Oil price jumps amid Iranian threat

PanARMENIAN.Net - Oil prices jumped over 2% Tuesday, December 27, crossing the $100-barrel-mark after Iran threatened to choke off the flow of oil passing through the Strait of Hormuz.

The Iranian threat came in response to a recent tightening of Western sanctions against Iran that attempt to limit the amount of oil that country can export.

"If Iran oil is banned, not a single drop of oil will pass through Hormuz Strait," Iran's 1st Vice President Mohammad Reza Rahimi said Tuesday, Dec. 27, according to the Iran State News Agency.

Iran is also currently conducting Naval exercises in and around the Strait.

Over 15 million barrels of oil a day passed through the Strait in 2009, according to the U.S. Energy Information Agency. That's about a sixth of the world's total oil production and a third of all oil traded worldwide. EIA calls it the "world's most important oil chokepoint."

Most of the oil passing through the strait goes to Asia, but because oil is a globally traded commodity, a shortage of oil in any one place impacts oil prices worldwide, CNNMoney reported.