Oil Heads Higher as Super Tankers Stop Shipping Iranian Oil!
As sanctions become tighter, Overseas Shipholding Group and Frontline Ltd. said they would stop shipping Iranian oil. These two companies alone control over 100 super tankers (VLCCs).
So now, not only is Iran going to have a hard time figuring out how to get payment for their oil…but now they’re going to have a hard time figuring out how to ship it…or ship enough of it.
As the U.S. and Europe are clamping down more and more on Iran, it’s beginning to affect the price of oil, both in Brent Crude and WTI Crude. Let’s take a look at the daily chart of Brent Crude below. Click on the charts to enlarge them.
As you can see from the chart above, Brent Crude broke out about a week ago and is heading for new, recent highs now.
On the other hand, in looking to the WTI Crude daily chart below…it looks like it may have just broken out of a recent 3-month consolidation today and will likely begin to head much higher again too. Check it out below.
In fact, I think with this long, multi-month consolidation that’s gone on that the breakout could be very directional and head much higher over the course of the upcoming months. How high? There’s a good chance it will reach the old 52-week highs around $115 a barrel.
All of this is about to get ugly as more pressure is applied to Iran.
If oil prices continue to soar, watch the Canadian dollar. It may very well provide a shelter from this potential “oil war”.