Iran Warns of Oil Price Spike, Shoots Down U.S. Drone [Updated]

Iranian protesters gather outside the British embassy as some break into it and bring down the British flag (L) in Tehran on November 29, 2011. More than 20 Iranian protesters stormed the British embassy in Tehran, removing the mission's flag and ransacking offices.
Iranian protesters breaking into the British Embassy in Tehran. Photo: Atta Kenare/AFP/Getty Images

Fallout from the invasion of the British Embassy in Tehran earlier this week by a pack of marauding students has so far included the shuttering of Iran’s London embassy, the pullout of diplomatic staff by the likes of France, and talk of new sanctions against the Iranian regime, most significantly a new measure (recently endorsed unanimously by the U.S. Senate) to restrict the Iranian central bank’s access to world financial markets. The direct result of that, most experts say, will be a sharp decline in Iran’s oil exports. Now a spokesman for the country’s foreign ministry cautions that moving ahead on such a measure may drive the price of a barrel of oil to $250, more than double its current levels — while such a figure seems rather bombastic, oil analysts have cautiously been raising the specter of $200-a-barrel oil. As the war of words continues, there was also a little territorial spat between Iran and the U.S. today, after a V-shaped American recon drone was shot down for allegedly trespassing into Iranian air space. In other late-breaking news from the region, a small bomb exploded near the British Embassy in Bahrain — no one was injured.

Update: The Atlantic’s Jeffrey Goldberg runs through a list of recent events in Iran that indicate, at least to the conspiracy-minded, that U.S.-Iran hostilities may already be under way, including a top general killed in a military base explosion, another explosion at the Isfahan nuclear facility, rumors of a super-virus war, and the assassination of several nuclear scientists and officials.

Related: Iranian Students Storm British Embassy in Tehran, Make a Mess

Iran Warns of Oil Price Spike, Shoots Down U.S. Drone