Total says Iran tensions won't have big oil price impact

AFP, Friday 27 Jan 2012

Consumers 'should not be overly concerned' claims oil head, adding that an Iranian blockade on the Hormuz Strait would also hurt the Islamic Republic's economy

Geopolitical tensions over Iran should not have a major impact on oil prices, the head of French oil major Total said Friday, adding that it was not in Tehran's interest to close the Strait of Hormuz.

"The Iranian crisis is a serious subject, but it isn't new," Christophe de Margerie said on French television channel BFM Business from the World Economic Forum in Davos.
 
"And concerning the price of oil, which is of concern to consumers and our clients, I don't think they should be overly concerned," he added.
 
"The price of oil is at the moment relatively high, but there is no reason why it should rise on that type of news."
 
The European Union this week imposed a ban on the Islamic republic's oil imports to be phased in by 1 July, with the Iranian parliament considering retaliating with an immediate export ban.
 
Iran, OPEC's second largest producer, has been selling about one-fifth of its crude to EU nations, with Greece, Spain and Italy the top buyers.
 
The embargo, aimed at dissuading Iran from building a nuclear weapon, could see the major oil exporter react by closing the strategic Strait of Hormuz.
 
The narrow waterway that links the oil-rich Gulf with the Arabian Sea and beyond is crucial to the global economy, as about 40 per cent of global oil exports pass through it.
 
Any blockade of the Strait of Hormuz would send oil prices soaring by more than $30 a barrel, according to an IMF report on Wednesday.
 
But de Margerie said that by closing the Strait of Hormuz, Iran would also be blocking its own oil exports.
 
"I don't see why they would block the Strait of Hormuz when they need to get their own ships through," he said.
 
China is the top importer of Iranian oil.
 
"They are certainly trying to show they are free and independent, but not provoke a crisis," de Margerie added.
 
New York's main contract, West Texas Intermediate crude for delivery in March, gained eight cents to $99.78 a barrel in afternoon Asian trading on Friday.
 
London's main contract, Brent North Sea crude for March delivery was up 31 cents at $111.10.
 
De Margerie said the high price of oil was due to more than just Iran tensions as several producer countries have run into problems, as well as the general increase in energy prices.
 
Concerning France, where pump prices are at record highs, de Margerie said the recent slide in the euro against the dollar, in which oil is priced, was mostly to blame.
 
"The euro has much effect on the price of energy that any geopolitical issue," he said.
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