Crude Oil Heads North amidst Sour Allegations by Iran

Crude scaled new heights after Iran’s supreme leader said U.S risked disrupting oil shipments from Persian Gulf region. The U.S. could "seriously endanger energy flow in the region" by acting against Iran, Ayatollah Ali Khamenei said yesterday.

Iran, the fourth-biggest oil producer, borders the Strait of Hormuz. About 17 million barrels a day is transported through the waterway. Countries along the Gulf produce 27 percent of the world's oil, according to the U.S. Energy Department.

Crude oil for July delivery rose 82 cents to $ 73.15 a barrel on New York mercantile rate.Futures reached $ 73.84,the highest since May 11. Oil touched the magical $ 73.35 on april 21 and 24 the highest since trading began in 1983. Prices are already escalated by a 33 percent from a year ago.

Khamenei didn’t disclose his stand or plan of action on alleged U.S action but last week U.S., China, Russia, U.K, France and Germany offered Iran incentives to abandon any nuclear weapons development and U.S gave an ultimatum of a few weeks to accept the offer.

Such statements are really playing havocs in commodity market while Iran relies between 80 and 90 percent of country’s export earnings.It made $ 31.5 billion in 2004. Sales will shoot by 23% to $ 55 billionthis year as oil prices head north.

Oil has already risen 20% this year amid turmoil in Nigeria and Iraq and the current Iran crisis prove to be of no help either.