Oil focused on Iran threats and actions

Maybe They Can

Well, maybe they can, and then again maybe not. Can Iran shut down the Strait of Hormuz? Over the weekend some comments from General Martin Dempsey, the chairman of the Joint Chiefs of Staff, said Iran has invested in some capability to close the waterway, but at the same time, the US has invested in some capabilities as well. In others words "Go ahead, make my Day." U.S. Defense Secretary Leon Panetta said the U.S. would take action to re-open the strait if Iran made good on its threats to block the straits and the situation continues to be a backdrop to oil trading. Whether Iran can or can't is really immaterial because if they attempt to do so, the world will come down on them like a ton of bricks.

Reuters reports that Iran's Supreme Leader Ayatollah Ali Khamenei said that Iran would not yield to the pressure of sanctions imposed by the West to get the Islamic republic to change its nuclear course. "The Iranian nation believes in their rulers ... Sanctions imposed on Iran by our enemies will not have any impact on our nation," he said in a speech broadcast by state television.

Iranian President Mahmoud Ahmadinejad began a four-nation Latin American tour Sunday with expected visits to Nicaragua, Cuba, Ecuador and Venezuela, aiming to show off relationships with allies as tensions grow over Iran's nuclear program. On the same day Iran's state radio reported that an American man convicted of working for the CIA has been sentenced to death.

The American is a 28-year-old former military translator, born in Arizona and graduate from high school in Michigan. His family is of Iranian origin. His father, a professor at a community college in Flint, Mich., said his son is not a CIA spy and was visiting his grandmothers in Iran when he was arrested.

The Iranian leader was scheduled to meet Monday with his long-time ally President Hugo Chavez, who was on a trip to Eastern Venezuela on Sunday. The visit comes on the same day an Iranian state radio reports that a former U.S. Marine, Amir Mirzaei Hekmati, was sentenced to death for spying for the U.S. The report says Hekmati received special training and served at U.S. military bases in Iraq and Afghanistan before heading to Iran for his alleged intelligence mission. The radio report did not say when the verdict was issued. Under Iranian law he has 20 days to appeal.

His trial took place as the U.S. announced new, tougher sanctions against Iran over its nuclear program, which Washington believes Tehran is using to develop a possible atomic weapons capability.

Iran, which says it only seeks nuclear reactors for energy and research, has sharply increased its threats and military posturing against stronger pressures, including the U.S. sanctions targeting Iran's central bank in attempts to complicate its ability to sell oil. The U.S. State Department has demanded Hekmati's release. Hekmati's father, Ali, said in a December interview with The Associated Press, that his son was a former Arabic translator in the U.S. Marines who entered Iran about four months earlier to visit his grandmothers. Meanwhile, several hours before Ahmadinejad's arrival on Sunday, Chávez rebuffed calls by U.S. officials for countries to insist that Iran stop defying international efforts to assess its nuclear program.

Also, in Nigeria a nationwide strike against the removal of a government fuel subsidy could get oil moving. The government can give but as we have found, it will have a much harder time taking away. More turmoil for oil.

Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at pflynn@pfgbest.com.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

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