Saturday, April 22, 2006

Iran: Oil Shock Epicenter

Shadowland: Pumping Irony, 21 April 2006
Iran is behind the soaring price of gasoline—and not for the first time.

... Before we get that far, it’s worth considering that Iran’s assertiveness in regional and world affairs seems, quite literally, to follow the market. When the Shah depended on the CIA in 1953 (and the barrel of oil was priced in pennies) he was a more-or-less craven ally. Two decades later, flush with petro-dollars, he was a raving imperialist, who later started Iran’s nuclear program. So, too, with the mullahs. When oil prices were astronomical in the early 1980s, ayatollahs were looking to spread their revolution far and wide. When the price had sunk to about $10 a barrel in the late 1990s, reformists were ascendant in Tehran, and wanted to accommodate the West almost any way they could.

More recently, on the nuclear front, when the mullahs agreed to freeze their enrichment research in 2003, the average price of oil was about $30 a barrel. They again started up nuclear fuel enrichment activities—the same process that can be used to make fissionable material for atomic weapons—last year when the price of oil had reached $50. By the time they announced earlier this month that they’d succeeded with enrichment, oil prices were on their way to $70. Tensions drive up the cost of oil, international pressure inspires Iranian nationalism and increased revenues underwrite the mullahs’ ability to resist. ...


And since this column appeared yesterday, as it happens, oil topped $75 a barrel.

Meanwhile, my friends in California were quick to send updates about prices there:

David:
"I'm paying $3.05 at Costco."

Andrew:
"In the past 5 days the price of gasoline at my local Arco station has risen from $2.92 to $3.05 -- and Arco is owned by British Petroleum, which presently gets NONE of it's oil from the Mideast."

Alejandro: "AAA calculates the average national price of a gallon of regular gas today as $2.85. In Beverly Hills, one station was selling it for $4.04, but I think that included the botox."
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