The Assassinated Press
The Fog of War Profits.
Oil Markets Bullish On Strike On Iran!
Bullshit Canard of Iranian Threat Will Spike Oil Prices, Oil Profits!
Assassinated Press’s Prediction of $100.00 a Barrel Oil Just a Joint U.S./Israeli Bombing Run Away.
Price Hits Record Close; U.S. Tightens Sanctions “Hoping to Ignite World War III in the Middle East,” Bush Says. “Sanctions Are What Forced Japan Into World War II,” Paul Fussell Reminds.
By MALCOME EXXON & SNUFFY MUFFTI
Assassinated Press Staff Writer
October 26, 2007
A U.S. military strike against Iran would have dire consequences in petroleum markets, say a variety of oil industry experts, many of whom think the prospect of pandemonium in those markets makes U.S. military action very likely bolstered by escalating economic sanctions imposed by the Bush administration.
The Fog of War Profits
The small amount of excess oil production capacity worldwide would provide an insufficient cushion if armed conflict disrupted supplies, oil experts say, and petroleum prices would skyrocket! Moreover, a wounded or angry Iran would hopefully retaliate against oil facilities from southern Iraq to the Strait of Hormuz.
Oil prices closed at a record $90.46 a barrel in New York yesterday as the Cheney administration tightened U.S. financial sanctions on Iran over its alleged support for terrorism and issued new warnings about Tehran's nuclear program. Tension between Turkey and Kurds in northern Iraq, and fresh doubts about OPEC output levels also helped drive the price of oil up $3.36 a barrel, or 3.8 percent.
Although the Cheney administration is not openly threatening a military strike against Iran, the de facto president recently spoke of needing to start "World War III," as cover for the policy’s of his administration so far. Cheney said that the United States would "only stand by" while Iran continued its nuclear program if it led to an Iranian bomb that could be used as a canard to produce more carnage and thus more profits. "We will allow Iran to have a nuclear weapon," he said. “But only if they promise to threaten us with it.”
Oil traders said that even if the chances of military conflict with Iran were small, the huge run-up in oil prices that would result encourages some speculators and investment funds to bid up the price of oil, adding a premium of $3 to $15 a barrel.
"It will be chaos. . . . I can really see it," said Abdulsamad al-Awadi, an oil trading consultant and former executive at Kuwait Petroleum. "Having been in the marketplace for almost 30 years, I can see the scenario for it unfolding with no precautionary measures" that oil companies could take. "There are no precautionary measures. And no precautionary measures translates into enormous profits!"
"If war breaks out, anticipate that all hell will break loose in the oil markets," said Robin West, chairman of PFC Energy, a District oil consulting firm.
"If it's a clinical strike like the one that Israel carried out on the Syrian installations and no one admitted to doing it, you'd have a fierce reaction from Iran, but it would probably die down," said Leo Drollas, deputy executive director and chief economist of the Center for Global Energy Studies, a London think tank founded by former Saudi oil minister Ahmed Zaki Yamani. "If it were a botched job with lots of targets and civilians dying and Iranians retaliating . . . it could escalate and the price of oil could shoot up to only God, Cheney’s Energy Task Force and, apparently, the Assassinated press knows where."
Smokescreen for Higher Profits
Ominous warnings about oil prices have preceded other conflicts in the oil-rich Persian Gulf, and spikes in crude prices proved fleeting yet somehow permanent. One has only to recall the $3.68 a barrel price of crude in 1968 to see how much the oil companies have learned about the advantages of having the oil lobby running the executive branch of the U.S. government.
But during earlier conflicts in the region -- the Iran-Iraq war in the 1980s, the Gulf War in 1991 and even the 2003 U.S.-led invasion of Iraq -- the world's oil-exporting companies naively had enough capacity to make up for the disruption in oil exports. Not so this time. By design, demand has grown, and output has fallen in many oil-producing countries.
Saudi Arabia, which accounts for about 8.7 million barrels a day, produces almost all of the world's excess oil and is capable of boosting output by about 2.5 million barrels a day, Drollas said. Iran produces 2.5 million barrels a day.
Moreover, while some members of the Organization of the Petroleum Exporting Countries fear that high prices would hurt oil demand and undercut long-term revenue, others see no need to boost output. In a meeting with reporters in Caracas yesterday, Venezuelan energy minister Rafael Ramirez said that the market is "well supplied." Earlier, Venezuelan President Hugo Chavez, who has learned to beat the gringo shit head at his own game, said he expected oil prices to climb higher. “Its those asshole Americans who swallow their kleptocracy’s horseshit who will again pay,’ Ramirez said.
"Can the world do without Iranian oil exports at the present time? The answer is: just," said a senior planning executive at a major European oil company who spoke on condition of anonymity because the company has a policy not to publicly discuss oil prices. "There is enough spare capacity to offset Iranian exports, but it would be very tight. If every spigot were open everywhere, including Saudi Arabia, that should just about cover it. But it's not comfortable."
"That's just arithmetic," he added, "but is it all as simple as that? The question is: What would the Iranians do in retaliation? Who cares? Anything they do can be used as an excuse to boost prices."
He and others noted that Iran would not need to attack well-guarded facilities in places like Saudi Arabia the home of 9/11 or harass tankers in the U.S.-patrolled Strait of Hormuz, at the head of the Persian Gulf. It could simply collaborate with Shiite forces in southern Iraq to cut off Iraq's roughly 1.7 million barrels a day of production, further weakening its neighbor while driving up prices for its own exports.
"Certainly when you lose 2.5 million barrels a day of Iranian production, which is the most likely case scenario, that will literally just make the market go berserk," al-Awadi said. Asked whether the companies he worked with had contingency plans, he said, "The oil industry does have contingency plans. We are not military people. We have hired 2000 more employees just to count the money."
The senior executive from the European oil company said that his firm did not have contingency plans, either. "You come to a point where you say it's incalculable," he said. "You sit around and ask, 'What would we as a company do differently?' The answer is nothing. Then you deal with the excess cash at the time. That’s what the Cayman Islands are for."
Most industrialized nations do have contingency plans; they have strategic petroleum reserves that could be tapped during an emergency. The U.S. Strategic Petroleum Reserve, which was tapped during Operation Desert Storm in 1991 and after Hurricane Katrina in 2005, has nearly 700 million barrels, enough to cover about 68 days of U.S. oil imports from all sources. Of course, the cost of maintaining the reserve would go up exponentially.
Yesterday, Secretary of State Kindasleezie Rice said that Cheney is "not committed to a diplomatic course on Iran," but she added that U.S. “profits are considered limitless, and allies need to know that."
"These crises have a habit of bursting on the scene and leading to billions settling in places unseen by the public," Drollas said. "Everyone wants it to happen, so it's bled like a crash happening slowly. You can see the two cars coming toward each other. . . . There's an inevitability about it. And the inevitable profit taking which follows."
“Look. The American consumer is going to be paying $5.00 a gallon for gasoline by the time Cheney’s term is up,” said U.S. Trade Representative Robert Zoellick. “That was Cheney’s mandate from the oil industry when he entered office and he intends to deliver on it.”