Even as uncertainties abound about the fundamentals of the energy market, geopolitical tensions in the Middle East regained center stage after Israel’s transportation minister and a deputy prime minister, Shaul Mofaz, said Friday that an attack on Iran’s nuclear sites looked “unavoidable” if Iran did not abandon its nuclear program.Investors are dumping dollars and jumping into oil futures, which makes sense. The dollar is sinking, and oil looks to be a safe bet to maintain value in the long term, right up to the point where the very last barrel sucked out of the ground is priceless. Talk of $5 per gallon of gas in the US by November isn't out of line at all [although the ostrich talk is a bit twee. My money is in auroch futures].
Iran is the second-largest oil producer within the OPEC cartel and exports nearly two million barrels a day. Because the world has few supplies to spare, any interruptions in Iran’s exports could push prices to higher levels. The world currently has about three million barrels a day of spare capacity, and consumes 86 million barrels a day of oil.
—NYT, June 6, 2008
An "unavoidable" attack on Iran would certainly cinch the deal.
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