SCDigest
Editorial Staff
Schork Says: |
While oil and diesel prices would soar in the short term, how long the prices stay elevated depends on two key factors: the Iranian response and whether any of this actually impacts the flow of oil.
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While world oil prices continue to be on a roller coaster, up now sharply from Q1 lows, but still less than half of the July 2008 highs, there is one worrisome wild card that businesses around the world need to consider: that before long, Israel will decide to attack Iran in an attempt to destroy its nuclear weapon ambitions.
What would such an attack do to oil prices?
“It's difficult to say for sure, but I think we would see an absolutely knee jerk rise in oil prices,” says Stephen Schork, a widely respected oil industry analyst and editor of The Schork Report, a newsletter that tracks the oil market for businesses and investors. “I can’t say how high for sure,” he told SCDigest in an interview last week, “But we know we can get to $147, and it’s quite possible we could go higher than that.”
The potential isn’t idle speculation. In 1981, Israel launched a pre-emptive attack on a facility in Iraq, thought to be building nuclear weapon capabilities for Saddam Hussein.
Could history repeat itself?
Just this month, some observers believe both Saudi Arabia and US Vice President Joe Biden gave a “green light” of sorts to such an attack.
On June 5, the head of Israel’s intelligence organization Mossad was reported to have told Prime Minister Benjamin Netanyahu that Saudi Arabia would turn a blind eye to Israeli jets flying over the kingdom during any future raid on Iran’s nuclear sites, based on secret talks the two countries had earlier in the year.
Two days later, Biden said on an interview program that “Israel can determine for itself - it’s a sovereign nation - what’s in their interest and what they decide to do relative to Iran and anyone else.’’ He added that this was the case, “whether we agree or not’’ with the Israeli view.
When asked more pointedly about whether the US would try to prevent such an attack, Biden said, “We cannot dictate to another sovereign nation what they can and cannot do.
(Transportation Management Article - Continued Below)
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