Iran stalemate sees oil price rise

21 July 2008

The failure to bring about a resolution in talks over Iran's nuclear programme has prompted an increase in oil prices.

Last week the market saw a record drop in the cost of a barrel, but as tensions in the Middle East return, prices are once more nearing $130 (£65.26) in New York, according to Reuters.

Over the weekend the US threatened sanctions if Iran did not satisfy concerns over its nuclear capability in the next two weeks.

Commodities analyst David Moore told the news agency: "The outcome of the Geneva meeting with Iran was quite a disappointment and was the main factor in the lift in oil prices this morning."

Worries that a tropical storm will disrupt production in the Gulf of Mexico are also being blamed for the increases.

Iran recently threatened to close the Strait of Hormuz, through which 40 per cent of the world's crude oil passes, if Israel attacked its nuclear programme.