Right now, every time Iran says something, oil traders equate that as risk to the oil supply, so Iran gets paid more.
Iran has figured out that if they cause trouble they will get paid more, and by ratcheting up the tensions, they can probably get better concessions from the world body to end the "crisis"
My economic theory taught me that if price gets too high the market will cause substitutions. Higher mileage cars will sell better or oil tar sands and oil shale research will get jump started. Likewise better old well oil recovery schemes will be put forward. Who knows maybe some off limits drilling sights will get drilled?
Yes, Iran can make a fuss and that will raise the oil price in the short run. In the long run, if the price is too high, change will happen and Iran will loose as will Saudi Arabia and a lot of other middle eastern countries.
posted on 01/24/2006 11:38:03 PM PST
(D.Rather "Hoist with his own petard!" www.freerepublic.com/focus/f-news/1223916/posts)
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