As Iraq calls for an oil embargo on the allies of Israel, prices reach a six-month high.
The price of Brent in London reached a six-month high on Tuesday, closing at 27.04 USD/barrel, a 40% rise over the price on January 1st.
The current political setting in the Middle East is to blame, with the rising tension between Israel and the Palestinians having real financial repercussions, as the USA threatens to attack Iraq and in retaliation, the regime in Baghdad responds with threats to take economic action.
Iraq’s appeals for an oil embargo were made to the Arab league, although it was decided that such a policy should only be followed if it were unanimous. Since Kuwait has already declared that any such measures to restrict sales would be damaging to its economy, it is unlikely that they will go ahead, since it would certainly not be in Iraq’s interest to unilaterally suspend oil exports.
However, the combined setting is enough to provoke short-term financial jitters in the markets.
John ASHTEAD PRAVDA.Ru LONDON UNITED KINGDOM