Iran vows that oil prices will not go down

We’ve been discussing the possibility of some form of war or conflict with Iran repeatedly, and the oil markets have certainly taken notice of the “increased chatter” on that topic.

Together with the ongoing unrest in the oil producing provinces of Nigeria, the market was unpleasantly surprised by the test by the Iranian Navy of a new ultra-rapid torpedo, seeing it as both an escalation of the crisis by the Iranians (thus increasing the likelihood of conflict), and a very serious threat to supertanker traffic in the Persian Gulf.

Prices went up by 2$ in an instant, not an unsignificant jump, and bringing them at their highest ever, barring a couple of days after Katrina struck.

But the most worrying is probably the declaration by the Iranian vice-Minister for oil:

Mohammad Hadi Nejad-Hosseinian, Iran’s deputy oil minister, yesterday hinted at Iran’s ability to influence the oil price when he said: “Any fall in oil prices this year is unlikely…A sum of factors show that prices will not fall in the next two or three years unless there is a conspiracy against oil.”

DailyKos