In the event that the economic sanctions against the Middle Eastern state of Iran go through, there could be serious repercussions. This was brought to light by an Iranian Member of Parliament. The Member of Parliament exclaimed that Iran would close the Hormuz Strait if ‘European sanctions on Iranian oil ‘saw the light of day.’
This was not a cold threat as sources suggest that his tone was rather serious. Furthermore, Muammar Gaddafi did not act rationally even though his life was on the line.
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Arsalan Fathipour, a lawmaker deemed by many to be conservative, was noted for having said that the recent freefall in oil prices would not last long.
It was reported that Fathipour stated that no single drop of oil would pass through the Hormuz Strait if the sanctions prevailed. He further added that such a scenario would lead to the inevitable increase in oil prices. Fathipour states that those who advocated for the sanctions would be answerable to their own people.
Another thing that came of note during his interview with Alalam News Network was his confidence in Iran. Fathipour pointed out that Iran could find new customers for oil. Although, this seem unlikely as more and more countries put sanctions on Iran.
Officials revealed on Sunday that Iran had stored up hard currency and imports for a ‘showdown’ against the EU sanctions.
From the prevailing circumstance, it appears as if the whole Iranian government is streamlined towards stopping the sanctions. Even Vice President Mohamed Reza Rahimi stood against the sanctions and requested the people to prop up officials’ efforts.
The EU also recently dictated that all oil import contracts stemming from Iran would face the axe by Sunday. In simple terms, Iran would be sealed off from the EU from Sunday onwards.
European countries would also cease insuring Iranian oil. This news adds a new chapter to Iran’s long story with sanctions. Apparently, the U.S and a big part of the west previously levied sanctions.
At the moment, it is too early to tell. All the same, this news is bound to send ripples across the entire global market. As we noted in the past, even if Iran blocks the Straits of Hormuz, it would likely not be able to keep them closed for more than a short time. Furthermore, they would likely face a harsh United State military reaction for their actions.
Oil prices have basically discounted the news, as the sanctions have been planned to go in effect for months. Furthermore, the slowdown in economic growth is reducing oil demand.