Euro zone fails to mount ban on Iranian oil, oil investments dip

Crude oil futures sank today, dipping near the $101 per barrel mark as the European Union’s embargo on Iranian imports hit a series of snags. The organization’s slow progress with sanctions against the Middle Eastern nation has been taking a serious toll on both crude oil’s standings on the market charts and investment in general.

West Texas Intermediate crude oil prices for delivery in February currently sit at $101.41 per barrel in electronic trading on the New York Mercantile Exchange, showing a decrease of 83 cents. Oil investments in the American contract rose yesterday after a car bombing in Iran sparked more tension between the OPEC member and Israel.

Brent crude oil prices lost 46 cents and settled at $112.82 per barrel on the ICE Futures Exchange in London.

Prices of the fuel made a strong rally during yesterday’s session after an announcement from China reached the market that oil imports gained 6% since December. China remains the second largest crude oil consumer in the world, and its massive expansion efforts have been a major source of support for the floundering fuel. Signs of receding inflation in the prolific nation spell good news for global oil investments.

Crude’s recent ability to stay above the notoriously resistant $100 mark has also been attributed to the escalating tensions between Iran and the powers of the West regarding the OPEC nation’s controversial nuclear program. However, the mounting sanctions against Iran were stalled somewhat today as EU’s members raised concerns of whether existing contracts should remain exempt from the looming import ban. Several key EU members are heavily dependent on Iranian oil, however officials of the organization have repeatedly stated that an overtly slack import ban would weaken the embargo as a whole.

Iran has notably responded to the most recent sanction threats from the US by promising to close down the Strait of Hormuz, a crucial route for the bulk of the region’s crude oil exports.

By Chris Termeer