If Iran is referred to UNSC, oil prices would hit $100 -

If Iran�s referred to UNSC, oil prices would hit $100 -


If Iran’s referred to UNSC, oil prices would hit $100
1/14/2006 4:32:00 PM GMT
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Iran's crude oil and natural gas reserves are estimated to be worth $ 3,000-bn
The intrigue over Iran's NUCLEAR PROGRAME has deepened recently and threats, led by the U.S., to refer Iran to the UN Security Council, have intensified, echoing development in the run-up to the Iraq war.
The recent standoff over Tehran's NUCLEAR ACTIVITIES between Iran, the second-biggest producer in the 11-member OPEC, and the world's fourth-largest exporter on one hand and the West on the other hand could result in oil prices reaching unprecedented highs the coming few weeks, an editorial published on MPH magazine stated yesterday.
What the U.S. and its European allies shouldn’t ignore is Iran's strategic importance to the United States and the West in general and its role in the global energy equation.
Facing mounting international pressure, the Islamic Republic threatened yesterday to stop co-operation with United Nations nuclear inspectors if it's hauled before the Security Council for possible sanctions.
U.S. officials, allied with Europe and Canada in taking Iran to the UN body, don’t rule out using the military option to end what they see as “Nuclear Threat”.
But one thing is certain: the BUSH administration will never mention oil as a reason for going to war as in the case of IRAQ, when SADDAM HUSSEIN's alleged WMD were cited as the principal justification for the U.S.-led INVASION.
"We will not tolerate the construction of a nuclear weapon [by Iran]," is the way the U.S. PRESIDENT GEORGE W. BUSH put it in a 2003 statement. But just as the failure to discover those banned weapons in IRAQ undermined America’s use of WMD as the key justification for its illegal WAR, so its claim that an attack on Iran would be justified because of its alleged nuclear potential should be a subject of a widespread skepticism.
The article further stated that experts say that the nuclear standoff over Iraq's nuclear programme and a possible end of Iranian oil exports to the Western market if its nuclear dossier was sent to the UN Security Council and sanctions were imposed, has put a new floor under oil prices at above $60 a barrel.
Manouchehr Takin, an analyst at the London-based Centre for Global Energy Studies expects that "if Iran stopped exporting it would be a major shock for world markets," warning that oil prices would hit $100 a barrel.
"Supply and demand are very tightly balanced, and the world doesn't have the spare production capacity." Iran, which holds 10 percent of the world's oil reserves, produces around four million barrels a day (b/d) and exports 2.4 million-2.6 million b/d, mainly to Japan, China, South Korea, Taiwan and Europe.
Iran's crude oil and natural gas reserves are estimated to be worth $ 3,000-bn.
The withdrawal of Iran’s oil exports would deal a major blow to world markets, and lead to an overall inadequacy of global spare capacity, estimated at just 1-1.5 million b/d, due to the fact that much of it consists of heavy oil, which few refineries can handle, the article added.
Iran remains the "major upside risk on oil prices. Nobody's going to start selling the market aggressively. It's only going to take one headline for prices to move higher," Barclays Capital analyst Paul Horsnell said.
Moreover, UK-listed firms could also be directly affected by sanctions, including Royal Dutch Shell and construction group Costain.
Also Shell, it has no production in Iran at present, but has started holding talks with National Iranian Oil Company to build a liquefied natural gas plant.
Recently oil experts in the U.S. raised concerns over Iran's trading oil in Euros. Iran started trading oil with its European and Asian partners using the Euro which means that without some form of U.S. intervention, the euro will establish a firm foothold in the international oil trade, an obvious encroachment on U.S. dollar supremacy in the international oil market, given the U.S. debt levels.
"Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes...known instruments for bringing the many under the domination of the few. . . No nation could preserve its freedom in the midst of continual warfare."
- James Madison, Political Observations, 1795
Madison’s words should be taken seriously by the American people and world community. The deteriorating situation on the ground in IRAQ portends an even direr situation for American soldiers and the People of the world community - should the U.S. pursue a similar strategy regarding Iran.