The global economy remains vulnerable to steep rise in crude oil prices, which would raise business costs and hammer consumers.
Things are warming up in the oil market.
News that Saudi Arabia, the world's biggest oil exporter, has booked 11 giant tankers to ferry crude to the United States is a clear sign that the big players in the market fear there could be trouble ahead.
The price of crude is rising because traders fear that the impact of western sanctions against Iran over its nuclear programme could result in supply problems for the global economy.
Brent crude is already trading at over $125 a barrel and, in the short term, looks more likely to hit $150 than $100.
Exports from Iran are already down, and will fall further if the European Union's sanctions come into force in July.
The Saudis are responding to US pressure to pump more oil to compensate for any shortfalls from Iran.
Does this make sense? It certainly does.
The world economy looks slightly healthier than it did three months ago, but is extremely fragile and remains vulnerable to a steep rise in crude prices, which would raise business costs and hammer consumer incomes.
America is building up its stocks of oil in case the cold war between Iran and Israel turns hot. It may well.
guardian.co.uk
Things are warming up in the oil market.
News that Saudi Arabia, the world's biggest oil exporter, has booked 11 giant tankers to ferry crude to the United States is a clear sign that the big players in the market fear there could be trouble ahead.
The price of crude is rising because traders fear that the impact of western sanctions against Iran over its nuclear programme could result in supply problems for the global economy.
Brent crude is already trading at over $125 a barrel and, in the short term, looks more likely to hit $150 than $100.
Exports from Iran are already down, and will fall further if the European Union's sanctions come into force in July.
The Saudis are responding to US pressure to pump more oil to compensate for any shortfalls from Iran.
Does this make sense? It certainly does.
The world economy looks slightly healthier than it did three months ago, but is extremely fragile and remains vulnerable to a steep rise in crude prices, which would raise business costs and hammer consumer incomes.
America is building up its stocks of oil in case the cold war between Iran and Israel turns hot. It may well.
guardian.co.uk
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