As violence escalates in Iraq, are rising oil prices threatening the global economy?  Saxo’s Ole Hansen says that Brent Crude has settled into ‘a bit of a nervous range’ and is stuck between 112 and 114  USD/Barrel.  Volatility is up 15 percent which is the highest in three months. But he says the range is still way below the average of the 28 percent average since 2011.

The Iranian president has warned that Shi’ite holy shrines should be protected in the south of Iraq, indicating this arch enemy may act if provoked.  Meanwhile Saudi Arabia has warned against foreign powers intervening. 

Iraq still exports around 3.3 million barrels a day.  Oil supplies have not yet been disrupted to any significant extent in either the south or the north of the country.  So far there is no impact on global growth but Hansen warns this could change at any moment if things escalate further.