February 20, 2012
Iran Sanctions Push Oil Prices Into Recession Territory
IAEA inspectors are back in Tehran for talks about Iran's nuclear program. The outcome will not really matter. The U.S., and the people who pull its strings, is not aiming for an Iran that has no nuclear capabilities but for an Iran that does what it says, especially with regards to Israel. To achieve that necessitates regime destruction by force.
The sanctions on Iranian oil and financial transfers by the U.S. and the EU stooges are preparations for that. The hope is that they will provoke Iran to attack first or to at least make Gulf of Tonkin like incident, probably involving the 40 year old USS Ponce, plausible.
But the sanctions create a big problem. They will tank the world economy. Back in December I wrote how the Iran sanctions will become a "self-inflicted wound":
Those western countries that will move away from Iranian oil will have to pay higher prices as the possible sources for their purchase will be reduced. This will put more pressure on their economies none of which are in good shape. With less flexibility will also come a higher risk should some event, like an explosion at Saudi facilities, reduce the production available to them.
In total the markets will be more nervous and the risk premium included in oil prices will go up. Iran and the other Persian Gulf countries will make more money. Everyone else will have to pay more for oil with the price increase for the west likely much higher than for the east.
In January I followed up on that:
Since then the price of oil has increased from some $104 per barrel Brent crude to $113/bbl today. Considering that in 2006, with most economies humming, Brent was around $70 and that unlike then major economies are now still in recession the price hike is enormous. Iran is clearly showing that it too can play the economic sanctions game. Since mid December it increased its oil export income by $22.5 million per day which further damages "western" economies.
More sanctions may well come. But they will hurt western economies more than Iran. They will be responded to by Iran tit for tat with ever increasing oil prices. Iran has already announced more maritime maneuvers in the Strait of Hormuz. When those and the accompanying propaganda have passed the price of Brent crude may well be at $120/bbl and the U.S. economy on its way into another downturn.
Just one month later we are there.
The EU decided that it will stop oil import from Iran by July 1. Iran responded yesterday by stopping oil sales to Britain and French. As those sales are minimal the stop is only significant as a sign of seriousness from Iran to its south European customers who have been told to either commit to long term oil purchase agreements with Iran by March 21, thereby breaking the EU sanctions, or to be cut off by then. For the bancrupt Greece, Italy and Spain, which each import significant amounts from Iran, that would create great problems.
When the EU announced its decision to stop imports from Iran the propaganda claimed that the Saudis would make up for any lack of crude oil and somehow hold oil at $100 per barrel. That was some wishful thinking:
Saudi Arabia, OPEC’s largest crude producer, reduced oil output and exports in December from November when it produced the most in more than 30 years, according to the Joint Organization Data Initiative.
The figures Saudi Arabia’s government submitted to JODI for December’s crude oil output were close to those estimated by the International Energy Agency. The IEA said in its January monthly report that Saudi output was pegged at 9.85 million barrels a day. The IEA estimated January’s output for Saudi Arabia to be the same as December’s. The Paris-based agency estimated Saudi Arabia’s spare capacity for December at 2.15 million barrels a day, which makes about 75 percent of OPEC’s effective spare capacity during the month.
There are doubts over the extend to which this Saudi "spare capacity" really exists. Sure the Saudis have some old wells they could probably restart but those do not produce light sweet crude but rather nasty stuff that is difficult to refine. Another question is how long that spare capacity brought into production would be sustainable.
The oil traders know that these questions exist:
Oil prices jumped to nearly 105 dollars a barrel - a nine-month high - in Asia today, after Iran said it halted crude exports to Britain and France in a dispute over its nuclear programme.
Benchmark crude was up 1.75 to 104.99 dollars a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Earlier in the day it rose to 105.21, the highest since May. The contract rose 93 cents to settle at 103.24 a barrel in New York on Friday.
Brent crude was up 1.52 at 121.10 dollars a barrel in London.
Note that the benchmark WTI price of $105, which is set at the pipeline hub in Cushings Oklahoma, is currently distorted. Cushings is oversupplied and lacks pipelines that could transport the oil from the U.S. midwest to the coasts. The Brent crude price is therefore what sets the consumer price for gasoline in large parts of the U.S. as well as in Europe.
Brent at $120 a barrel is global recession territory. The Chinese, who just renewed their long term contract with Iran, will likely get their oil cheaper than that.
So we are right there where I predicted sanctions would lead.
Sanctions increase oil prices and the west screws itself over with them by pushing itself back into a deep recession. A war with Iran would make the situation even worse. That is likely why the U.S. as well as the UK are telling Israel to hold still and to not plan some mischievous stunt.
As with Syria the west, mainly Obama, has painted itself into a corner. What is the way out?
Orders could go to the IAEA to exculpate Iran's nuclear program and to declare that everything looks solvable and fine. Negotiations could be held, probably with the help of the Chinese, and the threat of "all options are on the table" and regime change could be withdrawn. In a tit for tat Iran would agree to stop the 20% enrichment for the Tehran Research Reactor at a certain amount like two reload charges and some sanctions would be removed. An agreement to implement the IAEA's additional protocol in Iran would be the next step with more sanctions removed. An "clean" label from the IAEA would follow, all sanctions would be removed and normal relations with Iran would be restored.
But the chances that Obama will be willing and/or able to go that way seem very small to me. So what will it be? An illegal war of aggression against Iran and a huge recession? No war, sanctions and a recession? No sanctions and peace in our time?
Your guess is a good as mine. Whatever it may be, unlike the west, Iran is prepared for the worst.
Posted by b on February 20, 2012 at 09:05 AM | Permalink
listening to Bloomberg news this morning I heard the talking head say that the IAEA was going to Iran with hopes of a break through in negotiations. It does seem as Obama/Clinton have bitten off more than they can chew and are looking for a way out.
but the drums of war keep beating for Syria. Perhaps this was the goal all along....make it seem as if Iran is the bogeyman and then pick off the smaller countries one at a time.
remember, 7 countries in 5 years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, Iran
Posted by: dan of steele | Feb 20, 2012 9:32:57 AM | 1
b, i just finished watching your link to real news and wilkerson "paints itself into a corner" re iran from your syria post.
the escalation is so fast i can't keep up. it's hideous. thanks for all the work you're doing keeping us informed. much appreciated.
Posted by: annie | Feb 20, 2012 9:33:20 AM | 2
The sanctions are a ruse...a token, to make it appear in the court of world public opinion, as if it matters any longer, that the West has given Iran every chance, but Iran would not be persuaded. That means that the sanction part of this campaign to fail Iran is not meant to last any time at all. The West isn't going to take on higher oil prices without attaining the prize that is at the center of those high oil prices. I expect the attack phase to be instituted by April or May. It will guarantee Obama a second term. Oil Insiders who fix the price are foaming at the mouth and are ready to place their orders they never take possession of, and drive the price up precipitously. Europe will go up in flames. The people of Greece, Italy, Portugal and Spain will revolt, and Germany will be seen as the enemy once again. Alliances will be formed along those limes and ultimately Europe will go to war, and Germany will be reduced to ashes.
Posted by: Morocco Bama | Feb 20, 2012 9:44:26 AM | 3
Negotiations could be held, probably with the help of the Chinese, and the threat of "all options are on the table" could be withdrawn. In a tit for tat Iran would agree to stop the 20% enrichment for the Tehran Research Reactor at a certain amount like two reload charges and some sanctions would be removed. An agreement to implement the additional protocol in Iran would be the next step with more sanctions removed. An "clean" label from the IAEA would follow, all sanctions would be removed and normal relations with Iran would be restored.
Can you imagine Netanyahu's reaction to this? Sanctions with Iran stopped, military option off the table, IAEA giving Iran's nuke program a clean label. It would certainly put him in his place. But doubt Obama would do it in an election year. However America is losing big in this confrontation. Europe has always been wobbly on an Iran war (will be moreso when Sarkozy gets the boot in a few weeks). The rest of the Asian landmass is ignoring American sanctions with impunity. High oil prices are draining any recovery.
I predict that Obama doesn't have the balls to make peace with Iran before Nov but also won't go to war. So in that space between No Peace and No War you will have a damaging "No War, but sanctions and a recession". Hopefully the EU will see that it can't economically keep that position. On the bright side if the EU does keep that position it makes Revolutions in Greece, Spain and Italy more likely.
Posted by: Colm O' Toole | Feb 20, 2012 9:46:10 AM | 4
Thanks b, good rundown on likely scenarios. Whatever happens, rest assured, the only people harmed will be the peons of the world. The disaster capitalists will make money in any economy, and the workers of the world will foot the bill with declining lifestyles.
Posted by: ben | Feb 20, 2012 9:51:36 AM | 5
This is such a good thread!
Posted by: Jake | Feb 20, 2012 10:22:24 AM | 6
Congratulations This is one site/blog which I regard as essential reading
Prof Cole says much the same thing as you roday re the failure of the embargo
The US and its lackeys have as you say painted theselves into a nasty spot
Russia/China/ India and the smaller Asian states will have no part of it.
Keep up your great work
Love your stuff !
Posted by: Tom Payne | Feb 20, 2012 10:34:42 AM | 7
Colm O' Toole @4: Yes, I can imagine Netanyahu's reaction--another pogrom in the WB and Gaza, and maybe much worse.
Posted by: JohnH | Feb 20, 2012 11:35:29 AM | 8
Hadn't seen this piece before but it rhymes pretty good with the above - especially on Europe: EU pays price for oil sanctions on Iran: John Kemp
Rising prices affect all oil-importing countries, but the impact has been most pronounced in Britain and the euro zone because of the weakness of their currencies.
In U.S. dollars, prices are still some way below the peak reached at the height of the last price crisis in July 2008. Front-month U.S. crude futures are trading around $103 per barrel, while Brent is just under $120, both well short of the record over $140 set nearly four years ago.
But sterling oil prices are already well past their 2008 level and prices in euros are within 2 percent of their 2008 peak (Chart 1).
In contrast, Brent prices in China's yuan and Japan's yen are still 20 percent and 40 percent below their July 2008 peak respectively, owing to the strengthening of those currencies (Chart 2).
In a bitter irony, Europe's businesses and households are being hit hardest by the embargo EU foreign ministers imposed, in many cases overriding warnings about the possible impact from their own energy ministers and advisers.
Posted by: b | Feb 20, 2012 1:05:37 PM | 10
I live in Norway, the little ripe pimple in the north of Europe. And of course, we also implement the US-imposed sanctions on Iran, like the US puppets all NATO-lands are.
The embargos on Iran is not only a result of capturing droids, hacking satellites or being in Israels face with iranian urane, the whole thing is a mess that the military lobby has created, because, they see Iran as being Obama's necessary war to keep the wheels turning. How many presidents in the US have not started at least one proper war?
The result is not only USA painting themselves in a corner, but even splashing the entire EU economy right out.
A weaker middle east and europe makes the relative level of USA better, hence why USA have strenghtened military presence in the further east, China.
Embargos on Iran is just a necessary move in the game to push Israel and the USA's military position up, despite, no matter, and because of the cost.
Traditionally, when the head of Iran say they don't have a nuclear weapons program, its probably true.
Like in Irak, USA will not find Weapons of Mass Destruction in Iran either. And going there will be a hell of a lot worse quagmire than Irak.
Sorry about this rant, but, I sincerely hope it doesn't come to a military move on Iran. Please, USA & Israel, don't. The middle east is sorting itself out, let it.
Posted by: Alexander | Feb 20, 2012 2:05:27 PM | 11
While I thought Obama would be a bad president and could not vote for him, he continues to amaze me as to just how bad he has been, works at being, and will be.
He must want to get his very own war on really bad -- Made in America by Obama Or he's really, really, really stupid about economics and doesn't give a flying fuck about the 99 Percenters of his or any other nation.
But he did get a marketing award for his presidential primary and general election campaigns. The selling of a president and selling out of a nation and the world.
Posted by: jawbone | Feb 20, 2012 3:41:16 PM | 12
Well said as usual, b. And as you would say (not to put words in your mouth), Juan Cole is right on Iran, but he couldn't be more wrong on first Libya, and then on Syria. You'd think that a very intelligent guy like Professor Cole would be smart enough to learn from his mistakes, thus preventing himself from making the same mistake twice, but apparently that's not the case. He was wrong about the Libya rebels being pro-democracy freedom fighters, then he went on to be wrong again about the Syria rebels also being pro-democracy freedom fighters. In fact, it's turning out that these rebel fighters are more interested in terrorizing the people of Libya and Syria than they are in bringing freedom and democracy to them.
Though I'm not a betting woman, I will put money on it that Juan Cole is knowingly being wrong on Syria, just as he was on Libya, because he's being paid to do so. I came to this conclusion after he described anyone who believes that the CIA and Mossad are backing the Syrian rebels as being brainwashed by "the looney Western Left" who are peddling "Baath black propaganda":
These fighting words from this neoliberal, silver-tongued sycophant are causing my blood to boil over with rage. It's high time for the real antiwar Left to fight back and declare war on Juan Cole and the entire neoliberal power structure, which is built on a phony pack of lies!
Posted by: Cynthia | Feb 20, 2012 4:40:57 PM | 13
There's actually almost 0 difference between what Juan Cole has to say about this same subject today.
It's almost as if b scrambled a few words and made it his own post.
Posted by: slothrop | Feb 20, 2012 7:58:01 PM | 14
One minor criticism : "Note that the benchmark WTI price of $105, which is set at the pipeline hub in Cushings Oklahoma, is currently distorted. Cushings is oversupplied and lacks pipelines that could transport the oil from the U.S. midwest to the coasts."
Delivery to Cushing is only nominal. In practice the purchaser says where they really want the oil delivered, and the price is adjusted accordingly. So a seller actually delivering to Nederland, Texas would get paid the contract price less the cost of delivery to Cushing, and the buyer in Nederland will pay the contract price less the cost of delivery from Cushing, and the oil is handed over in Nederland, and everybody is happy.
Cushing only has tankage to cover about 1% of the volumes on the move each day, so it isn't so much Cushing that is over-supplied as the total market since the Keystone pipeline from Canadian came on-stream.
Posted by: Dave Kimble | Feb 20, 2012 9:39:07 PM | 15
@14 "It's almost as if b scrambled a few words and made it his own post."
Except that b is liberally quoting from his own posts from December and January, and pointing out that what he said *then* is coming true *now*.
So unless b is able to hop into the way-back-machine with Sherman and Mr. Peabody, to emerge at the other end circa December 2011 with a freshly-printed hard copy of Informed Comment circa February 2012...... then I'd have to say that your theory falls down in the face of the easily-verifiable fact that b said it first, and said it often.
Sorry, but thanks for playing.
Posted by: Johnboy | Feb 21, 2012 6:19:31 AM | 17
What is to prevent rogue elements from the Financial Trading firms doing some damage to suppliers storage ports and receiver terminals in different countries?
I recall Krugman's Enron postings where generating units were taken offline deliberately to increase electricity rates in California. So, to ask again, if someone wanted jimmy up Transco, UK distribution network, how much would it take?
If I were to guess things about pipelines and distribution, there are only a few operators and limited landing sites for Oil/Gas termination points in different countries.
Any hostile/ pre-emptive take out by *cough* by a non arab muslim country would factor that as one of their SOP. You have miles and miles of pipeline....and in fact, the smartest thing to do is to...
Attack the Russian pipelines to Germany, Ukraine. That will cause a fantastic ripple of demand from North to South and stop the sanctions in its track. You can't replace 30-40% supply overnight.
The only hitch is to make it look like a UK attack on the pipelines in terms of a false flag.
Why UK, you ask? The 'Great Game' is still being played....for keeps.
Anyways, enough of my feverished imagination here.
Posted by: shanks | Feb 21, 2012 10:52:48 AM | 18
Obama has indeed painted himself into a corner. Oil prices have started to cause real pain for voters.
By obsessively appeasing Zionists and militarists, Obama has reached a point where he must now back down a lot in the confrontation with Iran, else oil prices will continue to rise. The longer he lets tensions fester, the higher the likelihood that high oil prices will drive him from office.
I think reality has finally dawned on the man who prefers to lead from behind. But assuming leadership is unfamiliar, uncomfortable territory for the Great Appeaser, so backing down will be painful. It takes a long time to switch the course of US government policy, and Obama has almost no time left.
Posted by: JohnH | Feb 21, 2012 11:30:38 AM | 19
Actually, USA benefit from this situation; the higher oil-prices make processing same-continent tar-sand profitable.Thus making for a softer transition from oil-based economy to solar and nuclear-electric.
Posted by: Alexander | Feb 21, 2012 11:47:11 AM | 20
Oops, sorry for the bold.
My point was, that oil-peak has already occurred, and the slope down is steep.
Posted by: Alexander | Feb 21, 2012 11:51:22 AM | 21
A good thing? Depends on whether the result is more nuclear, more tar sands and more fracking of natural gas. Transition to denser urbanization and greener technologies would be good.
Over the short term, there will be a lot of pain, particularly for poor, rural Americans who must drive long distances to work because of unaffordable housing and sprawl.
Those are the folks who will decide Obama's fate.
Posted by: JohnH | Feb 21, 2012 12:14:43 PM | 22
@shanks - nice idea but Germany and other countries have at least 90 days total consumption reserves.
Pipelines are also usually easy to repair. It may take a day or two but there are alarm crews and materials ready for pipeline issues.
But still, the price of oil would immediately go up.
Should something happen to a significant port facility (Ras Tanura)though that would have more consequences and take much longer to repair.
Posted by: b | Feb 21, 2012 12:15:08 PM | 23
Sanctions on Iranian oil are playing a big role in driving up oil prices, but oil speculators are playing an even bigger role in this. This is what happens when our major banks, the ones that have direct access to the Federal Reserve's Discount Window, are able to borrow money from the Fed as zero cost to them.
Believe me, if the Federal Reserve were to suddenly raise short-term rates, even if it were only by a fraction of a percent, oil prices, including most other commodity prices, would drop like a rock. The stock market is also benefiting from an zero interest rate environment, which explains why stocks are on an upward tear, while earnings are still pretty sluggish.
The only people who are being harmed by the Fed's zero interest rate policy (ZIRP), besides those who have to work for a living and those who have to spend a large percentage of their earnings on food and fuel, are people like myself who are savers and who are risk-averse investors. I am very upset by this , and now you know why.
Posted by: Cynthia | Feb 21, 2012 2:15:38 PM | 24
It seems a lot of the teething-pains around the world is symptoms of a hard transition from oil-economy to alternatives, even information-economy. With the new flow of information with the Internet, the previously invisible corporate forces and economic influences in policies and media, will be less covert and easier to unveil.
Mainstream is getting more savvy in that respect too, thanks to sites like moonofalabama,, not mainstream, but priceless intellectual resource for learning what is going on. Excellent work on this one b!
Posted by: Alexander | Feb 21, 2012 2:27:37 PM | 25
though I have to say that i'm a bit surprised and disappointed by "b" in the comment section labeling Juan Cole as a "major war monger". That's a distorted, intra-partisan view that doesn't reflect Cole'´s general positions during the last decade — the crucial Iraq and Iran issues included. I had, and expressed several times in those days (at The Washington Notes comment threads) deep suspicions against the NATO intervention in Libya, suspicions that were confirmed in the aftermath. Thus I disagreed with Cole. The same goes for his take on the current Syria debate. But from there to characterizing him a "major war mongerer"?
C'mon "b", look at the bigger picture — and Juan Cole's consistant efforts regarding the major issues of our time: Iraq, and later Iran.
Despite your disagreements, be more generous, please!
As a fresh example of what makes it inappropriate to label Cole a major war monger, let me point to Cole's last article:
Posted by: Paul Norheim | Feb 21, 2012 4:05:28 PM | 26
It's probably more correct to label Juan Cole as a selective warmonger. Libya was a case in point. Now Syria, where Cole has even refused to allow comments that provide information that contradicts his account of events.
Cole is weird in the sense that while he reads Arabic, he prefers to get his information from the Western, corporate media and from Saudi controlled news outlets, which all sing from the same script.
I'm sure there are reasons why he keeps the blinders on and refuses to step much beyond the bounds of acceptable opinion...
Posted by: JohnH | Feb 21, 2012 4:20:24 PM | 27
If you insinuate that Cole is influenced or paid by the Saudis, that doesn't rhyme with his opposition to an attack against Shia-Iran, does it? Nor was his opposition to the Iraq war in 2003 conform to Israeli or US views or any corporative MSM media influential in those days. The insinuations that "here are reasons" just don't convince me.
I notice that "b" often refers to what he said years ago on this blog — at a time when nobody, probably, took notice. Yeah, I appreciate that feeling. And judging by the articles I've read of him recently, he really deserves a far larger readership than he has. But narrowminded and secterian fights, resentment, and competition with a blogger like Juan Cole, who, in the overall frame of MSM in the US, is closer to Moon of Alabama than to the beltway establishment, is not the way forwards, me thinks.
Cole is certainly, in my view, among those who deserve arguments, and not invectives or insinuations regarding who's paying for his opinions.
Posted by: Paul Norheim | Feb 21, 2012 4:48:16 PM | 28
Juan Cole was fervently anti-war during the Bush era, and fervently anti-Bush as well. In return Bush set the FBI onto Cole, which made him feel decidedly uncomfortable.
But then came Obama, and suddenly everything the establishment did was OK. I think Cole is now a valued adviser to the administration, hence the change.
I recently asked Cole if he could translate from Farsi the statements made by Iran about blocking the Straits. I believe they said 'if our oil isn't allowed through the Straits, no one else's will be either' - meaning a BLOCKADE situation. This has been translated by the US as meaning SANCTIONS, which paints Iran as reckless. Anyway, Cole said he didn't have time to dig out the sources. And this is in the face of WW3 by mis-translation!
Posted by: Dave Kimble | Feb 21, 2012 7:47:52 PM | 29
Former American National Security Official, Hillary Mann Leverett appeared today on Al Jazeeras Inside Story, and set the reckord straight on the villification of Iran. She criticised Mitt Romny and the media for using knee-jerk inflamatory rethoric on the Iran situation.
H. M. Leverett has served under even Clinton and Bush, working on the Iranian nuclear programme relations.
She basically says
Iran has complied all the way on its Non Proliferation Treaty obligations.
Under the Shah, USA supported Iran with a Weapons grade nuclear plant - a plant that has no civilian use. When Iran entered into the NPT they reconfigured that nuclearplant to strictly only use civilian grade uranium, that is less than 20% enriched uranium.
Since then, Iran has fully complied with it's NPT obligation, and even accepted further measures than other nuclear nations observe, allowing intrusive international supervision.
The only reason The Islamic Republic of Iran has had to undergo such scrutany is, regardless of rule, that it is exactly that, an islamic republic. Israel have for decades claimed that Iran is on the verge of developing nuclear weapons, when in fact they have taken a firm stance against atomic bombs. Ahmedinejad has characterised the Russian, Indian and Pakistani aquisitions of nuclear weapons as being crippeling, and actually a liability for those countries, rather than a tactical advantage. So accusing the Iranian government of being engaged in a military nuclear programme must be motivated by a wish for the US to launch a military intervention.
The reasoning by Ahmedinejad probably being that nukes cannot be used in a way that does not imply a war-crime. It is clear that Israel doesn't gain security from having several hundred nuclear war-heads of uranium- and plutonium-type, it just makes everyone bordering their country more paranoid.
The IAEAs inspector Herman Nackaerts says that Irans refusal for IEAE to inspect the Parchin military complex, south of Tehran, which they know is not a nuclear site, but actually more of a explosives research facility, call the inspection non-productive.
As if USA or any other country for that sake would allow Iranian inspectors access to any military facility in their country.
The IAEA has been compromised by Israeli influences, while blatantly disregarding the Israels own nuclear programme. The escalating retoric by Israel and the AIPAC-echoing republican christian-fundamentalist candidates, like Mitt Romney, is fueling the tension, and it seems like a quite transparent attempt to create a fear of Iran, military strike by Israel, and persuading EU and other countries to boicott Iranian oil. This is merely a instrument to regulate the global oil-price, this is now on the verge to spiral out of control if Israel, or in a longer run, a republican US president come to power, and actually lauch a strike.
It would be interesting to know who is channeling money to members of the IAEA, i'm sure trails lead to MOSSAD.
Anyway, I hope more of the moderate people, like Hillary, speak out on the real position of Iran.
Posted by: Alexander | Feb 22, 2012 8:46:42 AM | 30
The Parchin-facility probably is the
Posted by: Alexander | Feb 22, 2012 9:05:59 AM | 31
Oil producers - as I read them - worry about international kerfuffle - it raises prices for a time, but then, what follows? Demand destruction is a killer. War is the pits. Volatile prices also, as they jeopardize long term projects, financing, etc. The ones who like the movements are the traders, the middlemen, all those not involved in extraction.
These ‘sanctions’ on Irani oil are crack-pot, though their intention is clear.
Iran will sell its oil no matter what - prices rise, and in the US, will be seen as due to evil oil-producing countries, those bastards who sit on black gold and deserve what is coming to them. A type of ‘escalation’ measure.
Why did Bush not attack Iran? Why was that delayed, why didn’t it happen?
I guess that depends on why one thinks Bush was brought into office in the first place. 9/11 gets thrown into the mix there. That the Iraq invasion was on the cards was known for a long time, yet, Iran, was, and is, the target, Afgh. and Iraq were easy to throw into chaos... and real men go to Teheran.
see e.g. this map of US ‘bases’:
Sure there were quarrels between neo-con Aipacs and military/older established republicans/realists of other stripes, and the various risks and so on were an obstacle (these are the same today)...but..?
Posted by: Noirette | Feb 22, 2012 10:44:29 AM | 32
Cole chose to block informative comments I made criticizing his "humanitarian" position on Libya. Thereafter, I was blocked from posting for some time.
More recently he blocked comments I made showing that the Syrian rebellion had armed elements from the start and that it was currently being supplied from Lebanon.
For some reason, Cole does not want an open discussion of the facts, choosing to block those that he views as inconvenient. I don't say that he's in the hip pocket of anyone, only that he won't allow discussion past certain red lines of his choosing or of someone else's.
And readers need to know that Cole, informed as he is, prints only the news that "is fit to print."
Posted by: JohnH | Feb 22, 2012 11:39:51 AM | 33
@Paul Nordheim - Juan Cole was FOR the war on Iraq, the war on Libya and the war on Syria and publicly said so. I do not know his stand about Afghanistan, but I am pretty sure he agreed to that one too. He was also for the Balkan wars.
I remain convinced that, for all the concerns one might have about the aftermath, the removal of Saddam Hussein and the murderous Baath regime from power will be worth the sacrifices that are about to be made on all sides.
The only positive I can says of him is that is not a zionist.
But he is definitely a war monger.
Posted by: b | Feb 22, 2012 1:30:33 PM | 34
As usual pretty good - McClatchy: Once again, speculators behind sharply rising oil and gasoline prices
Defining what percentage of today's high oil and gasoline prices is due to excessive speculation, driven by Iran fears, is something of a guessing game.
"I put the Iran security premium at about $8 to $10 (a barrel) at this point, which still puts crude at about $90 or $95," said John Kilduff, a veteran energy analyst at AgainCapital in New York.
The fear premium is the froth above what prices would be absent fears of a supply disruption_ somewhere in the $80 to $85 range for a barrel of crude oil. It means that even with the extra cost put on oil from Iran fears, prices are at least another $10 higher than what demand fundamentals would dictate.
Why? Financial speculators.
Posted by: b | Feb 22, 2012 1:45:20 PM | 35
Rampant speculation would seem to favor those who choose to do business with Iran, which prefers long term contracts. And those who do long term contracts can also negotiate bilateral terms, in effect knocking the dollar out of the deal.
The existing liberalized trading system favors spot pricing and futures trading, which favors the dollar and commodities markets based in the US.
My guess is that the more speculation there is, the more buyers will choose long term deals, eventually marginalizing the role of commodities markets and the dollar.
Once again, it appears the US is shooting itself in the foot, which is getting to be the new normal for US behavior.
Posted by: JohnH | Feb 22, 2012 2:30:22 PM | 36
As I mentioned above in a comment, Juan Cole sees people like you, as well as me, and most others here at MOA as being part of, in his words, "the looney Western Left" who are devising and disseminating "Baath black propaganda." That alone should tell you that he's not a trustworthy ally of ours.
And not only has he censored me, as he has done to you, but he's also been very mean and hateful to me. Not to my face, he's too much of a chicken to do that, but he's been mean and hateful nonetheless. I'm one to respect people's differences, and I hardly ever hold grudges against others, but my ability to remain calm and cool with this man has got me at the end of my ropes!
Posted by: Cynthia | Feb 22, 2012 3:18:33 PM | 37
Ah, I was sure Cole opposed the invasion of Iraq.
Sorry, b. Should have done my homework on Juan Cole.
Posted by: Paul Norheim | Feb 22, 2012 4:43:01 PM | 38
Cole is one of the ‘convinced, sincere’ intertuby commentators who relentlessly seek exposure, position.
That boils down to adopting mainstream positions and feeding in the standard arguments, coming from some position of ‘expertise’. What his is right now is moot.
I used to read his old blog - when he was a Bahai - because I was interested to see how religious values could possibly be translated to international politics. He broke, afaik, with the Bahai church. Why I did not exactly follow.
relic of that old blog:
and he did more or less at some points oppose the Iraq invasion, though that could be discussed back and forth as it is here now:
Posted by: Noirette | Feb 23, 2012 12:22:36 PM | 39
Juan Cole was anti-Bush, not anti-war. He at first supported the war, got some doubts as it was about to be launched (due to fears of incompetence by Bush/Rumsfeld), and became anti-Iraq war after things went horribly wrong.
There are a lot of people in the USA who turned out to be anti-Bush instead of anti-war, even though they went to a lot of anti-war rallies.
I really cannot understand how one could like Obama but hate Bush. Their policies are the same, or a bit worse, in nearly all areas.
The ones who like Bush but hate Obama are likely just racist.
Posted by: Susan | Feb 25, 2012 7:28:43 AM | 40