Jul 18 2008
Iran’s role in higher oil prices
Finally, an explanation of the creeping oil crises that makes sense to me. Gary Thayer, Senior Economist of Wachovia Economics Group, says “It is impossible to say for sure, but it appears a great deal of the jump in oil prices during the past few months is related to the growing concern that Israel may attack Iran in order to stop Iran’s nuclear enrichment program. Israel even staged practice flights designed to show Iran that it is capable of making such an attack. In addition, there were reports that Saudi Arabia might not oppose an attack.
However, it is important to remember that a country seldom reveals its intentions this clearly if it is really getting ready to make such a strike. Instead, these efforts could be designed to get Iran to negotiate rather than be attacked. If Iran gets the message and signals that it is serious about negotiations to limit its nuclear program, oil prices could decline. Moreover, Israel and Syria appear to be working toward a peace accord that could neutralize one of Iran’s biggest allies in the region. This could also lessen geopolitical tensions in the Middle East, allowing oil prices to retreat.”
