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

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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.

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THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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