Oil Prices Climbing as Iran Warns U.S.
Oil prices continued to rise well over the $70 per barrel mark after the Iranian leader warned the United States that any "misbehavior" directed at his country could threaten the flow of oil in the Persian Gulf. Ayatollah Ali Khamenei's remarks articulated what most in the West has known for years: Iran would use oil as a weapon in its nuclear dispute with the West.
Approximately 20 percent of the world's daily crude oil consumption passes through the Gulf region via oil tankers each day. The U.S. State Department discounted the perceived threat, noting that 80% of Iran’s economy depends on the flow of oil. At the crux of the latest dispute, with the United States and other governments, are Iran’s nuclear ambitions, which the European Union and the U.S. believe are driven solely by its desire to acquire nuclear weapons.
Iran’s saber rattling comes on the heels of the recent escalation of tension between the United States and Venezuela. Venezuela, one of the largest exporters of crude oil to the U.S., has recently signaled its intentions to foster closer ties China.
Oil prices have also been affected by production issues at U.S. refineries as peak summer driving season kicks off, as well as the fragile nature of worldwide crude oil supplies. In the United States, the Arctic National Wildlife Refuge (ANWR), a promising untapped source of domestic oil, remains off-limits to exploration. H.R. 5429 is ANWR’s best hope for passage in a long time and with gasoline prices climbing again, proponents of the bill hope that the stars are finally aligned in their favor. The House passage of the bill on 25 May along a largely party-line vote will not guarantee that drilling can commence. In the recent past, the Senate has been the biggest stumbling block to ANWR drilling, and, once again, the issue will be decided by a handful of votes this fall. Democrats are expected once again mount a filibuster which could kill the bill.