The International Atomic Energy Agency has concluded that Iran has indeed been working on developing nuclear weapons capabilities. The impact on the price of crude oil? Not so much: In early afternoon trading, it was up all of 50 cents a barrel, to $96.02 (U.S.) in New York.
That might sound like a bit of a letdown, given that some observers had been wondering in recent weeks if oil’s impressive 27 per cent rebound from lows in early October had been driven partly by concerns with Iran. Or, perhaps, this is a classic case of buying the rumour and selling (or ignoring, as the case might be) the fact.
The IAEA was certainly clear in its conclusions. According to Bloomberg News, which gained access to a 15-page restricted document, Iran carried out “work on the development of an indigenous design of a nuclear weapon including the testing of components.” The document drew on “credible” intelligence from more than 10 countries.
While suspicions have often been directed at Iran’s nuclear ambitions, the IAEA’s report takes these suspicions up a notch. According to Bloomberg, Commerzbank said in a research note on Tuesday that the report “could increase the risk of a military attack on Iran’s nuclear facilities,” which “justified a certain risk premium on the price of oil.”