Hormuz closure can push global economies into recession

[Bilal Mahmud المكافح المخلص]

Hormuz closure can push global economies into recession

Tue Feb 14, 2012 5:21PM

“Iranian authorities can disrupt supplies of oil from the Persian Gulf by imposing tanker inspections or boarding merchant ships in their territorial waters.”

The Standard & Poor’s

An international economic institute says possible closure of the Strait of Hormuz by Iran in response to the Western sanctions will slow down the world economic growth and increase the oil prices.

Three reports published by the Standard & Poor warn about the likelihood of severe disruption of oil supplied via the Strait, through which 20 percent of the world’s oil flows, stressing that the act may boost oil prices to USD 150 a barrel and push global economies into a recession.

The reports discussed the impact of tensions in the Persian Gulf on the economy of the Middle Eastern states, the risks that closure of Hormuz would pose for companies looking for credit, and the threats to global economic growth rate due to an oil shock.

“Iranian authorities can disrupt supplies of oil from the Persian Gulf by imposing tanker inspections or boarding merchant ships in their territorial waters,” the institute added.

The reports stated that in case of such disruption, oil prices will increase “because markets would increasingly view armed conflict as a real, if remote, possibility.”

According to the reports’ authors, which includes Paris-based Jean-Michel Six, S&P’s chief economist for Europe, “Iran might respond to sanctions with ‘low-level provocation’ such as slowing shipping through the Strait of Hormuz to keep oil prices at a high level."

Iran's threats of possible closure of the Strait of Hormuz came after the US and its European allies imposed new unilateral sanctions against the country’s oil and financial sectors.

“If they [Western countries] impose sanctions on Iran's oil, not even a drop of oil will be allowed through the Strait of Hormuz,” Iranian First Vice President Mohammad-Reza Rahimi warned on Tuesday, December 27.

On the New Year’s Eve, President Barack Obama signed into law new sanctions which aim to prevent other countries from importing Iran's oil and doing business with the country’s central bank.

Following suit with Washington, EU foreign ministers agreed on January 23 to ban Iran's oil imports by member countries.

The Strait of Hormuz is a narrow shipping channel that leads in and out of the Persian Gulf between Iran and Oman.

SS/PKH/IS

Video Of The Week

Biography of the Companions of the Prophet Mohammed (pbuh) - Homs

WE NEED YOUR HELP SO WE CAN HELP!  PLEASE DONATE TODAY ZAKAT U.S.A.

اضغط هنا:

Zakat U.S.A. At A Glance OPOW

Donate To Zakat U.S.A. Donations Tax Deductable

ZAKAT USA ON FACEBOOK

 

Crisis In The Horn Of Africa Pictures 1432 AH

 

 

Click Here:  OPOW Slide Show

             

                  OPOW NEEDS YOUR HELP

 

 

If you like this article please consider donating to :  Oppressed Peoples Online Word

Mission Statement Of Oppressed Peoples Online Word

Oppresses Peoples Online Word On Facebook

O.P.O.W. Email:   [e-mail] 

 Recent Stories On Oppressed Peoples Online Word

World News Up-dated :  Mosaic World News

Press TV Live