Oil saw a brief spike on Wednesday, December 28, as Iran threatened to close down the Strait of Hormuz, one of the world's most vital oil passageways.
The Associated Press reports that two officials from the Middle Eastern nation mentioned the possibility of closing the strait in response to increasing pressure from the West to open up its nuclear program for inspection and renewed calls for sanctions against the country.
"Closing the Strait of Hormuz is very easy for Iranian naval forces," Admiral Habibollah Sayyari, Iran's naval chief, told state-run Press TV, according to the AP. "Iran has comprehensive control over the strategic waterway."
The Strait of Hormuz is responsible for around one-sixth of all the world's oil, serving as the only water access from the oil-rich Persian Gulf to the rest of the world.
Reuters reports that Brent crude oil rose more than 1.4 percent in response to the news, reaching as high as $109.50 per barrel, before settling to $109.27 per barrel.
The Associated Press reports that prices quickly dropped as low as $108.45 per barrel after Saudi Arabia pledged to account for any drop in production because of the closure of the strait.
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