Posted by
JTD on Tuesday, July 29, 2008 2:34:55 PM
Take it from one of those eeeeeevil speculators: Don't look for a major drop in the price of oil until well after the election. We may be down about 15% from the recent peaks, but that is well within normal market fluctuations. I may be small potatoes when it comes to the extent of my speculation in the commodity markets, but I am well attuned to where the big boys are putting their money.
Those insiders are convinced that Israel is not going to stand by and let Little Man Ahmandinijad brings his nuclear weapons dream to fruition. If Obama is elected, the Israelis are guaranteed to act before he takes office on January 20, 2009. They have no faith in Obama's commitment to protect Israel or prevent Iran from getting nukes.
An Israeli strike, whether with or without United States' support or participation, is guaranteed to disrupt oil traffic in the Middle East for anywhere from a couple of weeks to several months. Iran has credibly threatened to shut down the straits of Hormuz if their nuclear facilities are attacked. Don't doubt that they have the means to do it.
Roughly 17 million barrels of oil per day or about 40% of all ocean-carried oil is shipped via tanker through these narrow straits. All of the oil squeezing through the 21-mile strait is well within range of Iranian missiles and aircraft. The sinking of only a few tankers would be sufficient to render those waters impassable.
If Israel is acting with the support of the United States, you can expect the American Navy to try to keep the straits open, but the Iranian response is likely to be intense. It is possible that the Iranian response will also include strikes against its neighbors production facilities. Facing Iran across the gulf and the straits, after all, are Saudia Arabia, the UAE, Qatar and Kuwait. (We won't even consider here the 40,000-60,000 missiles aimed at Israel by Iranian proxies in Lebanon and Gaza.)
World producers, consumers and -- yes -- speculators are hedging their bets based upon the expectation that a huge oil stockpile crisis is just around the corner.
While an Obama election guarantees Israeli action between November 4, 2008 and January 20, 2009, a McCain election victory does NOT eliminate the possibility of a strike against Iran, it merely widens the window of opportunity. The Israelis know that they can count on John McCain to support action against Iran's nukes, and therefore, they will not feel compelled to act by January 20, 2009.
Of course, there is also the more remote possibility that Israel is already in possession of information concerning Iran's nuclear progress which makes immediate action necessary. Whether Israel, under such circumstances, would take the risk of being accused of trying to influence the U.S. elections by acting before November 4th is unknown -- most likely remote, but not impossible.
Therefore, the threat of massive disruption of oil supplies is with us today and will be with us AT LEAST until January 20, 2009 if Obama is elected. The risk remains if McCain is elected, but the action deadline will be extended to that time when Israel -- and perhaps the United States -- determines that Iran's nuclear program is approaching the point of no return and must be stopped then and there.
Think about it: If you were a big money producer or consumer in the oil markets wouldn't YOU be hedging your interests right now? Only a fool would not!
Oh, and by the way, only a complete idiot (are you listening Miss Pelolsi) would be thinking about drawing on our strategic oil stockpiles now, when a massive market disruption may be only weeks away?
THE MAELSTROM QUOTE OF THE DAY" "Sometimes war is the ONLY answer!"
TheMaelstrom