From Maurice Winn:
in 1984 I was looking after bitumen for BP Oil New Zealand and there was threat of the Straits of Hormuz being shut, disrupting supplies, which caused me no end of stress, which I already had enough of, so I'm well aware of the downstream effects of that happening.
When Islamic Jihad is on the ramage, or other megalomaniacs, such costs are incurred, or worse and that's just life in Hobbesian conditions, which is what megalomaniacs live for.
If the straits of Hormuz were indeed shut, it would not be a one way street of harm. In recent times, I have concluded that the harm to Iran and those inside those straits would be far worse than to those outside those straits.
In fact, if supplies had been cut, I would have allocated what bitumen we had [probably by rationing on past demand rather than by price, which I would prefer to do] and then got on with doing other things while waiting for supplies to be re-established.
Roading contractors would have had to earn a living doing something else. Roads would have deteriorated somewhat. But still would have been passable, albeit somewhat lower in quality.
On fuel supplies, people could catch a bus, share a car, trade in their SUV for something little, like a bicycle, walk, move closer to work, work from home, do without, forget malls.
But Iran would NOT want to go without their cash flow.
Wealthy people are far more able to cut back than are poor people. The USA is wealthy beyond normal humanity's imaginings. Iran is full of poverty or would be with the oil taps turned off and a blockade in place.
Never mind worrying about Iran shutting the straits, they should worry more about the USA shutting the straits, or, more likely letting through other shipping but stopping Iranian exports. I'm sure there would be some shipping owners and crews who for enough money and USA protection would love to run the Iranian gauntlet.
Sure, a few tankers might be hit, but the crews would invariably survive as the crew department is a small part of a super-tanker [though perhaps the tall part of the ship would be the target zone for aerial attack rather than torpedo].
I don't think the leverage over the USA by shutting the straits is as great as Islamic Jihad fantasy and SUV owners' worries would suggest. When push comes to shove, catching a bus or hitching a lift is a LOT less problematic than going hungry for a long time - tractors in Iran need fuel and with a few refineries in Iran being put out of commission, fuel supplies in Iran would run low soon enough.
Iran shouldn't miscalculate that the problems in Iraq mean that they can play fast and loose as they have been doing.
Also, the Stratfor report on Israel's very brief conflict with Hezbollah seems absurdly defeatist. I think I'd be doing much as Israel appears to be = probe, find response, withdraw, call in an air strike, probe again and see if the target is softer, call in another air strike if not. One at a time, bit by bit. To avoid personal harm and to minimize civilian harm and general damage. That will take time but will be horribly costly for Hezbollah.
Plus, I'd be inclined to call a spade a spade and demonstrate to Syria and Iran that if they want to get involved, then it will cost, directly. Iran has already declared total war and total destruction on Israel, and has had that idea for a long time, so it's not a passing fancy. So there is no worry about "enraging" them. They are already off their trolley with hatred for Jews and Israel. Might as well blow up where the President was last seen. And, where he is expected to be next. I suppose Israel could do that with their current equipment. If not, maybe the USA could sell them something that would do the job. Or maybe just do it directly, after all, it's pretty clear that the USA is either with Iran or against it and they don't seem to be with it.
Islamic Jihad means business and it's head-hacking business of anyone they can get hold of who doesn't kowtow to their superstitious edicts. A knife through the neck and into the chest of a Van Gogh and a school full of dead children in Beslan and a swarm of people bombed in Bali and Twin Towers destroyed shows their mania around the world. Going nuts over some Danish cartoons which quite accurately depicted their mania showed how absurd they are.
Now that I don't have to deal with bitumen sales, I'm happy to see the Straits of Hormuz shut [to Iranian shipping anyway] and see just who feels the squeeze the most. It's much better than actually blowing people up. Funny if both Iran and the USA decide that the straits should be shut, though I guess China would like to have Iran's hydrocarbons continue to flow to them and wouldn't be happy with a blockade. And Iran and China would quite like to stop Saudi, Kuwaiti and Iraqi shipments to the USA.
If Hezbollah didn't want Israel to attack them [and parts of Lebanon from which they operate], then they shouldn't have raided Israel. It's not much use whining about being attacked after conducting attacks.
$100 a barrel? Big deal. That's not a lot for a peak. A good shortage would see it go higher than that, for a while. In 1974 it quadrupled, and quadrupled again in 1979. But nothing serious happened. Then, oil was a LOT bigger part of USA GDP. So, $100 a barrel after a decade of $30 a barrel is nothing to worry about. That wouldn't double the pump price which people continue to pay without a lot of distress - they still buy smokes, booze, and weigh over 100 kg.
When there's less worry about obesity, you'll know the fuel price is starting to squeeze.
Mqurice |
