The worst-case scenario is that the ratcheting tensions will end in a military confrontation that would close the Strait of Hormuz, the strip of water between Iran and Oman that represents the world's most important shipping lane.
Roughly 40pc of the world's seaborne traded oil passes through the waterway, so the suggestion that traffic could be hindered has inevitably lifted the oil price. Brent crude, London's benchmark oil, advanced 5.9pc last week.
The threat has arisen as Iran responds to Western sanctions designed to make it end a nuclear programme said to be aimed at producing an atomic bomb.
New Year's Eve saw Barack Obama, the US President, sign an act banning foreign financial institutions that do business with the Iranian central bank from trading in the US, which has refused Iranian oil since 1979.
Meanwhile, the EU – which takes about a fifth of Iran's oil exports – is close to imposing its own sanctions.
Source: Telegraph
