Lloyds List: Oil prices jump on fear that tensions in Nigeria and Iran may halt exports: “Militant threats in Nigeria have forced Royal Dutch Shell to close down some of the country's production and evacuate 300 staff.”: Tuesday January 17, 2006
By Martyn Wingrove
OIL prices are on the climb again as Nigerian and Iranian political tensions intensify.
Prices jumped more than $1 per barrel in London as traders feared future oil exports could be halted in both Nigeria and Iran.
Analysts are expecting further price gains this week when US traders return today following a public holiday.
Militant threats in Nigeria have forced Royal Dutch Shell to close down some of the country's production and evacuate 300 staff.
An attack at the weekend on the Shell-run Benisede flowstation left one dead and 10 in hospital, plus a pipeline explosion last week closed down 106,000 barrels of daily oil production.
Meanwhile, Iranian ministers are threatening to halt exports if United Nations economic sanctions are imposed as it restarts nuclear research and development.
World powers met in London yesterday to refer Iran to the UN's security council, which could introduce sanctions, but did not come to a firm decision.
Iran's Economy Minister, Davoud Danesh-Jafari, warned that sanctions would cause oil prices to climb 'beyond levels the West expects'.
It is feared Iran could retaliate to sanctions by halting oil exports to Asia, Europe and North America.
Ahead of a meeting by the Organisation of Petroleum Exporting Countries this month, Iran has called for a decrease in production quotas to push up oil prices.
The Middle East country is the world's fourth largest exporter of crude, Opec's largest after Saudi Arabia, and produces almost 4m barrels per day.
Nigeria also has a key role in oil markets as it is West Africa's only member of Opec and produces close to 2.5m bpd, much of which is exported to North America.
One positive for oil traders is the restart of crude exports from Iraq's northern fields. A pipeline leading to Turkey's Ceyhan Mediterranean terminal reopened at the weekend.
- London security specialist Exclusive Analysis says the flow of foreign direct investment into Nigeria was sending a rather different message to the general perception, writes James Brewer .
Exclusive Analysis managing director Simon Sole said: 'We have started to look carefully at what the capital is telling us, because capital is well informed. Lots of Nigerians are returning to Nigeria.'
Noting the high level of corruption in Nigeria, the difficulties faced by Shell and the liberalisation of the energy sector attracting small oil companies, Mr Sole said that underwriting the country risk was becoming harder.
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