If President George W. Bush wants to boost Republican
chances of holding on to the White House and keeping Democratic gains in Congress
to a minimum in the November elections, he might consider taking an attack
on Iran before the end of his administration "off the table."
Of course, that's probably the last thing Bush and his particularly belligerent
vice president, Dick Cheney will do.
But there's a little doubt that forswearing military action against Tehran
should ease the upward pressure on world oil prices which hit a historic
high Monday of more than $143 per barrel before falling back to $140
and thus offer at least some reprieve to the U.S. consumer at a time when record
gasoline prices appear to be driving widespread popular dismay with the state
of the U.S. economy.
"[I]f this administration truly wanted to spare Americans further pain
at the pump, there is one thing it could do that would have an immediate effect,"
wrote Michael Klare, author of a new book, Rising
Power, Shrinking Planet: The New Geopolitics of Energy, in this week's
Nation magazine. "[D]eclare that military force is not an acceptable
option in the struggle with Iran."
While oil analysts say that prospects of a continuing decline in the dollar
no doubt played an important role in Monday's price jump, they also pointed
to this weekend's pointed reaction by the commander of Iran's Islamic Revolutionary
Guard Corps, Gen. Mohammed Ali Jafari, to recent U.S. and Israeli threats to
attack Tehran's nuclear facilities, as well as his assessment that those threats
should be taken seriously, as a major factor.
In addition to retaliating against any regional powers, presumably including
Israel, which take part in such an attack, Jafari warned that Tehran would
"definitely act to impose control on the Persian Gulf and Strait of Hormuz,"
after which, he added, "the oil price will rise very considerably, and
this is among the factors deterring the enemies."
Indeed, even without an attack, continuing tension involving Iran's nuclear
program will almost certainly contribute to a continued rise in oil prices
to as high as $170 a barrel in the coming weeks and months, OPEC's president,
Chakib Khelil, said during a conference in Madrid.
World oil prices have risen by nearly 50 percent since the beginning of 2008
and nearly doubled over the past year. Analysts have argued over how much of
that increase is due to structural factors in the world economy such
as growing demand in middle-income countries and the depreciating dollar that
would tend to make the price increase permanent and how much is related
to worries about possible supply disruptions arising from the kind of conflict
that has plagued the Niger Delta region in Nigeria, terrorist attacks by al-Qaeda
in the Gulf, economic or other sanctions against key oil producers, or war.
The latter risk factors, according to some analysts, could account for as
much as $50 of the total current price, although most believe that the figure
is about half that.
How much is due to the uncertainty about Iran is also a matter of considerable
debate. Many point to the unprecedented $11 one-day spike in oil prices
from $128 to $139 a barrel that took place June 6 after Israel's Deputy
Prime Minister Shaul Mofaz warned that an Israeli attack on Tehran's nuclear
facilities was "unavoidable" if international pressure did not succeed
in persuading it to freeze its uranium enrichment program.
While that incident offered the most spectacular suggestion of a relationship
between threats against Iran and the price of oil, most analysts believe the
effect is somewhat more modest, albeit still quite real.
"I don't think it would be unreasonable to say it could be a few dollars
[out of the current $140 a barrel]," Paul Saunders, an energy expert who
directs the Nixon Center, told IPS.
And in congressional testimony just last week, Daniel Yergin, a longtime analyst
and historian of the oil industry, observed, "You see the Iranians make
bellicose statement, and you see the price of oil go up five or seven
That is not a new pattern, according to Klare, who said the possibility of
a $100-a-barrel price first loomed nearly two years ago amid speculation during
the July-August war between Israel and Hezbollah that the conflict could spread
to Iran. At that time, the price hovered around $75 a barrel before falling
back to just over $50 a barrel in early 2007, its lowest point in the last
Even though the price retreated after Mofaz's remarks, events of the past
10 days have helped drive up the price to historic levels. These include the
publication of a front-page New York Times article about a massive Israeli
air exercise that purportedly simulated an attack on Iran, and a New Yorker
article by investigative journalist Seymour Hersh about a $400 million covert
action program directed against Tehran; and public warnings by U.S. hawks close
to Cheney's office that either the Israelis or the U.S. would attack Iran between
the November elections and the inaugural of a new president in January 2009;
as well as Jafari's weekend remarks.
Klare believes that the oil markets believe "there's at least a 50-percent
chance that the U.S. and/or Israel will attack Iran before Bush leaves office
and that Iran will retaliate [in ways]
that would push oil prices to
$200 a barrel and above" which is why speculators are buying oil futures
now at $140 and even $150 a barrel.
"The run-up in the price today will only encourage more speculators to
get into the act, unless the administration makes clear it has no intention
of attacking Iran and will force Israel to make a similar declaration, neither
of which is likely to occur," he told IPS.
Meanwhile, the voting public is clearly worried about where oil prices are
going. Seven out of 10 people told a Los Angeles Times/Bloomberg poll
last week that their families had suffered "financial hardship" as
a result of the price increases, and more than eight in 10 blamed the administration
for "not [having] done enough" to ease the impact.
According to a Pew Research Center poll taken earlier in June, three of four
voters believe gas prices will be "very important" in deciding who
to vote for a larger percentage than those who cite terrorism or the
Iraq war. By margins of nearly 20 percent, those same voters said they had
more confidence in Democrats and Sen. Barack Obama than they did in Republicans
and Sen. John McCain to deal with the issue.
That's one reason why most analysts rate the chances of an attack by either
country before the election as quite low. Others accept Jafari's logic that
the likely impact on oil prices before or after the elections make an attack
"I think one of the things that makes [an attack] a lot less likely is
what it will actually do to the oil price," said the Nixon Center's Saunders.
(Inter Press Service)