Oil Moves Higher as US, Canada, UK Place Sanctions on Business with Iran, Unrest in Egypt Continues
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Crude oil is trading higher Tuesday following remarks by Treasury Secretary Tim Geithner and new financial sanctions being imposed against Iran by the U.S.
Late Monday, Geithner said the Obama administration is now acting under Section 311 of the USA PATRIOT Act in identifying the entire Iranian banking sector as a threat to financial institutions or governments that do business with Iranian banks. He continued, "if you are a financial institution and you engage in any transaction involving Iran’s Central Bank or any other Iranian bank operating inside or outside Iran, you are at risk of supporting Iran’s illicit activities: its pursuit of nuclear weapons, its support for terrorism, and its efforts to deceive responsible financial institutions and evade sanctions." The U.S. government strongly believes Iran’s central bank is currently involved in money laundering.
These new sanctions follow a report by the United Nations on November 8th, which said previous sanctions were not being followed by the Iranian government. The U.K and Canada followed suit with similar sanctions as the U.S.
Conversely, Russia has called the measures “unacceptable and against international law.” Russia later went on to say, “Such a practice seriously obstructs advancement toward a constructive dialogue with Tehran. Stronger sanction pressure, which some of our partners see almost as a goal in itself, will not encourage Iran to sit down at the negotiating table."
In the past, the U.S has weeded domestic companies out of the Iran and are now looking to its allies to do the same; Japan, China, India and South Korea are the major buyers of Iranian oil. In 2010, Japan purchased 10.1 percent of Iran’s total oil production while South Korea purchased 6.3 percent.
Iran responded to the new sanctions and UN allegations by informing its people the government would find new ways of doing business and the nuclear experimenting was for medical research and finding an alternate source of energy. Oil is Iran’s main source of income currently, driving in $80 billion annually.
Also affecting crude oil Tuesday is renewed sociopolitical issues within Egypt.
Tens of thousands of protesters are gathered in Cairo's Tahrir Square to show disapproval for the late transfer of power from the ruling military. Military forces have now agreed to push forward the transfer to next summer, however unrest continues.
NYMEX crude oil last traded at $97.95 per barrel, up just over a percent Tuesday. The US Oil Fund ETF (NYSE: USO) is up 0.7 percent at last check.
Late Monday, Geithner said the Obama administration is now acting under Section 311 of the USA PATRIOT Act in identifying the entire Iranian banking sector as a threat to financial institutions or governments that do business with Iranian banks. He continued, "if you are a financial institution and you engage in any transaction involving Iran’s Central Bank or any other Iranian bank operating inside or outside Iran, you are at risk of supporting Iran’s illicit activities: its pursuit of nuclear weapons, its support for terrorism, and its efforts to deceive responsible financial institutions and evade sanctions." The U.S. government strongly believes Iran’s central bank is currently involved in money laundering.
These new sanctions follow a report by the United Nations on November 8th, which said previous sanctions were not being followed by the Iranian government. The U.K and Canada followed suit with similar sanctions as the U.S.
Conversely, Russia has called the measures “unacceptable and against international law.” Russia later went on to say, “Such a practice seriously obstructs advancement toward a constructive dialogue with Tehran. Stronger sanction pressure, which some of our partners see almost as a goal in itself, will not encourage Iran to sit down at the negotiating table."
In the past, the U.S has weeded domestic companies out of the Iran and are now looking to its allies to do the same; Japan, China, India and South Korea are the major buyers of Iranian oil. In 2010, Japan purchased 10.1 percent of Iran’s total oil production while South Korea purchased 6.3 percent.
Iran responded to the new sanctions and UN allegations by informing its people the government would find new ways of doing business and the nuclear experimenting was for medical research and finding an alternate source of energy. Oil is Iran’s main source of income currently, driving in $80 billion annually.
Also affecting crude oil Tuesday is renewed sociopolitical issues within Egypt.
Tens of thousands of protesters are gathered in Cairo's Tahrir Square to show disapproval for the late transfer of power from the ruling military. Military forces have now agreed to push forward the transfer to next summer, however unrest continues.
NYMEX crude oil last traded at $97.95 per barrel, up just over a percent Tuesday. The US Oil Fund ETF (NYSE: USO) is up 0.7 percent at last check.
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