Energy prices continue their rise, and why not? They continue to get support from every quarter that determines their calculus. The round robin of factors is familiar to anyone that has paid attention to the rise: global security issues, unrelenting demand strength from Asian nations, and the weakness of the US dollar, among the financial levers.
The extensive speculation over a possible Israeli attack on Iran’s nuclear facilities set off a renewed speculative fervor over what a post-attack crude oil supply landscape would look like. It’s not pretty. Iran’s Foreign Minister, Manouchehr Mottaki spoke of a line of fire from Lebanon to Tehran, across the Middle East, in an attack’s aftermath. The shutting the Strait of Hormuz by Iran, disrupting one-fifth of world supplies, is a given, in the scenario analysis.
In a disappointment for the hopes of consumers, the energy market failed to take some obvious clues from Washington and the very same Iranian official. Diplomacy was clearly emphasized in all the various commentary of President Bush and others.