Tuesday, January 17, 2006

Consequences of Attacking Iran

Before the Bush Administration gets too gung ho about using military force against Iran, there are some things to consider, not the least of which is our over-extended military. The impact on oil and the economy might be the more crucial issue. Here's an analysis by Stuart Saniford of The Oil Drum:
I'd like to take a more careful look at exactly what kind of oil weapon President Ahmadinejad is packing. In particular, let's go over the seventies oil shocks and use them to fashion a rough guesstimate of the likely impact of a cutoff in Iranian oil supplies now.

To give you the punchline up front, I'm going to argue that, with large (50%) uncertainties, a complete loss of Iranian production for an extended period might be expected to roughly double oil prices and cause massive economic impacts, while a halving of oil production due to sanctions, or retaliation to sanctions, might be expected to produce a 30-40% increase in price and significant economic impacts. If Iran is left alone, prices are quite likely to drift up somewhat anyway, but not by this much.
The full article is well worth reading and includes graphs.



Blogger Craig said...

Google works in mysterious ways. This post was written in January and I've written perhaps a dozen or so posts since then on developments concerning Iran and the possible consequences of a bombing campaign .

If you're interested in reading more on Donkey Path, type in 'Iran' on the very top bar in the white space on the left and click on "search this blog" to get the latest developments (also see latest Sy Hersh article in The New Yorker).

9:13 PM  

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