Iran sanctions and $100 bbl oil.

Iran: Has the Rising Price of Oil Trumped Sanctions?

By Victor Comras

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And what effect has the current international sanctions and the additional US measures actually had on Iran. Well, it is clear that they have had some impact, but certainly not enough to deter Iran from its present course. Several European banks have pulled back, or put on hold further discussions concerning some major oil field, pipeline and other potential financial commitments.

Banks still doing biz in Iran.

Bank Sepah has had to close down its direct operations in Europe, and Bank Saderat and Bank Melli are cautiously redirecting their accounts away from European financial institutions. European boardrooms are also reflecting on the risks and likelihood of further EU sanctions measures, and as to whether they should really be concerned by threats of additional US regulatory activity. They are also concerned about their public relations in the United States, the growing impetus behind US disinvestment movements, and the threats of possible new US congressional action...................

The fact is that Iran’s oil export revenue surge has served to shore up Iran’s otherwise foundering economy, at least for the short term. Last February Iran officials expected oil revenues to surpass $50 billion, and this can probably be raised by some 20 to 30 percent a result of the spot market price increases. Either way, increased oil revenues have resulted in a government revenue surplus which can be used to substitute for the loss of foreign funding for current critical infrastructure projects. However, this increased oil revenue has not insulated Iran’s vulnerable commercial class from the potential impact of any new European trade restrictions that might be directed at them. And this commercial class, which is crucial to providing new job development and for moderating current high urban unemployment rates, could prove to be Iran’s Achilles Heel.

November 14, 2007 12:55 PM Link

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The sharp increase in oil prices is bringing havoc on 3rd world countries, and will lead to a world economic down turn if OPEC can't get oil prices down. And this world recession will cripple Iran.
The price of oil has doubled for many small countries, while they must have energy, they will cut budgets in other areas, leading to economic downturn.

In the USA there is high oil px, devaluation of Dollar ( if China dumps dollars in open market they will be shooting themselves in the foot as the $ will devalue as they dump them ie lower value ) ,Gold at $800, inflation indicator, sub-prime problem, and eventually 150,000 troops looking for jobs at wars end.

Gerald