Iran's Oil Embargo and its effects on our Economy.

Bullseye1

Mr Gilmore said there was no doubt that the embargo would have an impact on oil prices, but it was difficult to quantify just how much petrol, diesel and home heating oil would increase by.
"While this is clearly an issue for consumers, the expected price increase has to be weighed against the seriousness of the problem of Iran's nuclear programme."

Full story here
http://www.rte.ie/news/2012/0123/iran.html

I've been reading that many of our haulage companies are in serious trouble as it is. And now the EU has agreed on an heavy sanctions against Iran. Surely this is going to do us enormous damage with prices at the pumps sure to rise substantially (we might even see 2 Euro a litre).

Will this in your opinion have a major impact on our already fragile economy? Mine is yes.

I am sure that the other OPEC countries will increase their output, but will it be enough to control the frenzy which is sure to happen on the markets?

Gumbo

Havent the haulage companies already gone on record saying they fill up their trucks when abraod now. they say they can save €600 per fill up in belgium for example.

Bullseye1

But what about the companies who operate within our own borders? Won't a knock on effect of this be higher food prices as a result of delivery increases and thus inflation could rise substantially.

Gumbo

Bullseye1 wrote: »

But what about the companies who operate within our own borders? Won't a knock on effect of this be higher food prices as a result of delivery increases and thus inflation could rise substantially.

yes, 100% likely.
The traffic on the pavements is gona get alot worse as more and more walk to work

Bullseye1

The problem I see with the embargo is if the EU are the only ones abiding by it we are cutting our own throats. What if the Eastern European or Asian countries decide to buy up the slack.

rolion

Price for petrol will go to €1.99 (in few seconds after the first $hot)...
then it will go back to 'normal' (in few years after last $hot)...

TBH...who cares anymore !???
Don't u see that all signs are confirming that we are heading to a close road,one way !??

shanered

Absolute disaster for us!
And the present direction we are going is not offering any solutions, until we see some change things look very bleek when thinking of the future..

Crazy Horse 6

Was this part of the 5 point plan or the yes for jobs campaign?

Manach

This is an action that we voted for as part of Lisbon. So this is de facto Irish foreign policy which is something the voter gets a say in.
A positive might be that a united show of force might force the Iranians back to the bargining table as a possible alternative of a nuclear armed Iran and the damage that could do would really hike oil prices.

carveone

rolion wrote: »

Price for petrol will go to €1.99 (in few seconds after the first $hot)...

I personally don't believe this is possible. If levis cost $200 each, people wouldn't buy them. Problems with supply notwithstanding. The US is the consumer that matters here and we saw before that prices above $120 bbl were essentially economically unsustainable. Demand destruction above that level caps the price.
Still, I'm getting a bit of deja vu here. Think we can do a 2008 scenario again???

rodento

Sure we will have our own source soon enough:D

http://www.irishtimes.com/newspaper/ireland/2012/0120/1224310517453.html

skafish

The part of all this that I don't understand is why the US and the EU have such a huge issue with Iran becoming a nuclear power, while another middle Eastern country in occupation of its neighbour, in contempt of the UN, and cited regularly for breaches of human rights is activley encouraged to develop its nuclear arsenal.

What makes Israel better than Iran?

shanered

Its obvious Isreal will always be protected by "the West".
But to what ends and to the detriment to who...
Sure looks like we will find out soon enough...
The media are starting to build this up.

Dannyboy83

http://www.irishtimes.com/newspaper/pricewatch/2012/0123/1224310621734.html

In July 2008 a barrel of oil cost $147 (€110)
A barrel of Brent last Tuesday morning was $112 (€87),
In July 2008, when oil prices peaked, a litre of petrol here cost €1.36, which is 19 cent less than it costs today.


Although crude-oil prices are now much lower than they were in July 2008, the cost of fuel in Ireland is much higher
The average price of a litre of petrol is now about €1.55, according to the price-tracking website pumps.ie.

“Since the emergency budget in late 2008 there have been five separate tax increases, including increases in VAT, the introduction of carbon tax and three excise duty hikes,” he says. “Combined, these have added 21 cent to the price of a litre of fuel. Had successive governments not done this, we would be looking at a per-litre price today of €1.34.”

The bad news is that things are likely to get worse. While long-term oil prices have made fools of many self-styled experts in recent years, the short term is easier to predict. Faughnan says that prices will probably be higher in a month’s time than they are now.

RichardAnd

I was considering the purchase of a new car this year but the price of fuel has put me firmly off the idea. If I am fully honest, I don't need a car save for a few trips of necessity now and then and when these crop up, I can borrow my parents car or find another way around the problem. I'd imagine alot of people are drawing similar conclusions as I've actually seen very few 2012 registered cars, although I'm willing to put that down to coincidence.

I'm fortunate that I live in dublin so a car is not a total necessity but I really wouldn't like to be in a rural areas with fuel prices as high as they are.

Dannyboy83

RichardAnd wrote: »

I'd imagine alot of people are drawing similar conclusions as I've actually seen very few 2012 registered cars, although I'm willing to put that down to coincidence.

It's not coincidence - There was always going to be few 2012 cars anyway (and 2013/2014).

The car market in 2010/2011 was on amphetamines, due to the scrappage scheme.
Now the amphetamines are gone, and the crash is setting in.
http://www.irishtimes.com/newspaper/breaking/2011/0907/breaking23.html

I went from a 00 1.9 litre (which I bought early 2008) to a 2011 1 Litre.
I couldn't give the 1.9L away when I tried in 2011.
Most of the savings I had counted on have been wiped out now, due to the government reneging on the low emissions tax and the increase in fuel price etc., but with current fuel prices, I couldn't have afforded to keep the 1.9litre anyway, so I may not have saved much money, but at least I'm not losing extra......hope that makes sense.

If you can do without a car, then stay the hell away from them.
May be possible in Dublin, not possible anywhere else in Ireland imo, they are a necessity.

antoobrien

The embargo isn't having an effect on the price of crude because it's already been priced in since the Christmas/new year period (when the sabre rattling with Iran started). It's especially clear if you look at the 3 month graph, which peaked in the first week of January at almost $114.



The fluctuations in the price look more due to the changes in the price of the dollar vs other currencies (especially the euro).

Over the past few weeks the price of Brent crude (north sea) is actually steady or down in € terms - currently trading at about €85 (it had been as high as €88.65)