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Politics, religion, and culture where East meets West

Iranian oil empire?

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Is Iran, despite economic sanctions, still fashioning itself into the up-and-coming Middle Eastern oil empire? With a chokehold on the strategic Strait of Hormuz; oil smuggling avenues in Iraq worth $20 million a day; Russian, Chinese, and Indian support; and the upcoming cold shoulder to the petrodollar scheduled for March 20th, it certainly seems a possibility.

Now, with that in mind, take into account this carefully orchestrated duo of recent news events:

3/2/12: “Iranian Saudi pipeline explosion claim boosts price of crude”

Brent crude jumped $5.74 to $128.40 per barrel in New York on March 1 after a report on an Iranian state-run news channel that a pipeline had exploded in Saudi Arabia. This was the highest price since July 2008, but prices fell back slightly after Saudi officials denied the reports.

3/3/12: “Iran discovers giant oil field in south”

Iran has discovered one of its biggest oil fields with high quality crude in a southern province, the semi-official Mehr news agency quoted an official as saying on Saturday.

The first event demonstrates Iran’s acknowledgement of—and apparent disregard for—the fragility of the global oil market. While they are most certainly only “keeping up appearances” by haphazardly spreading such rumors, Iran wants everyone to know that, with EU default looming, it holds the cards to Mutually Assured (Economic) Destruction—no nukes needed.

The second event fills in the gap, as if to say: “Sanctions? What sanctions? For anyone who agrees not to trade in dollars (BRICS nations especially welcome), there’s a secure future in Iranian oil.”

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Written by M. James

March 5, 2012 at 1:52 am

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