Red Headlines For July 10, 2008

OPEC warns against military conflict with Iran

VIENNA: The head of the Organization of Petroleum Exporting Countries warned Thursday that oil prices would see an “unlimited” increase in the case of a military conflict involving Iran, because the group’s members would be unable to make up the lost production.

“We really cannot replace Iran’s production – it’s not feasible to replace it,” Abdalla Salem El-Badri, the OPEC secretary general, said during an interview.

Iran, the second-largest producing country in OPEC, after Saudi Arabia, produces about 4 million barrels of oil a day out of the daily worldwide production of close to 87 million barrels. The country has been locked in a lengthy dispute with Western countries over its nuclear ambitions.

In recent weeks, the price of oil has risen higher on speculation that Israel could be preparing to attack Iranian nuclear facilities. The saber-rattling intensified this week with missile tests by Iran. That has further shaken oil markets because of concerns that any conflict with Iran could disrupt oil shipments from the Gulf region.

“The prices would go unlimited,” Badri said during the interview, referring to the effect of a military conflict. “I can’t give you a number.”

Emphasis added by me.

This is troubling:

Total, the French oil giant, has decided to back away from planned investments in Iran because of political uncertainty, a company official said Thursday, David Jolly reported from Paris.

Total’s withdrawal from Iran, including a planned huge gas project in the South Pars field, makes it the last major Western oil company to give up on Iran amid pressure from Washington.

“We think that under current conditions it is not possible in Iran just now,” Patricia Marie, a spokeswoman for Total, said.

I don’t recall the title just now* (it will probably bubble to the top of my brain as it usually does: when the PC is off, the lights are off, and I’m trying to submerge myself in sleep!), but several years ago I read a book about Iraq and one noteworthy thing was an attack by Israel on a French-made and French-staffed nuclear lab. The French had obviously been given advance warning and the staff were staying away that day (all except for one ejjit who insisted on being dedicated to his work!).

That a French firm has now decided to avoid Iran gives me a bad itch.

Oil prices going sky-high post-attack on Iran? I said that here.

* Update: Saddam’s Bombmaker: The Terrifying Inside Story of the Iraqi Nuclear and Biological Weapons Agenda by Khidhir Hamza with Jeff Stein

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