Iran, Hormuz and the price of oil

Posted: January 16, 2012 in economy, Iraq War, political stupidity
Tags: , , , , , , , ,

Iran, Hormuz and the price of oil

So we’ve removed our forces from Iraq and it seems that the citizens of Iraq have decided that since they have so much in common with Iran that maybe they should be better allies with them, than the United States who liberated their country by bombing it to rubble and helping them execute a dictator.  Now in the end, the folks of Iraq are almost certainly better off than they were under Saddam Hussein, the country is no longer controlled by a militant minority and an evil dictator.  Eventually, hopefully they will work things out and become a new type of Arab democracy.  However, it seems more likely that they are heading for a lot of internal strife between Sunnis and Shiites. 

Additionally, the Iranians have this crazy idea that they should be a nuclear power.  That of course is an idea that doesn’t sit well with the Great Satan or the nation of Israel.  So one or both of our countries is undergoing a covert war against the Iranian nuclear program by blowing things up in Iran, in particular, Iranian nuclear scientists.

So sure, why should you care, this is just the normal insanity and stupidity of international politics right?  Well there are a couple of very good reasons why you should be paying attention to this issue and the first one is oil prices.  You may have noticed that gas prices have started rising again at the pump and there are even reports that the Chinese, who get a lot of oil from Iran are starting to look at other sources.  Sources that we use, which will up demand and therefore the price of the oil we buy.  Oil prices go up and gas prices follow, it’s as simple as that.

The other reason you should care is that an ever more desperate Iran may end up doing something extremely stupid like try to close the Strait of Hormuz.  Now no one believes they could keep the strait closed for very long, reports our anywhere from 2 days to 2 weeks.  However if they were to keep the straight closed for any amount of time, oil prices would spike significantly, gas prices as well.  And with that commodity prices follow, people buy less and our economy slows down once again.  So at the end of the day, a little stupidity in Iran could really be a problem for each of us.


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