Iran warns of a crude oil price hike after EU embargo

About a month from now, Iran will be sampling EU’s oil embargo, but the middle east country is dead certain that sanctions will rebound to the EU and other countries supporting it.

Aside from the EU, the U.S. is likewise implementing bans on Iran, particularly on its oil and financial industries.

During a CNN interview, Shamseddin Hosseini, the Iranian economic minister, confirmed that current crude oil prices will soar once the oil embargo is effected. He mentioned that oil prices could run sky-high, to as much as $160 a barrel. Moreover, Europe will go through periods of very low economic activity due to the drag exerted by elevated oil prices, Hosseini predicts.

Early this year, the International Monetary Fund had a similar forecast regarding oil prices. It announced that crude oil prices will jump by a hefty 30 percent as soon as Iran stops exporting crude to the embargo-participating nations of the West.

The U.S. and EU sanctions on Iran are supposed to pressure the middle east country to give up on its nuclear program. These western countries have doubts about Iran’s press releases that the program is not intended for weaponry or military pursuits. To this date, Iran has defended its nuclear program despite opposing beliefs.

The minister added that countries initiating the sanctions will soon find themselves in distress. Hosseini further said “We believe that those who impose the sanctions have exerted the maximum level of pressure they have been capable of.”

He went on to say that his country will survive the sanctions and, if its economy does suffer from it, he is almost certain that other countries will not be spared either.

Hosseini was asked about his views on where oil prices will be a month after the embargo, and he opined that if oil producers want to maintain continuous growth, crude oil price per barrel should be in the level of $100 per barrel.

But he was quick to add that prices could go up beyond the $100 mark as the super powers will not thrive economically at this price level.

He warned that oil markets should be prepared for an oil price hike if the EU, U.S., and allied countries fail to change its approach on the Iranian nuclear programs issue.