Oil prices reached £76.39 ($121.10) per barrel with the hike of $1.52 yesterday, highest in the last 8-months. The reason behind such an unexpected increase is the cutoff of oil supply to UK and France based companies by Iran. It was a reaction of Iran to European Union’s sanctions imposed.

Alireza Nikzad, a spokesman for the oil ministry said: ‘Exporting crude to British and French companies has been stopped … we will sell our oil to new customers.’

There has been growing concern over the present situation in Iran. USA, including all its allies, has been continuously raising concerns over the suspected development of nuclear weapons by Iran.

While the European Union’s decision was expected but Iran’s strong reaction has escalated diplomatic tensions. Iran has been continuously denying the (mis)use of nuclear energy for the development of nuclear weapons.

The British firms won’t be affected much by the move as Iran’s supply amounts to less than the 1 percent of the total supply. Things would have been worse had the European Union not stopped buying maximum of oil supply from Iran in July last year.

The number if barrels, supplied to EU by Iran, had already reduced by 300,000 barrels before yesterday’s move.

Foreign Secretary William Hague lamented Iran yesterday for the nuclear Cold war. The news report the appeared in Iran’s state run agency about Iran’s potential to destroy British Warships in Gulf has added fuel to the fire.

The Britain was openly challenged of horrible consequences if it joined hands with US and Israel to attack Iran.

Though Britain and other members have been denying it is planning to join any military action against Iran which has been braving its stand since long now.

US and Israel, on the other hand may have attacked Iran but the setbacks in Afghanistan and Iraq will be riddling in their minds. Whatever the future course will be, the cold war has already shown severe impacts on the business world.