Good post by Energy Source that analyses Iranian sanctions and its impact on Oil markets.

The US in its efforts to pursued China to take a tougher line against Iran, is working with Saudi and UAE to counter absence of exports of Iranian Crude to China.   The absence of Iran’s oil from the market (4 million barrels per day) will have a Katrina like effect on Oil markets. Nevertheless, IEA is confident that the West with its 1.5 billion barrels of oil stockpile can supply China up to one year.

China remains skeptical of the sanction line against Iran. As one analyst notes, China built its own Nuclear Weapon capability in face of Western sanctions.  There is also the question of China’s indiginous Muslim population not to mention China’s own ambitions in an Arabian Gulf less dominated by the USA.

On another front, the FT reports that swiss based oil traders such Vitol, Glencore and Trafigura stopped Gasoline trading with Iran.

The heat could be about to get more intense in the Iran Sanctions.