Will The Iran Sanctions Spark An International Oil Crisis?

[dennis]

As if the global economy wasn't chaotic enough these days, the escalating conflict over Iran's nuclear ambitions is now threatening to wreak havoc on the world oil market. On December 31, President Obama signed into law the toughest American sanctions yet against Tehran, which aim to cut off the country's petroleum revenue by penalizing financial institutions that do business with the country's central bank. Days later, Europe's leaders agreed in principal to an embargo on Iranian crude.
Of course, there are consequences to pushing the world's third largest oil exporter out of the energy market. If the sanctions work, crude supplies will get tighter. Meanwhile, Iran's military leadership, predictably irate the West's economic assault, has threatened to cut off a crucial oil shipping route in retaliation. If they do, it could send prices spiraling even higher. Are we heading for a new era $150 oil and a new global recession? It's a conceivable, if remote, possibility.