prices
Speculators in oil futures markets are the real culprits for rising gas prices.
itobin53 is based in Tampa, Florida, United States of America, and is an Anchor on Allvoices.
Report Credibility
  • Clear
  • Share:
  • Share
  • Clear
  • Clear
  • Clear
  • Clear

News Stories

  • Oil marketing cos fall on Iran threat

      The Economic Times
    Shares of state-run oil marketing companies fell after rising oil prices fuelled concerns of increase in under-recoveries, two dealers said. Brent crude oil prices are up 5 percent in less than two weeks, supported by Iran's threat to halt oil...
  • U.S. Will Not 'Tolerate' Disruption of Vital Oil Strait Traffic

      Voice of America
    Will Not 'Tolerate' Disruption of Vital Oil Strait Traffic VOA News Photo: Reuters Iran's top naval officer, Admiral Habibollah Sayyari gestures as he speaks during the Velayat-90 war game on the Sea of Oman near the Strait of Hormuz, in southern...
  • Crude oil floats above $100

      United Press International
    Crude oil prices held above $100 on the New York Mercantile Exchange as supply tensions rippled through the market. A high-ranking Iranian official said Tuesday that tougher sanctions imposed on the country, due to suspicions that it is developing a...
  • Oil price falls after US warns Iran over threat to close Gulf supply route

      Guardian Unlimited
    An Iranian submarine in the strait of Hormuz, an important oil supply route to the west. Oil prices fell on Wednesday after the US navy said Iran 's threat to block the strait of Hormuz, a key supply route for crude exports from the Gulf, would not...
  • Iran in threat to block oil route

    Iran says it may close a vital oil-trade route if the West imposes more sanctions over its controversial nuclear programme. Vice President Mohammad Reza Rahimi warned that "not a drop of oil will pass through the Strait of Hormuz" if sanctions are...
  • Iran First Vice President repeats threat to close Straits of Hormuz

      Mail Online UK
    Even one drop of oil cannot flow through the Strait of Hormuz': Iran First Vice President repeats threat to close oil shipping lane over nuclear arms row Four mile-wide strait is world's most important oil shipping lane Iranian First Vice President...





More From Allvoices

Report Your News Got a similar story?
Add it to the network!

Or add related content to this report

Use of this site is governed by our Terms of Use Agreement and Privacy Policy.

© Allvoices, Inc. 2008-2014. All rights reserved. Powered by PulsePoint.