Strike on Iran Would Roil Oil Markets, Experts Say
Price Hits Record Close; U.S. Tightens Sanctions
By Steven Mufson
Washington Post
A U.S. military strike against Iran would have dire consequences in petroleum markets, say a variety of oil industry experts, many of whom think the prospect of pandemonium in those markets makes U.S. military action unlikely despite escalating economic sanctions imposed by the Bush administration.
The small amount of excess oil production capacity worldwide would provide an insufficient cushion if armed conflict disrupted supplies, oil experts say, and petroleum prices would skyrocket. Moreover, a wounded or angry Iran could easily retaliate against oil facilities from southern Iraq to the Strait of Hormuz.
Oil prices closed at a record $90.46 a barrel in New York yesterday as the Bush administration tightened U.S. financial sanctions on Iran over its alleged support for terrorism and issued new warnings about Tehran's nuclear program. Tension between Turkey and Kurds in northern Iraq, and fresh doubts about OPEC output levels also helped drive the price of oil up $3.36 a barrel, or 3.8 percent.
Although the Bush administration is not openly threatening a military strike against Iran, the president recently spoke of needing to avoid "World War III," and Vice President Cheney said that the United States would "not stand by" while Iran continued its nuclear program. "We will not allow Iran to have a nuclear weapon," he said.
Oil traders said that even if the chances of military conflict with Iran were small, the huge run-up in oil prices that would result encourages some speculators and investment funds to bid up the price of oil, adding a premium of $3 to $15 a barrel.
(Continued here.)
By Steven Mufson
Washington Post
A U.S. military strike against Iran would have dire consequences in petroleum markets, say a variety of oil industry experts, many of whom think the prospect of pandemonium in those markets makes U.S. military action unlikely despite escalating economic sanctions imposed by the Bush administration.
The small amount of excess oil production capacity worldwide would provide an insufficient cushion if armed conflict disrupted supplies, oil experts say, and petroleum prices would skyrocket. Moreover, a wounded or angry Iran could easily retaliate against oil facilities from southern Iraq to the Strait of Hormuz.
Oil prices closed at a record $90.46 a barrel in New York yesterday as the Bush administration tightened U.S. financial sanctions on Iran over its alleged support for terrorism and issued new warnings about Tehran's nuclear program. Tension between Turkey and Kurds in northern Iraq, and fresh doubts about OPEC output levels also helped drive the price of oil up $3.36 a barrel, or 3.8 percent.
Although the Bush administration is not openly threatening a military strike against Iran, the president recently spoke of needing to avoid "World War III," and Vice President Cheney said that the United States would "not stand by" while Iran continued its nuclear program. "We will not allow Iran to have a nuclear weapon," he said.
Oil traders said that even if the chances of military conflict with Iran were small, the huge run-up in oil prices that would result encourages some speculators and investment funds to bid up the price of oil, adding a premium of $3 to $15 a barrel.
(Continued here.)
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1 Comments:
Call me a cynic, but as oil prices rise don’t those companies and countries that have oil benefit? Every time Cheney talks, he’s just helping his oil cronies. What was the price of a barrel of oil when Bush Administration began in 2000 – well under $30. Bush’s antics and speculation have driven the cost up. The WP story mentions the Strategic Oil Reserve, but fails to mention that Bush capped it (after denouncing Gore in 2000 and Kerry in 2004 for suggesting tapping in to it).
I offered my thoughts in my blog that America is essentially The Coalition of the Only.
It’s time America reject politicians that advocate pseudo-punishment of sanctions. In short, cooperation will be largely symbolic and circumvented by companies and countries. They don’t work and don’t address the real issue.
Control of fissile material is the question, but Bush is more interested in maintaining influence in the region. And based on the reaction from Iraq, Afghanistan, Russia, Turkey, and India … nobody is going along.
Someday, someone will write a book entitled “The Impotency of a President – The George W. Bush Story” chronicling how America’s influenced waned during his presidency.
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