effect EU Iran sanctions on oil prices 2012

effect EU Iran sanctions on oil prices 2012 ; Oil prices were lower in Asian trade today amid renewed concerns over Europe's ability to deal with its towering debt crisis. New York's main contract, West Texas Intermediate crude for delivery in March, was down 22 cents to $98.11 a barrel. Brent North Sea crude for March delivery shed three cents to $109.83.

European Union finance ministers are set to meet in Brussels today to forge ahead with plans to implement a fiscal pact and finalise a treaty setting up a permanent debt rescue fund.

The ministers will also decide on the terms of a second bail-out for Greece - the epicentre of the euro zone's debt crisis - after private creditors refused to write down the country's debt any further over the weekend.

Traders will also be closely watching the situation in the Middle East as the EU readied itself to slap an embargo on Iran's oil exports. EU foreign ministers are also meeting today to strengthen existing sanctions on Tehran by banning imports on Iranian crude as well as targeting finance, petrochemicals and gold.

The ministers will also discuss seeking new suppliers able to match the easy conditions offered by Tehran to Greece, which imports over a third of its crude oil from Iran. Contacts are underway with Saudi Arabia and hopes are high that Libya can soon increase its production.

The market for oil futures suffered its worst trading week of 2012 so far following an indication from senior EU officials that suggest a ban on Iranian oil could be delayed for a further six months in order to prevent supply issues.

However, analysts at Goldman Sachs amongst others have forecast 2012 to be a year of growing prices in the oil markets, as ongoing supply fears amongst key producers and a shortage of additional marginal capacity look set to drive up prices.

Furthermore, the potential for further difficulties in the middle East and in particular around the Strait of Hormuz could cause a sharp jump in prices in both futures and underlying markets, with Goldman Sachs suggesting $200 a barrel as a distinct possibility.

While the Iranian supply issue will eventually cause rising prices, analysts have suggested Saudi Arabia may be able to increase its output in order to meet with the capacity needs of European economies.

Oil futures have seen week trading through the week, alongside most other commodities which have been kept low as a result of ongoing uncertainty of the Eurozone picture For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today

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