Iran's Oil Card

Iran's Oil Card. As expected, Iran is starting to brandish
the oil trump card. Given the loss of much of Iraq's production and the
rapid rise in Chinese imports, any conflict with Iran that results in
even a moderate reduction in its exports would drive oil to $80 plus.
The recent run-up in the oil market, due to an influx of speculative
hedge fund money, is a bet on this eventuality. Worse than just higher
prices, this would like result in a shortage of oil, particularly in
countries that don't have special agreements with producers. If you
were speculating as to why China and India have been so quick to cut
deals with autocratic energy producers (Iran, Sudan, Venezuela, and
Russia), this is the answer. [John Robb's Weblog]

Categorized as News

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