Sanctions against the oil-rich nation of Iran, which many fear is looking to develop an arsenal of nuclear weapons, are likely to drive down supplies of oil. A labor dispute in Nigeria, the largest generator of crude oil in Africa, is prompting the closure of platforms as one method of showing solidarity with protestors demonstrating against the subsidies for fuel coming to a close.
Japan cited the possibility of minimizing the amount of petroleum it accepts from Iran, which is on the brink of responding to sanctions by closing the strategic Strait of Hormuz, a strategic global passageway for commerce and trade.
"Tensions in Nigeria are helping to keep a solid floor under prices," analyst Andrey Kryuchenkov with VTB Capital in London told the news source. "Growing concerns over global crude shipments escalated as Tehran threatened to shut the Strait of Hormuz while the Pentagon made it clear that closing this vital checkpoint remains out of the question."
At 1:15 p.m. on Thursday, crude oil futures gained 1.18 percent, a $1.32 rise to $113.56 per barrel.
Thus far this year, the price of oil has gained 2.8 percent, according to Bloomberg news.
Now in their fourth day of protests, the Nigerian demonstrations are aiming to force President Goodluck Jonathan to bring back subsidies on fuel. Oil union Nupeng pulled back members from the oil fields to show support for the effort and apply pressure on the president. Another oil union, Pengassan, is set to begin closures of installations for oil and gas as soon as this Sunday.
The feuding sides are having trouble reconciling circumstances surrounding the ruling administration's pull back of the decision to eliminate the subsidy of fuel. That decision has pushed the price of gasoline to more than double. The month of December saw Nigeria pump 2.2 million barrels of the energy commodity per day, Bloomberg estimates indicate.
Tensions regarding the situation in Iran also are playing into the increasing price of oil, according to The Wall Street Journal.
On Wednesday, one of the nation's foremost nuclear scientists was killed, which the Middle Eastern nation blamed on the U.S. and Israel.
Iran ships as much as 2.5 million barrels of oil per day and the political inferno is reaching all the way to the subcontinent.
The Economic Times reports refiners of the energy commodity in India are laying back-up plans should Iran close the strait and disrupt the supply of crude oil. Senior executives told the publication that no administration officials have told them to taper the import of crude oil from Iran.
"We have not asked companies to cut imports from Iran," additional secretary Sudhir Bhargava with the oil ministry told reporters while at an industry seminar.
The nation is experienced at pursuing secondary options, which began in December 2010 when India's central bank prohibited payments for crude oil from Iran via a regional clearinghouse amid the pinch applied by the U.S.
The flow of crude from elsewhere has picked up, one unnamed official from the oil ministry told the news source.
"Apart from the traditional sourcing from the Middle East, companies have increased their imports from Latin America and Africa," the official told The Economic Times.
Dependence of Indian Oil Corporation, the subcontinent's biggest refiner of the energy commodity by volume, on crude oil from Iran is very nearly negligible, the anonymous official said.
An executive with IOC said the company is not too worried about any disruptions in the supply of crude from Iran.
"IOC is not concerned about any supply disruption due to Iranian problem as it imports little over one million tons of crude oil from Iran," the executive told the news source. "But any disruption would certainly spike global crude oil prices."
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