Oil crisis: Bush over the barrel
If US President George W Bush wants to boost Republican chances of holding on to the White House and keeping Democratic gains in Congress to a minimum in the November elections, he might consider taking an attack on Iran before the end of his administration “off the table”. Of course, that’s probably the last thing Bush will do. But there’s a little doubt that forswearing military action against Tehran should ease the upwards pressure on world oil prices - which hit a historic high Monday of more than 143 dollars per barrel before falling back to 140 dollars - and thus offer at least some reprieve to the United States consumer at a time when record gasoline prices appear to be driving widespread popular dismay with the state of the US economy.
“If this administration truly wanted to spare Americans further pain at the pump, there is one thing it could do that would have an immediate effect,” wrote Michael Klare in this week’s Nation magazine and author of a new book, “Rising Power, Shrinking Planet: The New Geopolitics of Energy”. “Declare that military force is not an acceptable option in the struggle with Iran.”
While oil analysts say that prospects of a continuing decline in the dollar no doubt played an important role in Monday’s price jump, they also pointed to this weekend’s pointed reaction by the commander of Iran’s Islamic Revolutionary Guard Corps, Gen. Mohammed Ali Jafari, to recent United States and Israeli threats to attack Tehran’s nuclear facilities.
In addition to retaliating against any regional powers, presumably including Israel, which take part in such an attack, Jafari warned that Tehran would “definitely act to impose control on the Persian Gulf and Strait of Hormuz,” after which, he added, “the oil price will rise very considerably, and this is among the factors deterring the enemies.”
Indeed, even without an attack, continuing tension involving Iran’s nuclear programme will almost certainly contribute to a continued rise in oil prices to as high as 170 dollars a barrel in the coming weeks and months, OPEC’s president, Chakib Khelil, said during a conference in Madrid.
World oil prices have risen by nearly 50 per cent since the beginning of 2008 and nearly doubled over the past year. Analysts have argued over how much of that increase is due to structural factors in the world economy — such as growing demand in middle-income countries and the depreciating dollar that would tend to make the price increase permanent — and how much is related to worries about possible supply disruptions arising from the kind of conflict that has plagued the Niger Delta region in Nigeria, terrorist attacks by al Qaeda in the Gulf, economic or other sanctions against key oil-producers, or war.
Klare believes that the oil markets believe “there’s at least a 50-per cent chance that the United States and/or Israel will attack Iran before Bush leaves office and that Iran will retaliate (in ways) ...that would push oil prices to 200 dollars a barrel and above” which is why speculators are buying oil futures now at 140 dollars and even 150 dollars a barrel.
“The run-up in the price today will only encourage more speculators to get into the act, unless the administration makes clear it has no intention of attacking Iran and will force Israel to make a similar declaration, neither of which is likely to occur,” he said. — IPS