Oil prices unstable, US loses ally Japan

Oil prices unstable, US loses ally Japan

ISTANBUL
Oil prices unstable, US loses ally Japan

U.S. Treasury Secretary Timothy Geithner (L) and Japan's Finance Minister Jun Azumi attend a joint news conference at the Finance Ministry in Tokyo January 12, 2012. REUTERS Photo

Oil prices fell moderately on Jan. 13 following reports that the European Union may postpone en embargo on Iranian resources. However, the price remained still high at nearly $100 a barrel amid strikes enveloped major oil producer Nigeria.

The U.S. bid to bring an end to Iranian oil exports keeps losing ground as even Japan, the sole big economy which had signaled it can obey sanctions, said yesterday it has not made a decision on the issue yet.

Japan’s policy on Iranian oil was left in doubt on Jan. 13 after the prime minister distanced himself from the finance minister’s pledge to reduce oil imports from Iran. Prime Minister Yoshihiko Noda said the pledge, made by Finance Minister Jun Azumi only a day before in a joint press conference with U.S. Treasury Secretary Timothy Geithner, was Azumi’s “personal opinion” and the government wanted to discuss the matter with the business community.

The foreign minister and government’s top spokesman also made comments suggesting Japan was not yet committed to reducing Iranian oil imports, which could potentially damage the credibility of its foreign policy and its dealings with the United States, its most important ally.

High prices good for Iran

Separately, Gemba said in a joint news conference with French Foreign Minister Alain Juppe that sanctions would be ineffective if they end up boosting oil prices, a negative development for the global economy but a boon for oil-producing Iran.

“The higher oil prices go, the better it gets for Iran. We need to take steps in a careful, smart way,” Gemba said, Reuters reported.

Juppe, however, said he did not fully share Gemba’s concerns. When there was a similar situation with Libya, there was not much of an increase in oil prices and there were other countries to turn to for oil, Juppe said.

“Geopolitical supply side issues continue to be the key bullish factor affecting oil prices,” Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore, told Agence France-Presse.

Crude falls 0.7 percent

Crude oil for February delivery fell 73 cents, or 0.7 percent, to $98.37 a barrel at 10:47 a.m. on the New York Mercantile Exchange. The contract dropped as much as $1.40 to $97.70, the lowest level since Dec. 21. Oil is headed for a 3.1 percent decline this week, according to Bloomberg News.
A high-level U.N. nuclear agency delegation will visit Iran late this month to try to clear up claims of covert weapons activities that have stoked tensions between Tehran and the West, diplomats said Jan. 13.

The trip to be led by International Atomic Energy Agency Chief Inspector Herman Nackaerts and the agency’s No. 2 Rafael Grossi would last from Jan. 28 through the first week of February, one Western diplomat told AFP.

Another envoy also said the visit, two months after an IAEA report on Iran took suspicions to a new level that Tehran is developing nuclear weapons, would “likely” begin Jan. 28, although it was not yet definite.

Meanwhile, British Prime Minister David Cameron met with King Abdullah of Saudi Arabia, the world’s top oil producer, on Jan. 13. He also met the conservative Islamic kingdom’s foreign minister, Prince Saud al-Faisal, and Intelligence Minister Prince Muqrin bin Abdulaziz.

Strikes in Nigeria
 
A nationwide strike and mass protests shut down Nigeria for a fifth day running on Jan. 13, but union leaders called for a weekend pause in demonstrations as talks sought to avert a halt in oil production. A first round of negotiations between labor leaders and top government officials, including President Goodluck Jonathan, failed to reach a deal on Jan. 12 over soaring fuel prices, but more talks were set for the weekend.

Compiled from AFP and Reuters reports by the Daily News staff in Istanbul.

USA; Japan, oil, Iran, embargo, sanctions