It's foolish to study this problem only in a military context without pondering the economic fallout of a likely cutoff of all Persian Gulf crude for several weeks during and after an Iran campaign.
You can bet that an Iranian contingency plan is to fire conventional SCUDs at the Saudi oil terminals in the event they are attacked, as well as mining the Hormuz etc.
Burning tankers in the PG will lead to an immediate price surge to past $150 or even higher for crude. The economic consequences to futures, hedge funds and derivatives markets in incalculable, and could lead to a global financial meltdown.
Remember, this is Ahmadiniwakjob's ultimate goal: to cause global chaos, and bring on an islamic apocolypse leading to his worldwide caliphate. Whether he realizes his goal before or after he gets nukes is not important. A global economic catastrophe will suit his purposes nicely.
Any major war with Iran at this time (and a 300 target air campaign surely qualifies!) is likely to lead to economic fallout we cannot even imagine.
Can't disagree with that, but I don't think we have an alternative.
This dilemma is definitely the most interesting thing going right now. From what I hear, if we do anything, we need to act quickly. And if we act at all, it has to be comprehensive in that not only must we take out all nuclear facilities but, as you said, we must also hold the economic fallout to a minimum.
D@mned difficult puzzle to solve.
"It's foolish to study this problem only in a military context without pondering the economic fallout of a likely cutoff of all Persian Gulf crude for several weeks during and after an Iran campaign."
You forget... in the runup to the gulf war, fears raised the price of oil ... but the first night of the gulf war, oil prices DROPPED and kept going down.
Military strike would not be a crisis but a resolution.
Agreed. Much as I'd like to see them shaken down, nobody on the planet can afford it except maybe the eskimo or aborigines.
"Burning tankers in the PG will lead to an immediate price surge to past $150 or even higher for crude. The economic consequences to futures, hedge funds and derivatives markets in incalculable, and could lead to a global financial meltdown."
Um, not... burning even a large number of tankers would have a very minor impact of global markets, less than Katrina/Rita certainly. shipping rates would go up but overall supplies would still be there.
Nor would a SCUD strike at any oil field be impactful.
Again, Katrina/Rita did more damage than an iranian military strike (and politically it would benefit us to have Iranians lash out at other middle eastern countries).
Probably the worst they could do would be to hit a few oil terminals, but even the saudi have several alternatives.
Any short term event would be met with strategic reserves.
Hitting infrastructure could have an impact, but again, look at the Gulf war experience - saddam burned entire kuwaiti oil fields, and still the oil markets calmed down.
Part of the reason is that *100 different coutries* produce oil. Yes, middle east is most important, but they are under 40% of total production. Infrastructure is more widely dispersed in the the greater scheme of things than you might assume.
Nor would an Iranian boycott produce a crisis, except in Iran. consider:
Non-OPEC oil production is going to increase 1.8 million barrels of oil this year (CERA estimate) and similar next year. That would displace Iran's full production of 3 mbd.
So, while all such scenarios could impact production or supplies, they are of a marginal amount not an absolute amount. Combined with the buffer that the strategic oil reserve provides, it results in smoothing of the impact.
IMHO, it will be major, but not a long war, just 12 hours; it will also be fast, like a coup de grace.
We WILL have the last laugh at Iran's expense.
"As of late 2002, Iran held 90 billion barrels of proven oil reserves, or roughly 9% of the world's total. The vast majority of Iran's crude oil reserves are located in giant onshore fields in the southwestern Khuzestan region near the Iraqi border and the Persian Gulf."
source: http://www.globalsecurity.org/military/world/iran/oil.htm
Looks like Iran is producing somewhere around 4 million barrels a day. Note the interesting location of their reserves.
Could be Iraq gets a little bigger? maybe?
They want nukes? Let's give them one. Drop one out in the middle of the desert. Tell them the next one won't be landing in such a harmless location should they not immediatly abandon their nuclear ambitions.
They possess hundreds of new generation Silkworm type C802s and the capability to launch them from land or sea. They possess hundreds of deep water mines (hard to defend against).
They could turn the Straits of Hormuz into a blazing cauldron that would shut down oil for a lot more than a few weeks.
An Iranian sponsored attack in Maalaca would do even more damage to the world economy.
Guns, Gold and Groceries BTTT....