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.