Business, Finance & Economics

Oil prices surge 4 percent on Iran worries


The test-firing at an undisclosed location in Iran of an improved version of the Sejil 2 medium-range missile which the Islamic republic says can reach targets inside Israel.


Vahi Reza Alaee

There's nothing like the threat of war to get the attention of global oil markets.

That's especially true when that rising tension involves Iran, an important oil producer which happens to sit on the Straits of Hormuz — the key shipping lane that handles some 20 percent of all the world's oil trade. 

Oil prices jumped 4.2 percent Tuesday to $102.96 a barrel. That's the highest closing price in nearly eight months.

"It's mostly about Iran right now," Peter Beutel, analyst with energy risk management firm Cameron Hanover told CNNMoney.

The oil market focus today, as it's been since last week, is on Iran's threat to close the Straits of Hormuz, as well as its recent test-firing of of the Sejil 2 medium-range missile.

Then, of course, came Iran's warning to the US today to keep its aircraft carrier USS John C Stennis out of the Persian Gulf.

"We recommend ... to the American warship that passed through the Strait of Hormuz and went on to the Gulf of Oman, not to return to the Persian Gulf," The Associated Press cites Gen. Ataollah Salehi as telling Iran's official IRNA news agency.

"We don't have the intention of repeating our warning, and we warn only once," Salehi reportedly said.

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