Bloomberg News

Morgan Stanley Says Disruption in Iran Oil May Raise Prices

November 09, 2011

Nov. 9 (Bloomberg) -- Oil prices may be “significantly higher” if supplies from Iran are disrupted following a United Nations report on the country’s nuclear plans, according to Morgan Stanley analysts.

“While shut-in Iranian production is certainly not our base case, we highlight the upside risk to our price forecasts if tensions flare to the point of conflict,” analysts including Hussein Allidina in New York said in a report yesterday.

It’s unlikely that there will be a “significant supply disruption,” according to the analysts, and there will be “little lasting impact on crude prices.”

Iran produces 3.6 million barrels a day of oil, about 5 percent of the world’s total, the analysts said. About 2 million barrels a day were exported to countries such as Japan, Korea and Italy.

Iran carried out “work on the development of an indigenous design of a nuclear weapon including the testing of components,” the International Atomic Energy Agency, based in Vienna, said yesterday.

Crude oil for December delivery rose $1.28, or 1.3 percent, to $96.80 a barrel on the New York Mercantile Exchange yesterday, the highest settlement since July 28. Prices fell $1.22 to $95.58 at 9:07 a.m. in New York.

--Editors: Charlotte Porter, David Marino

To contact the reporter on this story: Moming Zhou in New York at

To contact the editor responsible for this story: Dan Stets at

Steve Ballmer, Power Forward
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