After an extended weekend for all of us, yours truly is back amongst the midst of writing the blog. With all the happenings on either side of the Atlantic, investors are turning their heads towards the east especially Iran, for any significant giveaways to inculcate into their trading strategies. The West had introduced sanctions against Iran, but it appears the Republic, inspite of the impending sanctions, is capable of throwing the world economy into a deeper crisis.

The European consumers of Iranian oil have shuddered at the very thought that Iran may block the Hormuz Strait in response to the economic sanctions from the West (as depicted in the apparent false rumors in the recent days). If Iran does manage to undertake this horrendous step all efforts aimed at overcoming the financial crisis, will be wasted in an instant. Tehran assumes the indisputable advantage in the Islamic world since its economy boosts of being the strongest one in the region. As long as the greenback stays afloat with all its debts and problems, Iran will manage to stand the hardships for months. Just a few months will be enough for the country to cause the global economic depression.

 Iran has been trying to prove to everyone that the countries of the Arab world can be as important in global economy as Western countries are. Iranians are well versed with the fact-what may happen in case they decided to block the Hormuz Strait. The crisis could push the crude oil prices higher and higher, while the global economies decline in their recovery endeavors. Washington is interested in interfering in Iran’s internal affairs under the guise of noble actions. Europe is putting on a brave face proclaiming it will purchase oil from Saudi Arabia. Whatever said or expressed, European officials realize that they will have the hardest time. Saudi Arabia can increase its oil output by only two million barrels a day. This is only the one side of the feared coin!

The other side paints us unpleasant glimpses for the reduction of demand on fuel in developed countries. Everything that was done and dusted in the struggle against the debt crisis can be wasted. Italy and Spain have just succeeded in reducing refinance rates. The economies that depend heavily on the Iranian oil do their best not to notice the ‘Iranian problem’. It is worthy to note that Iran exports most of its fuel to China (20%), Japan (18%) and India (16%). Europe is not the numero uno in the exports department. But the impact of a stoppage could be widespread and disastrous. So who exactly has a wider impact on the current markets-the West? Think Again!