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The Spectacle Blog
Over on the main site, Ralph Reiland explains how soaring gas prices will silence the buzz around President Obama’s payroll tax holiday.
That’s true… and this is part of the reason why the Obama administration is increasingly concerned with the possibility of economic crisis, provoked by Iran, heading into election season. Mounting tensions with the Islamic Republic are already driving gas prices toward $4 a gallon at the pump. Taken in context of the delicate economic recovery, a global shortfall of 500,000 barrels a day — if Iran is excluded from the market — or some 10 million barrels per day — if Iran shuts down the Strait of Hormuz — spells a potential energy calamity for Obama’s White House.
All this, as Israel’s prime minister, Benjamin Netanyahu, prepares to visit Washington next week, to press Obama on military intervention against Iran.
As we’ve learned, senior Israeli officials believe IDF must take preventive action by summertime to effectively disrupt Iran’s nuclear program. For its part, the White House is apprehensive that an Israeli attack will spike oil prices, and enmesh the United States in a regional crisis months before the presidential election.
Four days before Bibi’s arrival, Air Force Chief of Staff, General Norton Schwartz, told reporters that the Joint Chiefs have briefed the president on various contingency options to hit Iran’s nuclear sites, in solemn partnership with our Israeli allies.
Ultimately, this crisis becomes catastrophe based on a single variable: whether or not Iran decides to close the Strait of Hormuz. Such a move would immediately cut off 10 million of the 17 million barrels of tanker-borne oil that pass through this critical choke point each day. Although pipelines that circumvent the Strait could carry the additional 7 million gallons, Iran’s deployment of littoral warfare capabilities (including mines, antiship missiles, and surface to air missile) could potentially double the price per barrel of Brent crude in the international market. Regardless of where America’s getting her oil, in a global commodities market, nothing “that happens in the Gulf, stays in the Gulf” and we’d feel the pain along with the rest of the world. Imagine the impact in Europe — not to mention debt-laden Greece, which gets 14% of her oil from her friends in Tehran…
Such action would also constitute an act of war — and would undoubtedly prompt an appropriate response, while imposing severe economic and military costs on both the United States and Iran. But before we “cry havoc,” it’s important to recognize that closing the Strait would amount to financial suicide for an Iranian economy staggered by sanctions — and disinclined to alienate itself from vital consumers such as India and China.
As such, it’s unlikely that a rapid Israeli attack would prompt a prolonged closure of the Strait of Hormuz, but even the briefest lock-out of the international petroleum market could trigger a full-fledged American response. Not to mention a swift and severe escalation of hostilities.
Whether or not Israel decides a preventive strike is in its own best interest, or Iran elects to shutter the Strait, this uncertainty will continue to cost us at the pump. We’ll wait to hear what Netanyahu and Obama have to say this coming week at the annual AIPAC convention, but, in the meantime, might I suggest filling ‘er up before the market spooks again?
View all comments (11) | Leave a comment
More Blog Posts by Reid Smith
http://spectator.org/blog/2012/03/01/about-those-gas-prices
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Bill| 3.1.12 @ 3:18PM
Get rid off Obama!
RJ| 3.1.12 @ 3:32PM
In California, we are already at about $4.40 a gallon and going up. More importantly, the Iranian situation looks like the biggest foreign crisis that America has faced in many years and we may well be dragged into it regardless of what the American government or the public wants. I am afraid that we are facing some very stormy weather ahead and I have no confidence in the Obama's administration to handle it well.
bahmi| 3.1.12 @ 6:12PM
We are the movers behind the Iran situation. We want to invade and bring our gifts to them. To say this potential conflict is originating elsewhere is blatantly pathetic.
RJ| 3.1.12 @ 6:47PM
Near the end of the Shah's reign (and I have never run across a single Iranian, or as they said in those days, Persian, who liked him), many of the college Iranian students in Southern California went to Beverly Hills, where the Shah's sister lived, to stage a protest. It turned into a riot and cars were set on fire. Later, when the US Embassy was seized by Iranians and the staff kidnapped, the Iranian students decided to show their support by staging another protest in Beverly Hills. I will never forget the look of total shock when they came back to campus, unbelieving that Americans would show up and counter-protest them.
More recently, my Iranian friends have made the point, without any prompting, that they are embarrassed that their government has a long history of international terrorism. They hate their government and the Arab states view Iran as an enemy. To say the problems in Iran stem from the United States lacks any credibility.
C Bowen | 3.1.12 @ 4:05PM
Mr. Smith;
Gas is going up because Mad Money Bernanke has been printing dollars at an astonishing clip funding a recovery in time for a re-election, but coupled with severe inflation. Getting all excited about Iran is a distraction for the masses to consume--but the situation has little to do with the price of gas at the moment.
Andrew Keirns| 3.1.12 @ 4:08PM
Iran won't close the Straits unless and until they are prepared to put a significant hit upon Israel . I think that is what Bibi is going to talk about first.
Occam's Tool| 3.1.12 @ 4:45PM
That's why Iran's military and atomic capabilities need to be wiped off the planet.
C Bowen | 3.1.12 @ 5:01PM
Occam,
You didn't post what you really think, so I will post it for you:
"They should be suffering and inconvenienced---not us. Without pity, remorse, or mercy. At minimal cost in American dollars and lives. Leave them poisoned, deformed, crying, and broken in spirit, soul, and mind. Make their survivors build the Mexican wall for us, without pay, under the lash. Let their future be a boot crashing down on a human face, forever."
6/18/11 Occam's Tool
http://spectator.org/blog/2011.....tcontainer
Clint| 3.1.12 @ 5:49PM
So Why Hasn't Screwball Maniac Israel Firster Smear Bund Neo-Chickenhawk Coatholder Coward,Tool Job's Mancrush Roughy Puff Bibi Attacked Iran.
" So why are Israelis talking about a potential attack on Iran’s nuclear facilities? Because that’s a good way – indeed, the only way Israel has – to pressure Western countries to work harder on the issue, to increase sanctions and diplomatic efforts. If policymakers believe that somehow pushing Tehran into slowing down or stopping its drive toward nuclear weapons is the only alternative to war, that greatly concentrates their minds."
The Tea Party Rebellion Heads To A Brokered Convention.
Screwtape| 3.1.12 @ 5:04PM
Easier said than done, tool boy. Iran's weapons are hidden deep beneath the earth and no one but they know where they are. They have learned from America's last two invasions, which featured boots on the ground. It would take lots of boots on the ground to hunt them out. A decade of hand to hand combat. Are you going to be first to volunteer and volunteer for a tax increase to pay for the next war? Yeah, didn't think so.
cass | 3.5.12 @ 12:19AM
Maybe the petition/boycott scheduled for May 1st will help bring cost of gas down.
http://www.change.org/petitions/2-99-gas