Oil Price Warfare

Here's another good article, for anyone who hasn't seen it. In effect, we are less vulnerable to the 'oil weapon' than we have been in the past.

Excerpts -

"Certainly Iran’s leaders are unhinged enough to try making good on one of those two promises. Either action would send oil soaring, perhaps well over $100 per barrel. Gasoline would spike too, perhaps to $5 or $6 per gallon. The dirty little secret about Iran’s threats, however, is though they might cause some pain, they wouldn’t cripple our economy. The American economic engine is too strong to be brought to its knees by Iran’s machinations, and the weapon Tehran threatens to wield is not as menacing as they would have us believe.

"Energy Secretary Samuel Bodman noted recently that the United States could weather a hypothetical Iranian oil disruption and foil Tehran’s efforts at nuclear blackmail. The United States Strategic Petroleum Reserve currently holds upward of 700 million barrels. The Bush administration would not hesitate to release oil from the reserve if Iran closed its taps. That’s the sort of leverage we didn’t have during the 1973 energy crisis.

"Moreover, the economy is less dependent on oil today than during the Arab oil embargo. We truly are moving beyond the petroleum economy. More than 85 percent of the growth in U.S. energy demand in the last quarter century has been met by electricity, most notably in information technology and telecom. Today, nearly three of every five dollars of GDP come from industries and services that run on electricity. In 1950, just one in five dollars of GDP was electric; the remaining 80 percent of the economy was powered by petroleum. Oil is still vitally important to the American economy, of course, but each year it gets a little less so. And each year, we become more insulated from the sort of economic terrorism Tehran is proposing.

Link

 

Bush and Cheny are owned by the Saudis, not South American oil.

 

Yes, I imagine there are plenty of variables. The author of the piece pointed out some on the + side.