Oil prices soared Tuesday as tensions grew over key Persian Gulf oil shipments.
In afternoon trading benchmark crude jumped $3.80, or 3.8 percent, to $102.63 per barrel in New York.
Brent crude, which is used to price foreign oil varieties that are imported by U.S. refineries, rose $3.87, or 3.6%, to $111.25 per barrel in London.
Prices climbed as soon as exchanges opened for the first day of 2012 trading. Commodity prices tend to rise at the beginning of January as investors start the new year with a fresh round of trading. This year prices were driven by heightened concerns that Iran might try to close the Strait of Hormuz in the Persian Gulf to oil tankers, if Western nations impose new sanctions.
Iran warned the U.S. to stay out of the strategic waterway, where one-sixth of the world’s oil shipments pass every day. On Monday its navy fired a cruise missile as part of a military exercise.
The U.S. and European nations are mulling further economic sanctions against Iran because of its nuclear program. A standoff could result that would be damaging to the global economy.
A dustup with Iran could slow crucial oil supplies at a time when the world needs every drop. Global oil demand is expected to rise to a record 89.5 million barrels per day in 2012.
Three of the world’s largest economies — the U.S., China and India — continued to grow with increased manufacturing activity in December.
Meanwhile, Obama continues to dither over the Keystone XL pipeline.
Senior Iranian officials announced here in Tehran on Monday that experts of the country’s Science and Defense Ministries are likely to launch joint cooperation to study and analyze the technology of the US drone that was downed by Iran early in December.
“We have had some meetings with the Defense Minister about the kind of cooperation that the academic community can have with our country’s Armed Forces on the US spy drone and once we come to the final conclusions we will be ready for cooperation,” Iranian Minister of Science, Research and Technology Kamran Daneshjou told FNA on Monday.
“The country’s universities have informed the Science Ministry that they are ready to study and analyze the US stealth drone and demanded the Science Ministry to inform the Defense Ministry of their preparedness in this regard,” he added.
Iran first announced on December 4 that its defense forces had downed the aircraft through a sophisticated cyber attack.
The drone is the first such loss by the US. US officials have described the loss of the aircraft in Iran as a setback and a fatal blow to the stealth drone program.
The RQ-170 has special coatings and a batwing shape designed to help it penetrate other nations’ air defenses undetected.
So what was Obama doing when he refused to act to destroy the drone? (See video above)
Obama doesn't have time for national security
Obama golfs while Iranians neutralize our stealth drone program. George W. Bush golfed 24 times in 8 years. Obama has golfed 90 times in 3 years. I think he needs to do less golfing, and more national security decision making.
President Barack Obama said Monday that the United States has asked Iran to return a U.S. drone aircraft that Iran claims it recently brought down in Iranian territory.
“We’ve asked for it back. We’ll see how the Iranians respond,” Obama said in a news conference, alongside Iraqi Prime Minister Nouri al-Maliki.
A top Iranian military official previously vowed not to return the unmanned American stealth plane that it says it has.
[…]Former U.S. Vice President Dick Cheney on Monday criticized Obama’s decisions on the drone, but for an entirely different reason. He said that, after the aircraft went down, the president should have ordered an airstrike over Iran.
“The right response to that would have been to go in immediately after it had gone down and destroy it,” the Republican, who served with President George W. Bush, told CNN’s Erin Burnett. “You can do that from the air … and, in effect, make it impossible for them to benefit from having captured that drone.”
Instead, “he asked nicely for them to return it, and they aren’t going to,” Cheney said.
[…]One U.S. official said the United States can’t be certain it’s the real stealth drone, because U.S. personnel don’t have access to it. But he added there’s no reason to think it’s a fake. However, a second senior U.S. military official said that a big question is to how the drone could have remained virtually intact given the high altitude it is believed to have crashed from.
In an interview broadcast live Monday night on Venezuelan state television, Iranian President Mahmoud Ahmadinejad said nothing to suggest his country would grant the U.S. request.
“The Americans have perhaps decided to give us this spy plane,” Ahmadinejad said. “We now have control of this plane.”
Speaking through an interpreter, Ahmadinejad said: “There are people here who have been able to control this spy plane, who can surely analyze this plane’s system also. … In any case, now we have this spy plane.”
He added, “Very soon, they’re going to learn more about the abilities and possibilities of our country.”
On Tuesday, a semi-official Iranian news agency said authorities have shrugged off the U.S. request. Defense Minister Gen. Ahmad Vahidi said the United States should apologize for invading Iranian air space instead of asking for the return of the unmanned aircraft.
Remember when Iran was having their elections and they started shooting people down in the street? Unlike Germany, France and Canada, Obama had nothing to say about that. Ronald Reagan would have had something to say. Margaret Thatcher would have something to say. But Obama had nothing to say. Maybe the Iranians looked at what Obama did and decided that Obama is a paper tiger.
WINTERY KNIGHT 