What has oil traders tossing and turning every night is the possibility of an attack on Iran and Tehran’s violent response, sending oil prices through the roof. Iran is the second-biggest oil producer in the Organization of Petroleum Exporting Countries. “The price will go up to $200,” Manouchehr Takin, Senior Petroleum Upstream Analyst with the Centre for Global Energy Studies (CGES) in London told New Europe, asked what would happen if there was military action against Tehran.
The market is very nervous when it comes to big oil producers such as Saudi Arabia, Iran and Iraq. Iran exports about half a million barrels of crude per day, which is a huge volume to suddenly disappear from the supply in the world, Takin said. “The market doesn’t just limit itself there. The market thinks that Iran will react and there will be missiles one way or another, back and forth, and by accident the Saudi Arabia installations might be hit or some major tankers or the Straits of Hormuz,” the CGES analyst said, outlining the catastrophic scenarios that could lead to a skyrocketing oil price. “If you put yourself in the position of oil traders that want crude oil, they are prepared to pay more,” Takin said.
“People think it will not be a contained action of Israeli planes hitting some parts in Iran and then going back. No, Iran, as soon as the planes are gone, will immediately send missiles everywhere. That’s at least what they say and I believe them because they wouldn’t sit and make a protest to the UN Security Council that Israel has attacked them and they should condemn Israel. No, they would seek retribution, they would react, send missiles, 2,000 missiles. They may not be effective all of them,” Takin said, adding, however, that some missiles may hit US aircraft carriers and naval ships, leading to an American involvement. “And then there are individual people ready to sacrifice themselves in speed boats and they could hit tankers, they could hit naval boats … You can’t shoot all of them. American naval ships and aircraft carriers being in the Persian Gulf are just like standing targets,” Takin said.
On 1 December, European Union foreign ministers approved measures against some 180 individuals and companies in reaction to Iran’s continued support for terrorism and an International Atomic Energy Agency (IEA) report finding that Iran had conducted secret activities specific to nuclear weapons. But Brussels stopped short of announcing an agreement, proposed by France and backed by Britain, Germany and the Netherlands, to proceed with a full embargo on imports of Iranian oil. EU foreign policy chief Catherine Ashton said any consideration of steps against Iran’s energy sector would go “to the technical experts.” Meanwhile, all eyes were on Israel on 1 December after Israel’s defence minister said Tel Aviv does not want to take military action against Iran over its nuclear programme, but at some point may have no other option. Mysterious blasts have disrupted Iran’s nuclear programme, and there has been speculation of Israeli involvement. But a military action against Iran would be catastrophic. “Let’s hope it doesn’t happen,” Takin said.
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