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On Iran, oil prices and how the Hajj f$#/ed Iran
After Iran had broken off the negotiations over its nuclear program and refused to ship some of its uranium supply to France, and other western countries, talk about the imminent attack have, once again, started to make the rounds. In his recent interview with the British Daily Telegraph , French foreign minister, Bernard Kouchner, expressed his deep concern ( as if ) over Israel. As you might know, Israeli prime minister Benjamin Netanyahu visited his Russian colleague Vladimir " I can kill you with my bare hands, and I will if you don't STFU and do as I say " Putin to discuss the potential backing of Israeli war efforts against Iran. The Jerusalem Post reported that the conversation between the two tsars .... uh, i mean, prime minister was focused on the potential Russian arms backing of Iranian military. This is the short excerpt from the article in The Jerusalem Post:
Israel Radio reported that Netanyahu leased a private jet since he knew using an Israel Air Force jet would raise the suspicions of the Israeli media.
For the purpose, his office used a plane of the company Merhav, a company owned by Israeli mogul Yossi Miman, one of the shareholders of Channel 10 and EMG, an Egyptian company supplying gas to the Israel Electric Company. Miman was not directly involved in leasing the jet, as this was done through a company he owns.
The PMO and Merhav refused to divulge the cost of the flight. Israel Radio further reported that the plane took off from a terminal in Ben Gurion International Airport which is mostly out of use.
Israeli media outlets speculated on the secretive nature of Netanyahu's Russian visit. One reasoning was that Netanyahu tried to persuade Putin about not backing the Iranian military efforts with shipments of Russian weaponry to Iranian military. Some journalist even reported that Netanyahu had promised Putin, that the dispute over a defense shield in Eastern Europe will be resolved shortly, if Putin stays clear from providing any help to Iranian government. After the talks were over, president Barack Obama publicly announced that the project of an Eastern European defense shield will soon come to an end.
There was some speculation brewing over the potential pan-Arabist unification if Israel attacks Iran, and that the potential Arab block could easily halt any global recovery via implementation of oil exporting embargo, as was done in the 1970s by King Faisal ibn-Saud during the Arab-Israeli conflict. But there is no support for such a claim, quite the opposite is true. Today the Saudi Hajj minister Fouad al-Farsi told Iranian officials not to politicise, or in any other way, disrupt the Hajj. Here is the article in which this is mentioned
JEDDAH - Saudi Hajj Minister Fouad al-Farsi told Iran not to politicise the hajj after Tehran leaders said Iranians could experience mistreatment during the annual pilgrimage, a report said Wednesday.
Iran "should not take advantage of the pilgrimage for political purposes and its own agenda," Farsi was quoted as saying in the Al-Watan newspaper report.
Iranian President Mahmud Ahmadinejad and Supreme Leader Ayatollah Ali Khamenei recently warned that Saudi Arabia, a predominantly Sunni Muslim country, might abuse the mainly Shiite Muslim pilgrims from Iran during the hajj, which begins in November.
"If they impose restrictions on Iranian pilgrims... the Islamic Republic will take the appropriate measures," Ahmadinejad said Monday in a meeting with hajj officials, according to the official website for the Iranian presidency.
On Monday Khameini also raised the issue of alleged "insults and mistreatment against some Shiite Muslims," saying "the Saudi government must take action against such acts."
As a gravitational center of Islam, Kingdom of Saudi Arabia is an important international player. As the largest oil producer on Earth, it also has a strong voice when it comes to global geo-political affairs. That said, it is impossible to consider that the Saudis and their allies will take sides with Iran. I would, if the circumstances were normal, never write about this, since we have seen similar situations, regarding Iran, in the past.
But given that the last peaceful solution has been rejected by Iranian officials, and that the sanctions which the international community is trying to put on Iran are not a pragmatic way to diminish the potential threat which would emerge with Irans development of a nuclear weapon, this circumstances, can in no way, be considered as normal. Hence the potential for, yet another, conflict in the Middle East is real. With the global economy on the path of recovery ( yes, yes, i also think that is BS, but the powers to be think otherwise ) the neighbouring Muslim nations will not take any part in this conflict if one emerges.
So, it is my belief that the serious disruption, in the global oil prices, will occur for several reasons. The current dollar policy conducted by the FED chairman Ben Bernanke has already influenced the rise in oil prices. Whether those price increases were due to the sectoral inflation, or because the traders were just hoarding into that specific commodity due to the belief that the recovery is on the way, is unimportant. What is important to know is that the stronger demand for oil will surely emerge IF the conflict arises, if for nothing else than for the demand which will be generated by both sides of that potential conflict. Also, if the FEDs dollar policy continues, and the dollar becomes weaker, a sudden surge of liquidity in oil will happen given that it is almost a standard belief that commodities are a good inflation hedge.
The situation in equities is, also, not bright and shiny, and many analyst, among them David Rosenberg, predict that the US indexes reached a top when the DOW passed the 10 k barrier. I do not recommend you any trade based on this, this is simply an outline of what might potentially happen if yet another conflict in the Middle East arises. But if history is any kind of a teacher ( and is usually the best one ), the best thing is to study the oil prices after the war in Afghanistan started, and ater Iraq was attacked.
Now, most of you know what happened to the oil prices, and where that lead us. Now multiply that by 10, and you will have a pretty good picture of the economy we will have IF, yet another time, a dark side of that what constitutes Humanity wins.
Thank you for reading.
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not an impossibility, but that would necessitate Ben Bernanke stop being a stupid fuck and starts to behave like a rational human being .... so .... not an impossibility, but highly unlikely .....
http://www.voltairenet.org/article160014.html
Cheeky , Nice job !
Please keep this topic going with the Israel / Russia/ Iran topic being white hot and our kids being hammered in Afghanistan ....this context is an imperative.
Also very tradeable intelligence.
god I love this site!
Nice, finally a thought about oil and not a story about support levels. This post and your post about the European theater are a welcome relief to the stale dollar/gold fairytales.
Your time and effort are appreciated Cheeky, but you will never hear me say so.
+1
Thank you guys for all the additional sources of info. Will put them to use.
Its fucking nice to have commentators like you . Thanks again.
Persian Gulf would be blocked, oil prices thru the roof. But the Saudis would still be able to ship oil thru the Red Sea. Gives me the creeps. This is the last thing we need now.
http://www.eia.doe.gov/emeu/cabs/Saudi_Arabia/images/Oil%20and%20Gas%20I...(large)%20(2).gif
According to The Sunday Times, Mossad chief Meir Dagan held secret meetings with Saudi officials, who gave their tacit approval to Israel's use of the kingdom's airspace.
"The Saudis have tacitly agreed to the Israeli air force flying through their airspace on a mission which is supposed to be in the common interests of both Israel and Saudi Arabia," The Sunday Times quoted a diplomatic source as saying last week.
The report also quoted John Bolton, the former U.S. ambassador to the United Nations, as saying that it would be "entirely logical" for Israeli warplanes to fly over Saudi Arabia en route to bombing nuclear targets in Iran.
http://www.haaretz.com/hasen/spages/1097882.html
Good article...I am surprised by the Hajj's comments but not Saudi's there is something MUCH deeper going on behind the scene's for that to go public...very revealing.
Everyone is certain about Saudi and the "anglo-banker" ties...that is now very evident to the masses during the Bush administration and they are still in disbelief that "this time is different" with Obama but we have all seen this before
Again there will be conflict but it won't be nuclear...to many assets in IRAN, Obama is stalling in afghan because they want to drag it out because they don't want to hit IRAN yet...they want to sit tight until it is time and any headway made will take away from a future build up...(which is coming)
Finally a spike in oil prices will provide perfect cover for the bankers when the "recovering" economy collapses and the bankers will again re write history of "the oil shock that collapsed the recovery" ...
Also Leon Ponetta (CIA DIRECTOR) just said there will be another "cyberspace Pearl Harbor"......this will be the move to control the internet and its contents...see the last quote published here on Oct 27...
http://blog.madhedgefundtrader.com/
The last guy to call an "Pearl Harbor" event in the US was Dick Cheney two years before 911.
http://www.ifamericansknew.org/us_ints/nc-pilger.html
Well probably all just coincidences...
The important thing is the saber rattling between Iran and Saudia. In event of combat operations, Saudia implies it will replace any Iranian shortfalls out of its incredible 'spare capacity'. This is important and can't be over- emphasised.
Saudia has the veto over any actions directed against Iran. The problem is that Saudia is caught between its ongoing and long running lies about its reserves and its perceived need to become the Arab hegemon in the gulf.
Good article Cheeky, don't let the Bastard(s) get you down.
steve
Leon's roars have been spooking me a lot lately as well. It makes total sense. There is no way they can continue on this path without controlling the information flow. And just like the wars, the public will never approve of a bill unless there's some sudden attack.
PNAC was a lot more dicks than one. I see Chris Floyd did some contribution to your second link. He does interesting stuff and has brilliant style.
A complicated issue being played out on several levels. Does Obama "allow" the Israelies to fly over Iraq to bomb Iran?...or do the Israelies try and use Turkey? How can Turkey keep its' "props" with the Islamic world if it allows the IAF to use Turkish airspace? Can the IAF hit enough targets in Iran to eliminate the inevitable counterstrike?
Who the fuck knows. but I am glad I gotta little gold.
Thanks for the story. It would be interesting to see more stories that focus not just on commodities but on currency and other trading as a tool of strategic geo-policy. The financial markets are as much a tool of war as they are of "free market capitalism".
i agree ... i will do my best to cover the developments outside the US ( i mean Tyler and the gang have that pretty much covered ). I will focus on that in my future posts. Simply to give a, more, global view on the economy. I will prepare a story on joint arab currency proposed recently, and will keep you guys updated on the non-US developments.
I would take Cheeky Bastard seriously if he used proper grammar and punctuation. The ADHD sentences don't help, either.
Clear and concise. What's so hard about that?
"What's so hard about that?". You tell me. By the way, you misplaced a comma after the word help in your sentence.
Plus, "Clear and concise" is a fragment. By the way Mortimer, your commas were perfect.
Hes a third grade economist. No meat.
+1 A pet peeve of mine too. We all have spell-check, yet spelling is worse than ever. On the other hand, Teddy Roosevelt tried to switch us over to phonetic spelling, but no, so I guess we have only "ourselves" to blame. And those weird French and Latin guys with their weird letter combinations.
English is half French, half German. It's the French part that makes it sound so funny. Try: Push to flush.
will take ADHD over immaturity any day of the week.
I agree. Too bad Cheeky isn't mature, either. The title of his post is:
"On Iran, oil prices and how the Hajj f$#/ed Iran"
You call this mature?
"Vladimir " I can kill you with my bare hands, and I will if you don't STFU and do as I say " Putin"
"Actually, the Saudis would love if Iran gets fucked by Israel"
"the conversation between the two tsars .... uh, i mean, prime minister was focused"
Do you think Cheeky is mature and my post isn't? He writes like a teenage boy.
dude, how about moving on to another article instead of trolling this one? We get it. Cheeky's thesis is obvious, he's immature, he needs help with spelling and grammar, blah, blah, blah.
Your criticism is monotonous and redundant. (Ironically, the same problem you had with Cheeky's comments).
I happen to think Cheeky's points are timely considering the direction oil has been trading the last few sessions. Basically, no other resource is more sensitive to geopolitical events and being reminded of that every so often doesn't warrant your negativity.
cheer up
it called humor
get some
money is not the most important thing in the world
neither are you
This was for free, and another one ... it really doesnt interest me what you have to say, if you cant say nothing of substance ...
good
good
Most have forgotten that Muslim extremists took and held Mecca hostage on Nov 20th 1979 for a couple of weeks. The Saudi's had to call in the French Foreign Legion (based in Djibouti at the time) to clear them out. They had a simple method. Light tires on fire and roll them into the rooms they were barricaded in. Almost zero western media coverage by the way.
It is also widely believed that the Iranians were a part of it too.
http://en.wikipedia.org/wiki/Grand_Mosque_Seizure
Thank YOU for sharing your insight!
Whether.
Great article, you bastard. +5
CB,
I'm keeping my eye on Russia. Joe Biden's recent speech was very provocative from Russia's perspective. I believe the Russians will respond by increasing tension in the Persian Gulf.
I believe conflict is very close at hand.
I always wondered why oil was being stored on tankers at sea when the price of oil was low last fall. Start a conflict with Iran and have the Straits of Hormuz closed and the oil on those tankers will be worth a lot of money.
Biden is full of shit. If Putin and Netanyahu had an agreement, Putin will not brake it. Say about him what you want, but the man keeps his words. Also, i think it is stored at sea for 2 reasons only
As I said, Netanyahu cleared most of the problems for Putin in Europe, and that is all the man ever wanted. Also, he is having his eye on Ukraine ( because of the economical problems ) and is basically treating it like it is his own little dance monkey. You will witness that in the winter months,when the question of gas pipes will, again, emerge as a central question, for both, the Ukraine and the EU ( especially Germany ).
Interesting. Recent report from "Upstream":
Russia decides to not pay advance tariff as Ukraine hints at increases.
Looks like Russia-Euro gas could be headlines again this winter.
However, the election in Ukraine is Jan. 17, so I don't expect any problems before then. Russia is rumored to be supporting Timoshenko.
Right. An attack on Iran would raise crude prices dramatically - good for Russia. The said attack would also create vast logistical problems for U.S. forces in the region - good for Russia.
I also feel that Iran would openly sacrifice a few nuclear sites for the same reasons stated above. Chess originated in the region; I believe we are witnessing some master players at work.
Netanyahu may have cleared problems for Putin in Europe but the U.S. is trying to stir up trouble on Russia's periphery. Thus the provocative speech last week. Why is Obama stirring the pot? Russia knows that the U.S. needs their help on Iran. Poking Putin in the eye with your middle finger seems counter productive.
What's your take on Ukrainain election in January? I think Yushchenko gets the boot and Ukraine moves closer to Russia.
Thank you for your work
I really would like to give you my take on the whole Obama-Putin poking-in-the-eye thing, but i have no idea why Obama ( or better said his advisors ) are being such dubmfucks.
I agree, Yushchenko out, someone from the Russian side in. A natural political move, IMHO. Will ease the things on both Russia and the Ukraine. Thanks for commenting man.
CB study history on the Russian empire and who overthrew the once mighty, free and great Russia. During the 1000 year Romanov reign it was a pretty awesome place so history says... Russia wasn't the always the whore/house mob run country that it is now. (Much like the US) You will find the your link directly to why BN and Putin are in cahoots...it is all a show
I thought Obama already made his deal with Putin on Iran implicit in Iran's political flailing ever since, which was compounded by BN's visit? My read for a month has been no attack as Russia has already been given the task of babysitting. It's just that the Mullahs don't want to look powerless. My Take ... No attack.
No way. No how !
Lot's of full tankers floating out there now...
some are owned by banks I here.
The Poland missle shield DOA was deal to which I referred.
Good catch, Cheeky. Long time observer-first time poster on your post.
Also, don't forget recent approaches of Turkey's pro-Islamic AKP government towards Russia, Pakistan and, of course, to Iran.
What a great strategic partner! More to come in Middle >east, that's for sure.
Keep up the good work, CB.
Best,
A.
Summary of article:
If there is an oil embargo the price of oil will increase and the recession will be worse.
Thanks for the insight Cheeky Bastard
Again, why am I being censored?
I agree with you that there is nothing particularly insightful in Cheeky's article. On the other hand, I agree with Cheeky that you are stupid.
+1
Someone named anonymous is complaining.......How many times have we seen this?
Cheeky....don;t waste your breath on this ass clown
On a side note, besides censorship, it is interesting to think about the reflexivity of the whole idea, and additionally raises questions about how markets possibly work.
Yes, the surge in oil prices resulting from a conflict would draw additional investors and thus drive the prices up further, given that additional supply couldn't miraculously appear to quench the thirst for exposure/consumption. This would be the reaffirmation of the prevailing/underlying assumption.
This thought draws to mind the thought that the initial violent price movement upwards would in the long run limit/or use up some of the total price movement. As in the price movement has only so much to go, and a veracious price movement early on would serve to in the long run limit the total price move. As in the market serving as a information discovery mechanism, the initial movement signaling to participants that the commodity itself is economically expensive, and that a viable alternative/reduction in consumption is needed, limiting long term demand, thus affecting long term price.
A weird thought involving time, price movements and underlying macroeconomic fundamentals.
you are not being censored, just stupid. create a nick and there will be no time delay between when you hit " save " and when you are able to see your comment .... no need to post the same thing 4 times ....
I'm filing a motion of No Confidence in Zero Hedge/Cheeky Bastard. While everyone else was posting and being published I was silenced. I'm disgusted.
uh, dude, actually no. I wrote the exact opposite of that. I said that the oil prices will go up simply because there will be SOME disruption in the transportation of oil, and many other things, and that there will be no oil embargo like in the 70s , because the Saudis are very militant toward Iran. I only mentioned Faisal' embargo as a historical reference, not as a historical similarity. Actually, the Saudis would love if Iran gets fucked by Israel, simply because the oil would go up, without any increase in production or anything else. there is app. 500 billion bbl of oil in on shore storage' and in off shore tankers waiting to be used one way or another. Also, more realistically is that the oil will go up amid FED monetary policy.
Agree that there will be no embargo, but I wouldn't want to be sailing any large tanker thru the stratz while Iran is on a rampage to shut it down. It would amount to a percieved embargo.
I see how ZeroHedge Operates:
Dissent is censored.
I bring up an attention deserving point.
Cheeky Bastard's post has an economic utility equal to that of a domesticated feline.
The jist of his ramble is simply that given supply disruptions the price of oil would increase, hampering the global economic recovery.
It is long winded, yet short on non-public information and meaningful analysis and insight.
"Hence the potential for, yet another, conflict in the Middle East is real."
Really? Anybody who has been reading the news for the last five years understands that the situation in Iran is inherently unstable and this condition adds to volatility in the price.
"So, it is my belief that the serious disruption, in the global oil prices, will occur for several reasons.
The current dollar policy conducted by the FED chairman Ben Bernanke has already influenced the rise in oil prices."
The devaluation of the dollar has lead to increased prices in the oil market, yes, thank you Cheeky.
"Whether those price increases were due to the sectoral inflation, or because the traders were just hoarding into that specific commodity due to the belief that the recovery is on the way, is unimportant."
Sectoral Inflation--as in the global recession, the demand for oil in particular increased and thus drove the price up? Wtf mate?
"What is important to know is that the stronger demand for oil will surely emerge IF the conflict arises, if for nothing else than for the demand which will be generated by both sides of that potential conflict. Also, if the FEDs dollar policy continues, and the dollar becomes weaker, a sudden surge of liquidity in oil will happen given that it is almost a standard belief that commodities are a good inflation hedge."
Yes, this is a very basic, accurate outlook. Anyone would guess that a troop mobilization would increase demand for petrol.
Something of note and interest would be speculating that the long term effects of a price spike may lead countries such as America/China/India looking for economic substitutes causing lower demand and thus price in the long term. Essentially, what Cheeky's analysis misses is that this price spike would drive people away from using imported oil. I.E. The Natural Gas Act of 2009 would gain immediate popular support.
If a war breaks out, demand for oil will rise. Ok, yes, good point, but anyone could have come up with that.
The fact that I was censored only outrages me.
I see how ZeroHedge Operates:
Dissent is censored.
I bring up an attention deserving point.
Cheeky Bastard's post has an economic utility equal to that of a domesticated feline.
The jist of his ramble is simply that given supply disruptions the price of oil would increase, hampering the global economic recovery.
It is long winded, yet short on non-public information and meaningful analysis and insight.
"Hence the potential for, yet another, conflict in the Middle East is real."
Really? Anybody who has been reading the news for the last five years understands that the situation in Iran is inherently unstable and this condition adds to volatility in the price.
"So, it is my belief that the serious disruption, in the global oil prices, will occur for several reasons.
The current dollar policy conducted by the FED chairman Ben Bernanke has already influenced the rise in oil prices."
The devaluation of the dollar has lead to increased prices in the oil market, yes, thank you Cheeky.
"Whether those price increases were due to the sectoral inflation, or because the traders were just hoarding into that specific commodity due to the belief that the recovery is on the way, is unimportant."
Sectoral Inflation--as in the global recession, the demand for oil in particular increased and thus drove the price up? Wtf mate?
"What is important to know is that the stronger demand for oil will surely emerge IF the conflict arises, if for nothing else than for the demand which will be generated by both sides of that potential conflict. Also, if the FEDs dollar policy continues, and the dollar becomes weaker, a sudden surge of liquidity in oil will happen given that it is almost a standard belief that commodities are a good inflation hedge."
Yes, this is a very basic, accurate outlook. Anyone would guess that a troop mobilization would increase demand for petrol.
Something of note and interest would be speculating that the long term effects of a price spike may lead countries such as America/China/India looking for economic substitutes causing lower demand and thus demand in the long term. Essentially, what Cheeky's analysis misses is that this price spike would drive people away from using imported oil. I.E. The Natural Gas Act of 2009 would gain immediate popular support.
If a war breaks out, demand for oil will rise. Ok, yes, good point, but anyone could have come up with that.
The fact that I was censored only outrages me.
I thoroughly enjoyed reading your comment. As both you and Cheeky write better than my somewhat-less-than-funny style I can only encourage both of you to continue to contribute comments and works.