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Why Iran matters to oil markets
CNNMoney.com ^ | March 28 2007: 3:23 PM EDT | By Steve Hargreaves

Posted on 03/28/2007 3:25:02 PM PDT by DBCJR

As tensions mount with Iran, oil markets around the world remain fixated on the Persian Gulf, ready to send prices soaring on the slightest hint of escalation.

Tuesday crude oil jumped $5 a barrel, or about 8 percent, on rumors, later denied, that U.S. warships had clashed with Iran's naval vessels.

...the United States gets less than 20 percent of its oil from the Mideast, and has an embargo on all oil from Iran. Plus, experts say Iran needs to export oil just as badly as the world needs to buy it, making a complete shutoff unlikely.

...

Iran, the world's No. 4 producer, has been playing hardball of late. It seized 15 British sailors Friday...

It remains defiant in the face of recently tightened United Nations sanctions designed to stop the country from enriching uranium...

Traders fear military action could disrupt oil supplies flowing through the narrow Strait of Hormuz, which Iran borders on the north.

And although Iran relies on oil exports for up to half its government budget, traders fear the country could use oil as a weapon, withholding it in retaliation for sanctions or a military strike on its nuclear program.

"If you want to see a quick way for oil spices to spike to $100, all they have to do is threaten to pull some or all of their oil off the market," said Neal Dingmann, a senior energy analyst at Dahlman Rose & Co., a New York-based energy investment firm.

... Iran ranks as the world's fourth-largest producer behind Russia, Saudi Arabia and the United States.

...

With an estimated 137 billion barrels, the country's oil reserves are second only to Saudi Arabia's 264 billion barrels, according to EIA. And it has the world's second-largest reserves of natural gas, behind Russia.

(Excerpt) Read more at money.cnn.com ...


TOPICS: Business/Economy; Front Page News; United Kingdom; War on Terror
KEYWORDS: britain; energy; iran; notbreaking; oil; un
"Stop or I'll shoot!" Iran said with gun pointed at Iran's head.

One thing obviously missing: China's voracious apetite for oil. And where do they buy oil?

1 posted on 03/28/2007 3:25:03 PM PDT by DBCJR
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To: DBCJR
"Stop or I'll shoot!" Iran said with gun pointed at Iran's head.

Reminds me of the Cleavon Little bit in "Blazing Saddles".

To answer you question - if Iran's capability is taken down, they go onto the spot market until they can make other longer term arrangements.

2 posted on 03/28/2007 3:29:53 PM PDT by surely_you_jest
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To: DBCJR
I know I'm in the minority, but I'd settle for a short term increase in gas prices in exchange for a thousand tomahawk cruise missiles landing so sweetly on Iran's oil refineries. We have the resources in this nation to meet our oil needs. Perhaps at 5 or 6 dollars a gallon, folks wouldn't be so opposed to more refineries, offshore drilling and of course opening up ANWAR.
3 posted on 03/28/2007 3:30:40 PM PDT by mainerforglobalwarming
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To: surely_you_jest

LOL-Stop or I'll shoot the...


4 posted on 03/28/2007 3:31:29 PM PDT by unkus
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To: mainerforglobalwarming
No need for that at all... we can block Iranian ports, achieve the same goal, yet have the infrastructure there for when the "regime change" takes place.

One of the first things we 'secured' in Iraq were the oil fields, so Saddam couldn't light them up like he did on his way out of Kuwait.

There are MANY more interesting targets to take out in Iran anyway.
5 posted on 03/28/2007 3:33:04 PM PDT by FreedomNeocon (Success is not final; Failure is not fatal; it is the courage to continue that counts -- Churchill)
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To: DBCJR

I did not realize the US produced more Oil than Iran. Very interesting. Why aren't we part of OPEC?(s/)


6 posted on 03/28/2007 3:35:47 PM PDT by Albert Barr
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To: mainerforglobalwarming
I'd settle for a short term increase in gas prices

I'd settle for a long term increase if we'd quit buying foreign oil.
7 posted on 03/28/2007 3:36:09 PM PDT by P-40 (Al Qaeda was working in Iraq. They were just undocumented.)
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To: FreedomNeocon

Ideally, I'd love for the U.S. and Britian to sponsor a civil war in Iran. Give the 'freedom fighters' all the weapons and aid they need to destroy the Mullahs.


8 posted on 03/28/2007 3:37:12 PM PDT by mainerforglobalwarming
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To: mainerforglobalwarming

I retired from the service several years ago, but when I was still active the price tag on a plain vanilla cruise missile (not the sea-launched version) was on the order of $600,000.00 a copy, give or take, based on quantity, IIRC.

That would put the price tag of your strike at $ 600 million. Can be done by different means far more inexpensively . . . .

And, as another poster notes, we don't need to destroy the infrastructure to shut them down, and there are some significant drawbacks longer term to destroying that infrastructure.


9 posted on 03/28/2007 3:39:32 PM PDT by surely_you_jest
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To: P-40

I think we can achieve both. And a side benefit of this would be to crush the global warming nuts. Humanity. cars are not causing global warming. The sun is, the oceans are. We can pollute the water, create wonderful smog filled rides to work. But global climate change? That's a joke.


10 posted on 03/28/2007 3:40:19 PM PDT by mainerforglobalwarming
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To: P-40
I'd settle for a long term increase if we'd quit buying foreign oil.

Amen.

11 posted on 03/28/2007 3:40:39 PM PDT by surely_you_jest
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To: mainerforglobalwarming
of course opening up ANWAR

There is no 'of course' about ANWR. The TransAlaska Oil Pipeline is about to be shut down and torn out. ANWR won't keep the pipeline open unless it goes online soon, and there will be a ten year lag between permit approval and first flow. Time is about up. Also, it is ANWR.

12 posted on 03/28/2007 3:41:38 PM PDT by RightWhale (Treaty rules;commerce droolz; Repeal the Treaty)
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To: surely_you_jest

Thank you Jimmy Carter for this mess. The Shah was trying to modernize his nation, and we should have helped him crush the Mullahs. I hope to God that there are enough Iranians left from that era, that would be receptive to starting a civil war there.


13 posted on 03/28/2007 3:43:50 PM PDT by mainerforglobalwarming
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To: surely_you_jest
"Stop or I'll shoot!" Iran said with gun pointed at Iran's head.

Reminds me of the Cleavon Little bit in "Blazing Saddles".

"Do what he say! Do what he say!".......sorry couldn't help it. One of my favorites.

14 posted on 03/28/2007 3:44:28 PM PDT by OB1kNOb (The Senate and House members who voted for the troop withdrawal timetable are TRAITOROUS COWARDS.)
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To: RightWhale

I'm in a very compative mood today, please excuse the ANWAR slip.


15 posted on 03/28/2007 3:45:28 PM PDT by mainerforglobalwarming
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To: mainerforglobalwarming

It's nothing. The serious concept is that ANWR can do anything at all. If it is not produced soon, and it may already be too late, there won't be a pipeline to ship it through. The pipeline is past its design lifetime, and while it is still functional the volume of oil being shipped is getting near the lower end of utility. There may be only two, or maybe at the most ten years left before the volume is so little it is not worth keeping the pipeline open. If ANWR comes in after that it won't justify the pipeline.


16 posted on 03/28/2007 3:51:15 PM PDT by RightWhale (Treaty rules;commerce droolz; Repeal the Treaty)
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To: mainerforglobalwarming
I hope to God that there are enough Iranians left from that era, that would be receptive to starting a civil war there.

A number of them left. Many of them, and their descendants, live in the metro Washington, DC area, and in California.

17 posted on 03/28/2007 3:51:28 PM PDT by surely_you_jest
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To: Albert Barr

Top World Oil Producers, 2005
Country / Total Oil Production
(million barrels per day)

1) Saudi Arabia / 11.1
2) Russia / 9.5
3) United States / 8.2
4) Iran / 4.2
5) Mexico / 3.8
6) China / 3.8
7) Canada / 3.1
8) Norway / 3.0
9) United Arab Emirates / 2.8
10) Venezuela / 2.8


18 posted on 03/28/2007 4:03:49 PM PDT by thackney (life is fragile, handle with prayer)
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To: RightWhale
The TransAlaska Oil Pipeline is about to be shut down and torn out.

Don't be ridiculous. We are replacing the pumps with new electric drive units because it will be used for at least another few decades.

19 posted on 03/28/2007 4:05:59 PM PDT by thackney (life is fragile, handle with prayer)
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To: Albert Barr

I guess we're not a big exporter of oil. We consume more than we produce. BTW....any connection to the South Carolina Barrs?


20 posted on 03/28/2007 4:11:31 PM PDT by Godebert
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To: thackney

Yes, if oil production stays above a certain minimum. It looks like about two years. In 3-4 years oil revenue to the State will be low enough that the deficit will require a substantial State income tax. Our future is flippin' sweet, said Frank. But we fired him.


21 posted on 03/28/2007 4:12:39 PM PDT by RightWhale (Treaty rules;commerce droolz; Repeal the Treaty)
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To: mainerforglobalwarming
You're not alone. Blow the facilities up. Deliver a financial death blow to the regime which is long overdue. Show the world what happens when they aren't involved in the solution...let them bear the price. For us it will be cheap versus a full-blown military campaign. Increased oil prices will hurt us less than China and other developing nations.

LBT
-=-=-
22 posted on 03/28/2007 4:18:13 PM PDT by LiberalBassTurds (Bear in mind that half the population has a below-average intelligence.)
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To: RightWhale
There is no if, the upgrades are purchased, installed and going through commissioning now. There are twelve new 6,500 HP pumps with Electric Motors and Variable Speed Drives along with five new 12.9 MW Turbine Generators. Pumps Station 9 is operating on the new units. The project is behind schedule and over budget of course, but the majors have invested a large sum of money for the continued operation of the line. ConocoPhillips and BP are investing about 600~800 million a year in new capital projects. Shell is spending money drilling offshore.
23 posted on 03/28/2007 4:20:47 PM PDT by thackney (life is fragile, handle with prayer)
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To: LiberalBassTurds

The solution is so simple, yet the world refuses to act. I'm beginning to understand how Hitler rose to power, how 'PEACE IN OUR TIME' came to be. People are so afraid of losing what they have, that they fail to see they'll have nothing if they do not act.


24 posted on 03/28/2007 4:23:51 PM PDT by mainerforglobalwarming
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To: thackney

Of course they have. They have to upgrade. It is no indication that the pipeline will be operating in ten years, which it would have to be for ANWR if ANWR goes ahead now, right now.


25 posted on 03/28/2007 4:24:31 PM PDT by RightWhale (Treaty rules;commerce droolz; Repeal the Treaty)
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To: mainerforglobalwarming
True mariner. Fat, dumb, and happy. We better take some well calculated risks and take them now. I do not want the guilt of knowing we could have prevented a nuclear detonation in Israel, or any other friendly nation.

LBT
-=-=-
26 posted on 03/28/2007 4:30:19 PM PDT by LiberalBassTurds (Bear in mind that half the population has a below-average intelligence.)
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To: LiberalBassTurds

The entire world knows that Iran sponsors terrorism. Is trying to develop nukes. What the heck are we waiting for? You'd think that our military planners have been prepared for this type of senario. It's amazing that we think we're going to talk them into a compromise, that we're talking to the Iranian government at all. They must be defeated not negotiated with.


27 posted on 03/28/2007 4:35:39 PM PDT by mainerforglobalwarming
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To: RightWhale
It is no indication that the pipeline will be operating in ten years

I greatly disagree with this thought. There are lots of indications, including the owners of the pipeline spending hundreds of millions of dollars for new production pads and enhanced oil recovery.

28 posted on 03/28/2007 4:42:51 PM PDT by thackney (life is fragile, handle with prayer)
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To: mainerforglobalwarming

"The entire world knows that Iran sponsors terrorism. Is trying to develop nukes. What the heck are we waiting for? You'd think that our military planners have been prepared for this type of senario. It's amazing that we think we're going to talk them into a compromise, that we're talking to the Iranian government at all. They must be defeated not negotiated with."

And everytime we prove to them exactly what we are made of, liberal wimps, the little guys think they are a little tougher, Allah really is on their side, and they get bolder. We are road mapping a nuke in our midst.


29 posted on 03/29/2007 5:20:07 AM PDT by DBCJR (What would you expect?)
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To: Godebert

No relation that I know of.


30 posted on 03/29/2007 5:42:14 AM PDT by Albert Barr
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To: thackney

It is possible. Both you and I have seen projects fold after large investments.


31 posted on 03/29/2007 8:57:43 AM PDT by RightWhale (Treaty rules;commerce droolz; Repeal the Treaty)
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To: RightWhale

Possible yes. But for your prediction to come true all the projects have to fold, not just one or two.


32 posted on 03/29/2007 9:00:57 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

Oil production would not have to go to zero. When it falls to about half of what it is now, which is 1/4 of what it was when the pipeline first started flow, it will be a coin toss whether it is worth pumping any more.


33 posted on 03/29/2007 9:12:12 AM PDT by RightWhale (Treaty rules;commerce droolz; Repeal the Treaty)
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To: RightWhale
When it falls to about half of what it is now

Using only existing production fields, ignoring the new fields that are being explored and drilled, it will be 20 years before the production falls to half of today. With Pioneer and Shell and NRPA it will fall much slower. If ANWR would come in, it would start increasing instead of falling. It might rise without it, but probably not.

Annual Reports, Section Three, Historic and Forecast Production
State of Alaska, Dept. of Natural Resources, Oil & Gas

34 posted on 03/29/2007 3:03:44 PM PDT by thackney (life is fragile, handle with prayer)
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To: DBCJR

It is time to blocade the entire Iranian shoreline. Let no ships leave or enter. The ships which try, should be seized and possibly scuttled. Sink their Navy and blow up their airforce. Then destroy their generals and army leaders.

When that is over, bomb and kill ever Islamofascist leader/mullah we can find. After the regime change, arm the good Iranians and post a bounty for the heads of the remain Islamofascist Serial Killers. With a triple bonus on the Iranian Serial Killers in Iraq.


35 posted on 03/30/2007 11:52:38 AM PDT by Grampa Dave (GW has more Honor and Integrity in his little finger than ALL of the losers on the "hate Bush" band)
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To: OB1kNOb
"Do what he say! Do what he say!"

They said you was hung...

36 posted on 03/30/2007 12:00:45 PM PDT by gogeo (Democrats want to support the troops without actually being helpful to them.)
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To: gogeo
"Do what he say! Do what he say!"

They said you was hung...

"And they was RIGHT!"

37 posted on 03/30/2007 12:13:22 PM PDT by OB1kNOb (The Senate and House members who voted for the troop withdrawal timetable are TRAITOROUS COWARDS.)
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