Re: Iran - Last Minute War Preparations?

An economist is connecting dots on some interesting bits of oil related news:
globaleconomicanalysis.blogspot.com...

His last line brings it all into focus:

Strange Picture

If there is not much demand for heavy crude, why isn't the discount greater?
Why has Iran been storing oil in tankers instead of the ground by simply not pumping it?
Why do analysts doubt Iran will cut back if Iran has no above ground place to store oil?
Why the mad rush to fill the reserves when they are 97% full?

Planning something?

Yikes!

This guy does not usually wear a tinfoil hat which to me makes this "follow the money" story doubly interesting.

Storing oil in takers rather than leaving it in the ground or selling it at over $120 a barrel makes no sense until you come across this little gem in the comments section:

...it's very simple really. The tankers are the Iranian's insurance policy against a strike. Their thinking goes like this: if you try anything stupid we would blow up those tankers and turn the straits of Hormuz into a raging inferno and we'll see how you like that. In a way your question contains the answer - Why has Iran been storing oil in tankers (with carrying costs) instead of the ground (no carrying costs). They may appear dumb, but I don't think they are that dumb.

Considering everything going on between warring Sunni and Shiite factions in the Middle East (read Lebanon, Iraq etc. and remember is being played as a proxy war) Bush's visit to Israel, and the recent sabre rattling, could we be looking at last minute war preparations here?
.

The most interesting aspect of this situation is that Bush wants to continue filling the remaining 3% of the 701million barrel strategic reserve.

Why would he be happy and eager to pay $127/ barrel for the oil, when there is a significant store of oil remaining in the reserve?

Something tells me that Bush knows that the oil prices are going to go further up from now onwards. Perhaps a strike on Iran would lead the Arab league oil producers to shut their oil refineries?

A strike on Iran in itself would be enough to spike oil prices up by another $20 at least. Such a price change would be exponential when viewed with the prices vs time.

Originally posted by 44soulslayer
Why would he be happy and eager to pay $127/ barrel for the oil, when there is a significant store of oil remaining in the reserve?

That and the storing of low grade heavy crude in floating tankers (floating bombs?) is what made me sit up and take notice.

Both are interesting developments and make no sense.
.

I speculate that US reserves will be filled - come late summer Bush will allow a gas tax holiday. Then, oil prices will miraculously fall below $100 per barrel just in time for the election and McCain will reap the benefits. Something will happen with Iran and people will blame Iran for the hike in prices again. WAR.

IMHO of course....

Or you could connect the dots in a different way and consider that maybe Iran IS selling the oil and it is going to the US. All the posturing in the media may be a simple diversion to keep the world's attention on the middle east.

I have no proof whatsoever for this, just thought it was an interesting way to connect said dots.