Possible nuclear weapons developed in Iran

9 Nov

The battle is between Iran’s capital Tehran and the west. The war tactics may include nuclear weapons and a surprise attack from Israel. And the prize remains the same. Oil at an affordable price.
Whilst the increase in price by the barrel has caused unrest amongst traders, it is the possibility of the development of nuclear weapons in Iran that has sparked headlines today.

The UN’s International Atomic Energy Agency have been gaining evidence over the past eight years to suggest Iran have carried out “work on the development of an indigenous design of a nuclear weapon including the testing of components”.

This has led Ehud Barak, Israeli’s defense minister, to warn in a local radio interview, “we are probably at the last opportunity for co-ordinated, international, lethal sanctions that force Iran to stop.”

But Tehran are unlikely to cower in the trenches. As the world’s third-largest oil exporter, Iran can afford to increase oil by the barrel. What’s more, the BBC have reported Iran’s envoy to the IAEA Asghar Soltanieh actively condemned the claims of the development of a nuclear weapon, describing the report as “unbalanced, unprofessional and prepared with political motivation and under political pressure by mostly the United States”.

Yet it is clear from some market participants reactions in a survey they are predicting a significant price rise by the barrel. The survey, ran by The Rapidan Group in Washington, showed some stating there could be an increase of 175 dollars, to a high total of 290 dollars a barrel. Currently, the Financial Times reported the price has rallied to almost 115 dollars.

Even more worrying, Iran could retaliate by closing the oil flow through the Strait of Hormuz.

Meanwhile, there is a supply uncertainty elsewhere in Libya, Yemen and Syria. This doesn’t help the west’s situation, as it means Tehran can up the prices as the oil is in such high demand.

A report from the US department of energy said, “Oil prices continue to face upward price pressure because of supply uncertainty resulting from ongoing unrest in the oil-producing regions of the Middle East and north Africa”.

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