EU and US sanctions against Iranian oil sales have already been priced into the market and will probably have only a limited impact on the country’s exports. Coming into force on 1 July, the sanctions will also affect global crude prices far less than last year’s shut down of the Libyan energy sector.
“The Iran [sanctions] story has been in the market since November,” said one trader. “It’s already built into the oil price.”
But if the sanctions fail to bring a change in the Iranian government’s nuclear strategy, Israel, with or without the support of Western governments, may be more inclined to launch a military strike on Iran on its own – a move that would immediately inject more risk into oil markets, if it threatened another war in the Middle East.
A shot in the foot
Reports on 15 February that Iran would pre-empt the...