- Consequences should be fully considered before taking any action!
Iranian forces have shot down an American unmanned drone in the east of the country, according to Iran’s state news agency. The aircraft used for spying was reportedly downed with minimum damage and seized by Iranian authorities.
Rising tension between Iran and the Western world pushed up crude oil prices on Friday, with ICE Brent January crude up 95 cents to settle at $109.94 a barrel.
Today, Iran warned that any move to block its oil exports would more than double crude prices with devastating consequences on a fragile global economy.
The United Nations nuclear watchdog issued a report in November stating there is an evidence that Tehran had worked on designing an atom bomb. Washington and EU countries immediately began discussing measures to restrict oil exports. Iran maintains its nuclear program is entirely peaceful.
Furthermore, Iran strives to contain international reaction to the storming of the British embassy last week. The action drew immediate condemnation from around the world and may trigger support for even tougher action against Tehran.
On Thursday, the U.S. Senate voted to penalize foreign financial institutions that do business with Iran’s central bank, which receives payment for the 2.6 million barrels crude oil Iran exports daily. The European Union is considering a ban on Iranian oil imports, which is already in place in the United States.
So far neither the U.S., nor the EU has finalized its action plan against the oil trade or the central bank amid concerns about the impact impact on the global economy. Currently, Iran is the world’s fifth biggest crude exporter.
However, the British embassy attack last week caused relations with Europe to deteriorate further and Iran is now facing possibility of a direct hit on its main source of export earnings.
London evacuated staff from Tehran last Friday and closed the Britain’s embassy. The biggest EU states withdrew their ambassadors in protests.
