International strains over Iran's nuclear ambitions were further exacerbated by the country staging three days of war games in the Hormuz area. Photo: REUTERS
Hormuz Oil Spike Could Spark Global Recession -- The Telegraph
Escalating tensions with Iran have pushed the cost of crude oil higher as fears mount that a 1970s-style jump in the oil price could send both Eastern and Western economies into recession.
Iran's threat to cut off access to the Strait of Hormuz – through which 40pc of the world's oil is shipped – has provoked an angry rebuke from the US, which has the Fifth Fleet nearby.
Today, French foreign minister Alain Juppe supported the American hard line with Tehran, and urged European leaders to impose an embargo on Iranian oil exports and freeze Iranian central bank assets by the end of this month. Currently, Italy imports 13.3pc of its oil from Iran, Spain 9.6pc, Greece 34.7pc and France 4.4pc.
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My Comment: For the moment there are no plans to counter an oil blockade at the Straits of Hormuz, but there is no question that any blockade or military confrontation will send oil prices sky-rocketing .... and staying at those price levels until the crisis is resolved.
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