Friday, March 31, 2006

Greens confused

Frog blog comments
Oil crisis, anyone? Lets hope everyone keeps cool heads over Iran’s nuclear programme and keeps on talking. According to these comments by Iranian general Rahim Safavi of the paramilitary revolutionary guards, any military action against Iran would result in Iran blocking the Straits of Hormuz, a vital gateway for global oil exports. Juan Cole’s website indicates that this could be done by sinking one oil supertanker.

But haven’t they just lost track of the big picture here?
blocking the Straits of Hormuz would just push up oil prices - it would effectively be a very simple and very fair global carbon tax (hopefully not via sinking a ship of course - that would be messy).
An environmentalist should consider an Oil crisis to be when oil is cheep (and thus lots of it get's burnt therefore global warming occurs and peak oil point get's closer etc etc) not when there is a drop in supply a drop in supply would be REALLY GOOD.

Of course I am even more in favour of this because I have advocated supply side targeting of the problem for a long time. the basic point is Iran blocking the Straits of Hormuz and cause a massive rise in the price of oil doing something that is easy and takes almost no time at all. Meanwhile Europe can slash it's consumption and just make oil a little cheaper for china so they can increase their usage.
the former strategy works well at little cost the latter strategy works badly at great cost.

The problem the greens have is that they oppose the US and support underdogs – it is hard to stop and think that the underdogs bluff might be something you want to call.


Blogger maksimovich said...

Here the greens are very confused and show their interpretation of FO is akin to playground gossip.

Firstly there is alternative pipeline capacity across the Arabian peninsula that are a viable logistitcal alternative.

Secondly the Shanghai cooperation countries,and the central eurasian securtiy pact warned the EU and US that military intervention was not an option.

Lavrov summoned Mottaki to Moscow and issued a similar warning,that any unilateral military action or disturbance in the region will be viewed as an act of terrorism and would invoke powerful sanctions .

Iran is very dependent on energy imports paradoxically.It requires light crudes for its refineries.gas to operate them and for the northern cities,water,and electricity.These they are dependent on the central eurasian pact countries.China has viable alternatives,

Iran is again back to the table for negotiations.

9:17 PM  
Blogger Genius said...

Yes I think it would be a very illogical decision by iran (and even iran probably isn't that ilogical), and attacking iran on that basis would be quite a dangerous decision also.

Of course IF (and that's a big if) it happened - just the fact that both iran and the us/eu lost touch with reality would serve to push oil price through the roof.

2:08 PM  
Blogger Sean said...

Two points. One) The Straits of Hormuz can't be blocked by sinking one supertanker. Two) They'd have to take on the USN to close them - and they'd lose that fight big time!

5:58 PM  

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