Iran Halts Oil Sales to British and French Companies

Iran wants to convince the rest of the world that it is not developing nuclear weapons. Other nations are not buying the company line from the hard-line Islamic nation and have with responded with various sanctions against Iran meant to apply economic pressure to get it to abandon its nuclear program. Iran's response to the situation is to trade blows with the sanctioning nations.

The Iranian oil ministry announced on Sunday that it will no longer sell crude oil to British and French oil companies. It is widely seen as a move done in retaliation to earlier sanctions leveled by the European Union. EU leaders decided to cease importing Iranian oil by July 1 to express their dissatisfaction with Iran's continued efforts to build a nuclear program and develop nuclear weapons.

Word of the standoff has already made an impact on oil prices in the United States. Oil prices rose by 1.9 percent -- marking the fourth straight day it has increased -- over concerns that Iran's preemptive ban will disrupt oil supplies worldwide.

Both sides are adamant they will survive this economic standoff. Iran plans to make up for potential lost revenue by selling crude oil to new markets. The European Commission reported that EU member nations have enough crude oil reserves to satisfy their energy needs for 120 days. Saudi Arabia is reportedly looking to fill the void and increase exports of crude oil to Europe in the months ahead.

The tension building between Iran, the EU and the U.S. is going to reach a breaking point sooner rather than later. Iran's reactionary ban in the face of sanctions shows that no amount of economic sanctions will force the nation from its desired objective of becoming the next nuclear power. The only real solution to this problem will likely be a military one.

Israel has already threatened using airstrikes against Iran to destroy its nuclear facilities to keep any Iranian leaders from attacking the Israelis with nuclear weapons. U.S. President Barack Obama has also threatened Iran with airstrikes if the nation attempts to close off the Strait of Hormuz that connects the Persian Gulf and the Gulf of the Oman. Such an action would be harmful to the global economy because one-fifth of the oil traded in the world comes through that waterway each day.

Each development seems to bring Iran closer to open warfare with the U.S. and its allies. Given the toll from the wars in Iraq and Afghanistan over the past decade, that is a prospect that should inspire fear everywhere.