By on September 8, 2008

If you believe Iran will abandon its nuclear ambitions in the face of economic sanctions, there’s nothing to see here. If you believe there’s no way deny Iran The Bomb short of a military strike, the question becomes who and when? It’s hardly likely the Bush administration will want to engage in yet another military “adventure” before the next guy to accompany the football takes office. On the other hand, Bernard Baumohl thinks the Israelis want to get this thing done before Barack or John assumes the position (so to speak). ABC News reports that the Economic Outlook Group’s Chief Global Economist says a strike would disrupt oil prices (surprise!), one way or another. “It all depends on the success of the Israeli strike. If it was a quick, successful strike and Iran doesn’t block the Strait of Hormuz — a key oil route in the Persian Gulf — Baumohl sees a quick spike in oil prices and then a steady decline. He says that within three days of the strike oil could costs $175 to $225 a barrel. The record of $147.27 a barrel was reached back in July and oil today closed at less than $108. But within three months the price would fall because Iran’s nuclear weapons program would be destroyed or crippled. Oil would cost $70 to $85 a barrel. Of course, Baumohl has a more-dire scenario with oil prices between $200 and $300 a barrel. This happens if the strike fails, triggers a bigger war and the flow of oil is disrupted. In that case, the price of gas in America would climb to $5 to $7 a gallon.”

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35 Comments on “Israeli Strike on Iran Could Hike Gas to $7 a Gallon...”


  • avatar
    montgomery burns

    “But within three months the price would fall because Iran’s nuclear weapons program would be destroyed or crippled. Oil would cost $70 to $85 a barrel.”

    That’s a whole lot of wishful thinking there.
    Maybe someday this country will rethink its blind ‘Israel right or wrong’ policy. We’ve done everything we could have done to get Iran in a more powerful position in the ME, that’s a big reason to not vote for more of the same.

  • avatar
    Robstar

    I highly doubt oil would hit $175-$225. Even with TONS of speculation we only got to $150….which pushed gas here (Chicago) to just under $5/gallon at the most expensive stations.

  • avatar
    SherbornSean

    Long term, the price of a commodity is determined by supply and demand. Short term, the price is determined by expectations of supply and demand.

    Even if the Straight could be successfully blocked by Iran, oil would still find its way to its users, just as cocaine finds its way to addicts.

    A country that launched a full scale war in search of nonexistant WMDs can’t really criticize Israel for protecting itself from mad men who have repeatedly stated their intentions to attain nuclear weapons and to use them to destroy Israel.

  • avatar

    Maybe someday this country will rethink its blind ‘Israel right or wrong’ policy

    Don’t we wish. But don’t count on it.

    John

  • avatar
    ppellico

    There is no telling what the price of oil will be in this world of speculation.
    It went from the 80 to 130 without such an event.
    But it will go back and for this…

    There’s a hell of a lot of oil around.

    The real push to good MPG cars has begun and its not likely to ever go back.

    Iran cannot fight anybody with anything.
    No matter how they talk, they have less than even Iraq before the invasion.
    A war here would really be THE shortest on record.
    Um, but so was the last one sold.

    Iran has a good reason to feel in danger. Right now they find themselves suddenly surrounded.

    This all very sad as I know so many Iranians.
    All very educated and non-violent.
    Sweet Persians with noithing but GOOD to say about America.
    This is another real life example how a people can be overtaken and controlled by fear.
    If you wonder how many Germans felt in 1935, here it is all over again.

  • avatar
    mel23

    Maybe someday this country will rethink its blind ‘Israel right or wrong’ policy.

    This would make a huge difference, but the US Congress is in the bag, so I’m not holding my breath. More likely is that we’ll continue on the current policy destructive to all parties until we’re too weak to be an influence.

  • avatar
    KixStart

    I’d just as soon Iran didn’t have a nuclear weapon but such a strike raises a lot of questions…

    How good are Iran’s air defenses? How many planes is Israel likely to lose? What are the chances of a successful kill?

    Even if it’s Israel that pulls the trigger… ummm… won’t they overfly Iraq? Since we control Iraq’s airspace, wouldn’t that make us unindicted co-conspirators?

    Ehud Olmert is facing indictment for something or other. Olmert has already agreed to resign, as soon as the ruling party can elect a new leader. That will be no later than Sept 25th. Having a very lame duck leader in office may reduce the likelihood of Israeli action. On the other hand, since Olmert is on the way out, he can order the strike and take any heat for the raid on his way out the door.

    I hope our President has thought this through. But, somehow, I doubt it.

    What happens to oil prices then depends on a couple things.

    What’s Iran’s share of world oil production? How badly do they need money coming in (pretty badly, I think, Iran’s economy is fairly poorly developed).

    Can Iran close the Straits of Hormuz? If they try, I expect we can only keep them open with attacks on Iranian soil. That’s full-tilt war.

    Their military is probably much better than Saddam’s (Saddam’s ability to build his military was hampered by 10 years of economic sanctions – not the case in Iran). They have veterans from the Iran-Iraq war. I have no doubt we can defeat Iran, militarily, but it may be significantly more difficult than defeating Iraq. One advantage we have is, we’re already nearby, we won’t need to use Saudi bases to get staged in over months.

    Then what? We can’t defeat Afghani insurgents, we can’t defeat Iraqi insurgents, we have problems in Pakistan. Iran’s population is much larger than Iraq or Afghanistan. The countryside seems to me more inhospitable than Iraq; greater home field advantage.

  • avatar
    Brian E

    Maybe someday this country will rethink its blind ‘Israel right or wrong’ policy.

    Our policy makes a lot more sense if Israel is an undeclared nuclear power with an interest in remaining the only one in the region. In that case our interest is in making sure that the Israelis never feel sufficiently threatened to start a war that has any chance of going nuclear. As a small state with a relatively weak conventional force, any war with Iran or another major power in the region has a nontrivial chance of escalating to that point. Thus, we (and the rest of the world) get dragged in to preventing that scenario.

    It’s not a good situation, but it’s a lot more plausible and less nefarious than the AIPAC influence scenario that everyone seems to believe.

    As for the price of oil, it’s being manipulated on the futures market anyway. War with Iran would provide more justification for this manipulation, even if there’s no fundamental reason for it to have as much impact as it does. It’s not like the Saudis will be crying if we go to war with Iran; they’re historical enemies.

    I fear more for the effect on the European economy. This distraction could allow Russia to further consolidate its hold on Europe’s energy supply.

  • avatar
    limmin

    Nuclear bomb technology is 60 years old. These bombs can be made at any location, even in a basement. Fact is, no airstrike is going to stop it.

    These Middle East nations WILL acquire the bomb eventually. They’ll probably just throw some cash at some rogue Russian nation and get a few bombs Fed-Ex’d to them. It’s that easy.

    But speaking objectively, why is it OK for Israel to have perhaps dozens of nukes but Iran or Iraq can’t have just one? I make no endorsements, I simply ask the question they’re asking.

    Regardless, 7 buck gas will kill our economy.

  • avatar
    Steven Lang

    Because Israel doesn’t support the very things that Iran does. Genocide, the targeting of Israel’s civilians (through their Hezbollah and Hamas proxies), killing and torturing Iranian citizens, and generally trying to enable these psychotic mullahs to reach their wonderful version of Judgement Day.

    If Iranian leaders weren’t making their proclamations of full-scale murder and were simply acting like any other thug styled government in the region, it wouldn’t matter. But they are and my only real hope is that the ‘people’ don’t suffer if it can be helped.

    As it stands right now, this hurts the entire Middle East to a fantastic degree. If Iran had done the same things to the Americans, or even the Europeans, this wouldn’t even be a discussion.

    A lot of our ME policy has to do with our actual access to our oil… and that’s the problem. If we can become increasingly energy independent, it gives help to our allies… not our enemies.

  • avatar
    mel23

    I don’t think there’s much doubt that Iran could block the Strait of Hormuz. From what I’ve read, getting a tanker through in the best case involves a lot of skill and care. A mortar attack on a tanker at the right time would tie things up for days at least. Given that about 30% of the world’s oil supply goes through there, all hell would break loose. But what tanker company would want to even risk one of their ships if things got dangerous.

    Seymour Hirsh has written that Cheney supports an attack, but thinks Bush won’t support it, so he (Cheney) has been encouraging Israel to do it between the election and Jan. 20. Nuts. Afghanistan is chaotic, Pakistan is heading toward chaos, and India seems to nuking up.

  • avatar
    mel23

    Because Israel doesn’t support the very things that Iran does. Genocide, the targeting of Israel’s civilians (through their Hezbollah and Hamas proxies), killing and torturing Iranian citizens

    Huh? Israel has and does target Palestinian civilians and did the same to civilians in Lebanon. Destroying over 18,000 Palestinian homes is not a military action.

    http://ifamericansknew.org/

  • avatar

    Back on topic gentlemen. Or at least somewhere in the same neighborhood. Please.

  • avatar
    Worm

    If an airstrike would magically lower oil to $70 a barrel, I think they would have done it long ago, nuclear program or no.

    I remember 20 years ago some other mid east country thinking they could cripple Iran with airstrikes. I wonder how that ever turned out for them…

  • avatar
    yankinwaoz

    My boss thinks that Bush will wait for the elections. If Oboma wins, then Bush will either attack Iran, or have Israel do it. That will trigger a mini war, which will allow Bush to envoke the clause in the War Powers Act to stay in power.

    He really hates Bush and doesn’t trust him to leave quietly.

  • avatar
    Steven Lang

    If Israel targeted Palestinian ‘civilians’ there wouldn’t BE any Palestinians in Gaza or the West Bank.

    and ‘If Americans Knew’ what it’s like to have missiles launched into their cities targeting nothing but civilians… and ‘If Americans Knew’ what it’s like to have a de-facto doomsday cult plotting their demise, bombing wouldn’t even be a question.

    The Russians already have the right idea… Israel and many Americans do too. As I said before, my only real concern is with the civilians involved… not the theocrats who deserve to be toe-tagged with 72 chickens in paradise.

    If the bombing happens, the spike will take place regardless. If Iran block the Strait of Hormuz you’ll have a delay that may push prices further. Either way it won’t be a big deal because Iran isn’t considered Arab at all (Persians consider themselves Aryans), and a lot of Sunnis consider Shiites to be heretics… which is sad for both sides of that discussion.

  • avatar
    crackers

    What the article does not address is the terrorist/guerrilla war Iran would initiate if an Israeli air strike was successful and the Straight of Hormuz remained open. Iran would start sabotaging oil choke points all over the world using their various proxies.

  • avatar
    menno

    Isn’t anyone recalling that Russia and Iran have signed a mutual defense pact? Just as NATO “if you attack any NATO country, you just attacked all NATO countries and we’ll all respond” so also Russia and Iran.

    Oh, sorry, that’s right. This kind of information is rarely in the lame-stream media in the western sillivization of America or Europe.

    Probably too scary for the populace.

    Wish I could find the link with the story.

    Doesn’t much matter. Just read Ezekiel Chapter 38 in the Bible.

    Go read it for yourself. Then feel free to thank God that you aren’t Russian, “Persian” (Iranian) or living in any of the shitty little hate filled states surrounding Israel, or living in Europe, for that matter. On the other hand, this guy’s interpretation calls Canada, Australia, NZ, and even the United States as the Little Lions – part of the attack against Israel in the last days. So nobody wins against their attack against Israel (and God). This, so the whole of the world knows that God is.

    http://www.clanrossi.com/Ezekiel%2038.htm

  • avatar
    Usta Bee

    Your sound bite of the day:

  • avatar
    Qwerty

    A simple strike of the sort that Israel could carry out would not be effective. The asset that Iran is developing that is valuable is not the machinery; it’s the knowledge of how to build the machinery.

    The only reason the surge in Iraq is “working” is the deal that was made with Sadr. Iran has laid the groundwork for retaliation in Iraq. If Iran is attacked then Iraq turns into a clusterfuck.

    Iran also has a good chance of sinking U.S. warships in the Gulf with anti-ship missiles.

  • avatar
    guyincognito

    @ RF,

    With this topic??? I’d say its been very civil. In any case its definetly worth discussing as this is a very real possibility.

    I fall in the camp of believing Isreal has no option but to do all it can to prevent Iran from acquiring Nuclear weapons. No question the fallout is going to be ugly.

  • avatar
    Stingray

    menno :
    Isn’t anyone recalling that Russia and Iran have signed a mutual defense pact? Just as NATO “if you attack any NATO country, you just attacked all NATO countries and we’ll all respond” so also Russia and Iran.

    You forgot to add also… Venezuela, your 4th largest oil supplier.

    So it’ll get real FUGLY if they get attacked.

    I don’t want that to happen, tt will fuck my country: economically and possibly militarily. We live from oil, also have a lot of business ties with that people.

  • avatar
    Stingray

    Robert Farago :
    Back on topic gentlemen. Or at least somewhere in the same neighborhood. Please.

    Excuse me, what did you expect? You have war, oil, Iran, Israel, gas prices all mixed together… all of them sensible matter. When you mix those ingredients… BOOM

    It’s mostly a “political” topic… at least I see it like that.

    As guyincognito said… it’s been very civil.

  • avatar
    AG

    It is without a doubt that any Israeli airstrike would require US approval. They would need to not only use US-controlled Iraq airspace, but they would probably need to refuel en route. That 1981 airstrike on Iraq’s reactor required them to top up their tanks on the runway they were so tight for fuel.

    I wouldn’t be suprised if the Iranians were constantly adding more layers to their nuclear sites bunkers as we speak. I’m not even sure the Israelis have anything that can penetrate them.

    They would probably concentrate their firepower on the centerfuges, located way out in the open desert. At least that would minimize casualties.

    As an Iranian, I wouldn’t be suprised if the Iraians were doing this out of their belief they are a first world country and should have all the technology of one. From space industry to stealth aircraft, they want what we have.

    And please, stop it with the “Ahmadenejad is a madman.” The man is a clown in a Members Only jacket who couldn’t bend over and tie his shoes without Khamenaei’s permission.

  • avatar
    KixStart

    AG: “I wouldn’t be suprised if the Iranians were constantly adding more layers to their nuclear sites bunkers as we speak. I’m not even sure the Israelis have anything that can penetrate them.”

    Well, yes, they probably do. But that would be really messy.

    qwerty: “A simple strike of the sort that Israel could carry out would not be effective. The asset that Iran is developing that is valuable is not the machinery; it’s the knowledge of how to build the machinery.”

    Which suggests a two-pronged approach: a bombing and a wave of assassinations. How good is Israel’s intel inside Iran?

  • avatar
    findude

    The Iran/Israel potential debacle is just one factor in a whole constellation of realities that work together to ensure volatility in oil pricing. Oil will always go up and down in price, as will demand. Speculation will sometimes play a role, as will currency fluctuations. Peak oil looms on the horizon, etc. etc. The future is volatility. That is the real reason to favor the most economical sporty car you can buy.

  • avatar
    whatdoiknow1

    The only thing Isreal would accomplish by attacking Iran is creating a problem that is too big for Isreal to solve on it own.

    An airstirke on Iran by Isreal would NOT end there it would mean WAR between these two countries which would end up involving the better part of the entire middle-east.

    The only FOOLS that think this course of action has any chance of success are the same dummies that thought invading Iraq was going to be a cakewalk.

    If Isreal and Iran were to go to war IRAQ will be the main battlefield with those 100,000 US soldiers, countless contactors, and the millions of Iraqi civilians in the middle of the mess.

    DO NOT underestimate Iran! They might not be as powerful as the USA or Isreal in terms of military technology but they do know how to fight and this IS their home turf. In other words Iran with or without Nukes has the ability to do an enormous amount of damage to the region, oil production, and the billions of dollars in infrstructure that WE (the American Taxpayer) have already paid for.

    So if America is having a hard time dealing with the lose of about 4000+ troops in 6 years how do you think the country will react if the US were to see 2000 to 4000 casualties with a week or two?

    The truth of the matter is no one can successfully perdict what the outcome of a WAR (intiated by Isreal) in the middle east would be. It is a given that if Iran is attacked they will retalite against US forces in the region. So an Isreal strike against Iran would open up a war for us. Now how would the rest of the Arab world respond to a joint US/ Isreali military action in the middle-east that will undoubtedly kill many, many Muslims Shite or Sunni?

  • avatar
    whatdoiknow1

    When you really have a good look at the geopoliticial situation it become apparent that Iran is actaully holding far more (and better) cards than many give them credit for here.

    A severely damaged or defeated Iran would leave an vast power vacumm in the middle-east that Russia, China, and Indian can NOT allow to happen for their own national interst. This poses a very big problem with a standing USA army already deployed in the region.

    With that said Iran has a big incentive to “push the issue” if they are attacked. The more chaos in the M.E. the better for them and the worse for the USA. Right now I am sure that the Iranians are selling this point of view to the other world powers and when you consider the facts the Chinese and Russians have every reason to prop up and support the Iranians for as long as necessary (until the US civilain population crys uncle).
    Going to war with Iran would mean one of either two things; mass killings on our part to decide the issue quickly (which would not go well on the world stage) or a drawn out war of attrition that drain what little bit of treasure the US has left in the bank, not including lives (soldiers that will need to acquired somehow, draft maybe???)
    Remember Isreal’s goal might be to eliminate a nuclear threat but the Iran’s goal will be to drag the region into the turmoil that it will blame on the the USA and Isreal.
    The Isrealis and their US supporters appear to be looking for success on the battlefield but the Iranians know that their real weapon will be “economic chaos” that will hurt our daily lives and bank accounts.

    So when I see folks here make silly, simplistic claims that Isreal should move quickly and get it over with I have to say, Put down your G.I.Joes and pick up a good read on world politics.

  • avatar
    folkdancer

    Wouldn’t it be wonderful if we could have a world without religion.

  • avatar
    geeber

    folkdancer: Wouldn’t it be wonderful if we could have a world without religion.

    Both sides may use religion to justify their cause, but they would still be fighting over the land even if they were both atheists. The root cause is two groups that want to occupy the same plot of land, and neither one wants to be ruled over by the other.

  • avatar
    Michael Ayoub

    They should just instance the area.

    Sorry… bad joke.

  • avatar
    folkdancer

    Both sides may use religion to justify their cause, but they would still be fighting over the land even if they were both atheists. The root cause is two groups that want to occupy the same plot of land, and neither one wants to be ruled over by the other.

    But if they were all atheist how would they distinguish between each other? By their football jerseys or by whether they were Ford or Chevy owners?

    We men are so stupid we could probably start a nuclear war over who had the best tennis racket so I guess we have to expect men to fight over who has the best imaginary friend as the comedian Carlin said.

  • avatar
    jkross22

    RF,

    Considering the topic, this thread is amazingly free of nutjob and wingnut comments.

    Perhaps this is where McCain and Obama agree the most – we should get ourselves off the foreign oil asap. The sooner we stop paying those that loathe us, the better.

  • avatar
    RedStapler

    Reading all the comments on this make me hope the day comes soon(er) that we can all drive around in our Plug-in 80mpg cars and the transportation sector runs off of algae based bio-diesel. We would have some version of energy independence.

    The crappy governance and wars of the middle east would get the same mehpage 3 treatment that Africa now receives.

  • avatar
    jkross22

    @ whatdoiknow:

    Iran appears to be a somewhat rational player, meaning they respond to incentives and punishment the way any other nation might. The hate speech of their leader has not been seriously challenged, and that has caused the fear most have of what he and the mullahs want to do.

    The problem is that there is little direct action we can take to limit Iran’s nuclear expansion without causing a broader conflict. There are some indirect actions that might be used, though.

    With Russia’s actions in Georgia, it would seem that the Russians would not want us, the Europeans or Israelis to arm the Georgians with advanced weapons to fight them with. Perhaps this can be used to help convince the Russians to end their support of Iran’s nuclear program.

    Would have to wonder, though, what the reaction would be if the Russians destroy the Georgian pipeline and what it would to oil prices.

    Where’s the Goracle with our solution, dammit?


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