Iran could cut West's oil supplies in event of war, warns American chief

[bemildred]

Iran could trigger a global terrorist campaign and choke the West's oil supplies in the event of war with America, the top US commander in the region has warned.

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"Number one, they have naval capacity to temporarily block the Straits of Hormuz and interfere with global commerce if they should choose to do so," he said.

"Number two, they've got a substantial missile force that can do a lot of damage to our friends and partners in the region.

"Number three, they've got a pretty robust terrorist surrogate arm that could in the event of hostilities cause problems not only in the Middle East but globally.

Telegraph UK

[Zodiak]

1. All true

God help us

[poverlay]

4. The only ones in the room stupid enough to trigger such madness

are the BFEE and their supporters. Even they won't do it unless they're sure to make tons of cash in the process.

Which is entirely possible and frighteningly likely given the greed of these bastards.

To bring us full circle
I refer you back to:

God help us...

[Kelvin Mace]

2. No, they can INDEFINITELY block the straight

by sinking a couple of tankers moving through it. Not to mmention destroying loading facilities well within their missile range.

Oil would then run $125-$200 a barrel, gasoline $5-$9 a gallon.

[Miss Chybil]

3. Bush wants Iran to cut off the oil.

That way he and his friends can make even more money on even less oil.

[teryang]

8. Consider the inventories build up in the US

I recently heard an oil trader actually admit on CNBC today that the high inventories had to be maintained from this point forward until the political situation with Iran was resolved.

I believe that high prices do change buyer consuming behavior allowing a build up. Once inventory accumualtion is recognizd, isn't the oil industry sophisticated enough to buy to order? But they are not doing that despite pronouncements that oil will drop into the mid fifties or lower. Why?

The election, is one possible explanation. I don't that that move is profitable in the short term.

The other explanation would be anticipation of interruption in oil supplies.

[Miss Chybil]

9. There is not one thing this administration has done to increase the flow

of oil, or to reduce consumption. In fact, it has been the opposite and the oil companies have reaped record profits. It's obviously very profitable to reduce supply.

I'm really not informed about the inventories, but I do believe the current price dip is due to the upcoming election. We will know for sure in December and January.

[teryang]

10. The supply is increased relative to demand presently

If prices continue to decline, demand will increase. Lower prices equals lesser profits for now. My point is that the build up in inventory is related to reduction in consumer demand as prices increase to highs, that part is over. The absence of an adjustment by the industry with respect to inventories is entirely political at this point, related to the election cycle and the possibility of a major interruption in supply. This includes Saudi actions in maintaining current levels of production. This is backing of the bush crony capitalism regime.

Typically interruption of supply is a political/economic objective of an unscrupulous insiders. The size of any interruption anticipated in a conflict or standoff with Iran whether resultant to trade sanctions or outright warfare will be beyond our experience in 1973. Inventories will decline after the election in November to restore windfall profits to the oil majors, unless bushco really intend to attack Iran, in which case, prices will skyrocket anyway.

[Miss Chybil]

11. I think we're on the same page here. You're just more informed and

more eloquent than I. I'm wondering, though, did demand really decrease that much over the last year?

[teryang]

13. I don't know the numbers

But I think it did. Most experts agree that supply can't be increased significantly. I'm basing this also on what kind of cars and trucks people have stopped buying, we know those numbers. We also know that rail transport is way up because of shippers switching to more efficient rail from trucking. Air transport isn't doing well either because of fuel costs. I think that most people affected by increased energy prices including industry are trying to reduce energy related costs. This has got to have some effect and contribute to fuel inventory buildup. I heard that Walmart was installing the new low wattage lighting in hundreds of their stores. Prices change behavior.

But I think that economists and programmers can anticipate this and that after the initial trend is recognized there needs to be some other explanation for every tank farm in America to be filled to the top. That inventories remain high after significant price drops which trigger increased demand indicates to me that inventory builds may be deliberate and not price motivated. Of course the economy is suffering from various body blows other than energy costs and consumers may just be worn out. The seasonal lull and the elections will be behind us soon and then all will become clear.

I think that energy leadership knows that something big is coming. It may just be pre-election manipulation. During the first year of the first term, just what did Cheney discuss with corporate energy producers that he won't disclose to Congress? What was the energy plan? Attack Iraq?

[Miss Chybil]

14. And Iran?

You've asked the million dollar question. What did Cheney do in his secret energy meetings? I can only pray history will tell us.

[Hawkowl]

16. DISAGREE

Supply and demand only set the price in a market with many, many suppliers and many buyers in a FREE MARKET. The oil/gasoline market is not a free market. It is a cartel, technically an oligopoly. Prices in an oligopoly are set threw a COLLUSION process.

Let me give you an example. Let's say a company, Exxon/Mobil, decides they like making record profits off the high oil prices and the fact they get reduced leases, monumental tax breaks, no environmental enforcement, etc. from a rethuglican government.

Now Exxon/Mobil knows if the Dems take charge in November it is going to cost them a lot of money. So they could target certain states, say Iowa and Missouri, (currently two of the states with the absolute lowest gas prices for unexplained reasons), for cheap gas to placate the masses and to help out rethuglican incumbents.

Exxon/Mobil is perhaps one of what, maybe four or five, giant oil companies in Iowa and Missouri. Say Conoco/phillips, Texaco, BP, Royal Dutch Shell.

If one corrupt company decides to drop the gas price 50 cents, the others follow suit to preserve market share. If one corrupt company raises the price a dime the others pile on to reap the extra profits. Gasoline is notoriously price INELASTIC (technical geek econ term) meaning that people don't change their buying habits for price increases. At least not much and not right away. So this means that supply and demand have a greatly reduced role in actually setting the price. You can see that there doesn't have to be a conspiracy to set the price. The fact that only one company is corrupt will set the entire market price. The other's are simply following the leader and acting out of their own self interest.

The fact that oil is controlled by a cartel (opec) and our western oligopoly of corporate pirates is the key to understanding gas price movements.

Supply is easily manipulated and used as an excuse to set exorbitant prices and reap astronomical profits. It also makes for perfect sense for the oil companies to use their pricing power to influence elections and keep the oil men in office. Saudi Arabia has admitted to pumping up supply before the 2004 elections.

[teryang]

20. I agree that market prices are manipulated by the majors

this is well known. but market forces are at work. when gas prices fall consumption goes up. when I drive a toyota instead of dodge dakota, I'm responding to higher prices and reducing demand. If I can't afford a toyota, i drive the old full size car less. My point was that market reaction is not really enough to explain the topping off in inventories occuring now. I don't think this is diaagreeing with your point. One obvious factor is Saudi activity, which actually proves your point. They have a vested interest in the current power structure and are voting for their friends in the bush energy military cabal. They hope to see them and the big banks and investment houses through the election. By virtue of their size they force other opec countries to go along.

I would go even further with your thesis and say that because of interlocking directorates which integrate energy, media, banking and other financial interests, that propaganda, misinformation, censorship, and selling and buying of options and derivatives are coordinated to manipulate prices in many sectors. In the current case, this is obviously for political purposes. Those on the inside can frontrun the market and make money at the same time. It isn't a conspiracy, it's what they do, boom and bust.

Right now, they are working so hard to move liquid capital from energy and resources to tech. It's the good all days all over again. That's the paradigm shift anyway. How can this be with two wars going and a third war bigger than the other two is on the way? While they do it, they'll be buying energy and selling tech while the herd follows the instructions from the media and newsletters and pile into tech, which is where they began several years back. The three top investment banking companies control 1.5 trillion in cash to start momentum plays whenever they want. This is leveraged in derivatives and options. The little people make little money with the trend for a while, the hedges make big money with the trends, and then get wiped when the 1.5 trillion stops on a dime and changes direction. This renders fundamentals meaningless in the short and intermediate term.

In short, I don't really disagree with what you say. i have never believed that free markets exist. But that doesn't mean that economic behavior doesn't exist.

[krispos42]

17. they don't really need to increase the flow of oil yet

Plenty of oil is being pumped to meet the demands of the world supply, at least for now. It is the fear of a major dispution of that supply that affects the crude futures market.

If Iran stops pumping oil, Venezuela joins them in protest, and the Iranian military takes the Saudies and the Kuwaities off of the world market by blockading the Straight of Hormuz and/or the destruction of ports, pumping machinery, etc., then we will have a situation where enough oil is not being pumped to meet worldwide demand.

THEN we're screwed! Get yourself some AstroGlide and a mouthguard, 'cuz you're going to have to bend over, grin, and take it!

[4dsc]

18. Supply and demand or market manipulation??

How Periodic Are the Oil Price Fluctuations?

A good read here on the recent drop in oil prices..

http://www.theoildrum.com/story/2006/9/21/102525/040#more



The amplitude of the big slide in oil prices from $75 to $61 was a little bit a surprise for everybody. I'm trying to answer the following question: is this big drop significant or simply a consequence of a very volatile market?

There are some cycles in oil price fluctuations. For instance, the seasonal fluctuations in oil demand or even the change of oil contract at the end of each month. On top of that, there is the usual chaos of geopolitical events, Hurricanes, etc.. The objective is to see if we can apply the Periodicity Transform in order to capture eventual cycles and get an idea of future oil market volatility.

[krispos42]

22. self-delete

[wakeme2008]

5. I am betting it will cost us at lease one aircraft carrier

and other major Navy ships.

[pinerow]

6. Headline misleading...

At first glance, one would think this was a threat on the part of the Iranian president, when in actuality is a "what-if" scenario...my two cents...let's not get into a war there...seems simple enough. This looks like another attempt to desensitize the west into waging another war...sheesh!!

[teryang]

7. Actually the threat is not just to friends and allies in the region

The unconventional forces of Iran, oriented toward asymetric tactics, are capable of conducting offensive operations directly or indirectly against American forces in Iraq. Hellooooo! While Iranians are blamed for supporting or encouraging the insurgency in Iraq, the truth is they have done little or nothing in this respect. Any comparison of Shite operations in Iraq to those of Hezbollah recently reveals this. Iraqi Shia forces are poorly armed and poorly trained. They clearly do not have the inventory of effective light weight portable anti armor weapons that Iranian and Hezbollah forces use.

Also, the capability to conduct "world wide" terror operations is an unsubstantiated exaggeration. The world wide effects would result from interruption of oil flow from the mideast due to operations in the gulf region.

[jazzjunkysue]

12. And China could call in our loans. We're totally dependent on these

governments.

This is total horseshit.

I thought my country was powerful?

[BrotherBuzz]

15. Methinks China is starting to trade our debt to Venezuela for oil

[jazzjunkysue]

19. Now, that would be pure poetry. Lol!

[joe_shmoe]

21. Please Sign this Petition: No War w/ Iran

An attack on Iran will be the collapse of the US.

First comes the oil embargo w/ the blocking of the Straight of Hormuz, then comes the crash of the stock market, then comes the run on the dollar.


http://www.petitiononline.com/n0war1rn/petition.html

[InkAddict]

23. Seeking Rick's Cafe American NOW!

Travel papers at any price, anyone?

http://www.cnn.com/2004/WORLD/europe/05/06/casablanca.ricks/index.html

Here:

http://www.usualsuspectscasablanca.com/index_single.asp?art=95