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Iran vs. U.S.: What About the Oil?

Ayatollah Ali Khamenei, Iran's supreme leader, has now warned that should the U.S. attack, Iran will strike U.S. interests around the world. In that case, what would happen to Middle Eastern oil, which flows through the Iranian-controlled Straits of Hormuz on its way out of the Persian Gulf, into the Arabian Sea, and on to world markets?

Iran might shut down the Straits of Hormuz, through which 20 percnt of Middle Eastern oil flows. Or, on the other hand, because it is so dependent on oil revenue, it might not. Nobody knows.

Beginning a year ago, Japanese oil refineries, which obtain 14 percent of their supply from Iran, began to diversify to Saudi and Kuwait crude. Japan must import literally all its oil and gas from abroad and Iran is the third largest supplier. Iran is the fourth largest supplier of oil to South Korea. China buys substantial and growing amounts of oil from Ira. Most Iranian oil exports go to Asia, followed by Europe, where major purchasers include Italy, Turkey, and France.

"When Bush announced that he would fill our Strategic Petroleum Reserve last spring and also expand it, crude prices went up by $1.50 in just 20 minutes because of speculation that the U.S. might attack Iran. If the US attacks and oil prices rise, Bush would likely release oil from the SPR to soften the blow to the oil markets," Matt Piotrowski, an oil market analyst at the Oil Daily, told Mother Jones.

Posted by James Ridgeway on 02/08/07 at 12:34 PM | E-mail | Print | Digg | de.licio.us | Reddit | Newsvine | Yahoo! MyWeb | StumbleUpon | Netscape | Google |



Comments

The premise(of the need for war with Iran) is that the Iranians do not act rationally and that is why it is believed they would and could easily shut off 20% of the supply as well as take out the Gulf states production(e.g. Saudi Arabia) where the Shiites live and work. As for the U.S. reserves, they are in salt mines and they would be pumped out too slow to have much of an affect. It is easier to put the crude in than to pump it out. In addition, our port facilities could not export enough(the port facilities are set up for imports, not exports). War with Iran, is not like Iraq. In America we have close to 1/2 million nationalistic Iranians, more than the number of Japanese during 1941. The economic cost of the war is too much for America,Europe, and Asia when you consider that it only benefits Israel and their Zionist interests. If you think the world hates us now, if America hurts the world's economies, then our children would pay a big price.

Posted by: Dr. Quigley on 02/09/07 at 7:10 AM

>If you think the world hates us now, if America hurts the world's economies, then our children would pay a big price.

Like they're not going to already?

And when has the premise that America behaves rationally suddenly become part of the picture?

Posted by: you on 02/09/07 at 11:21 PM

Mr.Ridgeway and Dr. Quigley are making very good pointsand we should pay attention! Dr., you make another point of the children paying the price. Just look at the children in Iraq, how dearly they pay. What future do they face? We should pay attention to the warnings comming from the other super powers! They still have a lot of ICBMs pointed at us!

Posted by: Ranselar VanDerpoel on 02/11/07 at 8:20 AM

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This article has been made possible by the Foundation for National Progress, the Investigative Fund of Mother Jones, and gifts from generous readers like you.

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