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Summary Oil prices climbed as tensions increased over the security of oil shipments from the Persian Gulf.
The price of oil has stayed around $100 a barrel in recent weeks on concerns about tanker traffic through the Persian Gulf.Traders worry that those shipments, which supply one-sixth of the worlds exports, could slow if Western nations continue to confront Iran over its nuclear program. Iran has threatened to close off the Persian Gulf if the U.S. and other nations impose more sanctions. Those threats grew louder Monday after the European Union agreed to stop buying Iranian oil in July.Benchmark oil rose 67 cents to $99 per barrel at midday in New York. Brent crude, which is used to price foreign oils that are imported by U.S. refineries, rose by 50 cents to $110.36 per barrel in London.Analysts said the European embargo would force a reshuffling of oil markets to make up for the loss of Iranian oil to the West. China, which is one of the biggest buyers of Iranian crude, probably will buy more Iranian oil at below-market prices as the embargo begins. That will reduce Chinas demand from other oil-producing countries that would then sell more to Europe.Iran needs to sell its oil to someone, independent analyst and trader Stephen Schork said. Outside the West, Iran really has only one buyer: China. That means Chinas probably going to get some sweetheart deals.
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