Wednesday, January 17, 2007

Don't get too excited about the $50 per barrel oil

True, those prices have been dropping as of late. Who knows, if Bu$hCo doesn't do something stupid, like bomb Iran, those prices might stay down in the $50 range for a spell. Oh, wait. That's Bu$hCo we're talking about. With all this talk of escalating the war in Iraq as well as positioning naval warships near the Persian Gulf, one could imagine the temptation among those in the White House to send a few B-1 Bombers to wreak havoc on the Iranian infrastructure. Heck, an actual invasion isn't in the cards - there just isn't enough army left for such an undertaking. There sure would be a whole lot of suffering as a consequence though:
Iran has plenty of options to hurt the US. The Shia militias in Iraq, which have largely ignored U.S. forces unless harassed, are tight with the Iranians, having received shelter and support from Iran during Hussein’s rule, and sharing, as they do, a common religion. If Iran comes under attack, it is hard to believe that the Iraqi militias will not turn their substantial firepower on outnumbered US forces in Iraq.

When you think of it, attacking Iran would be a wonderful way of doing what the U.S. claims it has been wanting to do for several years now: uniting the Sunni and Shia forces in Iraq and ending their fratricidal conflict.

And then there’s the economic costs of an Iran War. Here Iran really has to do nothing, though it could make things all the worse by using one of its high-tech anti-ship missiles to sink an American naval vessel or even just a civilian tanker in the gulf. Even without such an action, an invasion of Iran would lead to a shutdown of oil coming from the Persian Gulf. That’s one quarter of all the oil supplies in the world. Even if Iran never fires a missile, the insurance industry will make it impossible for any ship-owner to sail into the gulf.

So forget $80/barrel oil. Crude oil would quickly soar past $100 a barrel, past $160 a barrel, probably. Some analysts have even talked of $200 a barrel. No matter—after $100 a barrel, the world economy would grind to a halt. And the American trade deficit would go through the roof. We’re not talking slowdown here; we’re talking global depression.
There you have it: rogue nation defying UN and Nuremberg charters cause both enormous loss of lives and global economic depression. Completely preventable of course: Congress could actually put an end to funding White House military misadventures. I have grave doubts about Congressional "leaders" having the gumption to do so. Once the wheels come off the economy and the spigot that fuels the US military is turned off, substantial portions of the global community will be in a position to impose their own solutions regarding US militarism. I wouldn't be the least bit surprised if the current movement toward escalation of war in the Middle East continues on its present course.

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