Oil jumps to three-month high following Iran 's warning

| 1/17/2006

Price for crude oil surged past the $65 per barrel mark, just days after Iran warned that prices would rise if the country was subjected to economic sanctions.

As European leaders met to discuss possible sanctions against Iran for resuming its weapons-grade uranium program, Iran ’s economy minister said on Iranian state radio Monday, Jan. 15, that any such actions could “raise oil prices beyond levels the west expects.”

In trading on the New York Mercantile Exchange on Tuesday, Jan. 17, the price of light, sweet crude rose to a high of $65.53 per gallon. This marked the highest price for oil since Oct. 3 in the wake of Hurricanes Katrina and Rita.

The Associated Press reported that analysts blamed both the Iranian situation and an attack on an oil platform in Nigeria for the spike in prices.

During the week of Jan. 8, a Royal Dutch-Shell Group of Companies oil platform in Nigeria was attacked, shutting down more than 100,000 barrels per day of production. Another assault Jan. 16 on a Shell pumping station near the Nigerian Delta forced staff evacuations and further exacerbated the situation.