Iran war 'could triple oil price' (21 June 2006)

BBC ^ | June 06 | BBC

[freedomdefender]

World oil prices could triple if the West's stand-off over Iran's nuclear programme escalates into conflict, the Saudi Arabian government has warned. The Saudi ambassador to the US, Prince Turki Al-Faisal, said such an event could send prices spiralling from their current level of about $70 per barrel.

Iran is the Opec cartel's number two oil producer and analysts fear it could halt exports if the dispute worsens.

Tehran is currently examining proposals aimed at ending the diplomatic impasse.

Strait of Hormuz

"The idea of somebody firing a missile at an installation somewhere will shoot up the price of oil astronomically," Prince Turki told a conference hosted by the United States Energy Association.

He warned that any conflict involving Iran would threaten the Strait of Hormuz, through which most Middle East nations export their oil.

Tankers carry 17 million barrels of oil through the channel every day, according to the International Energy Agency.

US President George W. Bush has refused to rule out a military attack should diplomatic efforts to reach an agreement with Iran fail.

The US Energy Secretary, Sam Bodman, has maintained that the country would be in "good shape" if Iran did put a stop on its oil exports, thanks to America's emergency stockpile of almost 700 million barrels of crude oil.

The threat of a cut in Iranian oil exports has been the main factor driving oil prices higher in recent months, with the price fluctuating either side of $70 per barrel.

[freedomdefender]

This is from last year, but the basic warning is still worth pondering.

[jrooney]

So says the liberal propaganda machine BBC. Nothing to ponder. We should bomb them and will bomb them sometime for GW leaves office. Amanutjob’s days are numbered.

[SaxxonWoods]

This should get the enviros on board, heh.

[JasonC]

Or we could just tell them we are going to take it all if they try.

Might concentrate minds slightly. Obviously we can close a heck of a lot more than one strait, anytime we please.

[familyop]

It’s propaganda. The price of oil will go much higher for much longer, if we allow Iran to build nuclear weapons.

[familyop]

Here’s some information for the BBC.

S. Korea, U.S. verifying reports on test of new N.K. missile in Iran: source
http://www.freerepublic.com/focus/f-news/1834307/posts
(4,000 kilometer range—will reach London and the Vatican—May 16th, 2007)

[RepublitarianRoger]

I thought the US has banned oil imports from Iran since 1979. Is this incorrect?

Or perhaps the logic goes that Saudi Arabia, which supplies around 25% of our oil, would create false shortages and jack up the prices for us in rebellion?

I’m no economist, so maybe someone can explain to me how our oil prices would triple if we attack a country that, as far as I recall anyway, doesn’t supply us oil.

[Oliver Boliver Butt]

bomb them and take the oil.

[SaxxonWoods]

The problem would be the blocking of the Strait of Hormuz by the hostilities. I think about half the world’s oil (including Saudi oil) goes through there.

[RepublitarianRoger]

Ah, OK.

[Kozak]

Yeah but oil will drop to 20 bucks a barrel when WE annex the oil fields in Iran.....

[TheThinker]

I doubt we are going to stop the Iranians from achieving nuclear technology. It would cost too much economically. Iran is probably the biggest reason, among others, that we went into Iraq. We’ve decided to do to the Iranians what we did to the Russians by encircling them with allied countries.

[Eagles Talon IV]

It is hard to track exactly where imported oil actually originated. Contracts for crude are bought and sold on the commodity exchange and unless I am wrong these contracts don’t specify origin. I believe the authors claim of a price increase is because a war would shut down the supply from Iran and impact the total availability in the market place. Supply is cut so due to demand staying where it is, the price would increase.

Of course if the price goes to high then world wide economies suffer, demand for oil slips and prices begin to fall. The market place, in the end will take care of things.

[quant5]

Yes, the current strategy seems to be to outspend them as we did with the Soviets but Iran will go down in a few short years vs. decades like the Soviets. Giant cracks on their economic windshield are accelerating like mad.

However, the madmen of Iran’s leadership is different then the Russians. Before their economy collapses, their is a high probability they would launch an offensive on Israel.

Such an attack would yield devastating consequences to their country but the strange mindset of the Middle East and overconfidence never seems to change hence the high probability of such occuring.

Of course, such an event would cause a drastic increase in oil prices and on top of the sub-prime disaster the financial impact to the US and global economy will be devastating.

[quant5]

Yeah I do believe the DOD and Administration has thought about this potential problem.

However, Iran has to think about the problem of three aircraft carries and dozens of destroyers, subs and of course 200 hundred aircraft, cruise missles etc parked just off their coast right now.