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From the Providence Journal, Wednesday, July 16:
Last week, crude-oil prices tumbled by about $10 a barrel. Then Iran tested missiles that could at some point be used to deliver nuclear weapons to Israel, Europe or the United States, and the prices shot right back up, sending tremors through the world economy.
It's not just Iran. A Brazilian union of oil workers went on strike, threatening to cut crude supplies from that country, and Nigerian rebels pledged new attacks on oil platforms. But Iran is what is really spooking the markets. And for good reason.
There seem to be signs that Israel --fearful of a nuclear strike -- is preparing to bomb Iran to try to take out its capability to produce nuclear weapons. The Jerusalem Post reported that Israeli warplanes conducted maneuvers in Iraqi airspace, using U.S. bases in the country.
Iran, meanwhile, has been firing missiles as a show of strength, and warning that it would retaliate against any attack by blocking the narrow Strait of Hormuz, through which about 40 percent of the world's oil-tanker traffic goes.
Iranian leaders for years now have been promising the extinction of Israel and pushing ahead with their nuclear program. Some leading countries have responded with economic sanctions, and the Bush administration is trying to both calm and warn Iran through back channels. The trick will continue to be to figure out just how rational the Iranians are.
Iran's recent tests of long-range missiles are especially troubling. The nation's military is reportedly redesigning its Shahab-3 missile to accommodate a nuclear warhead. In one of the nightmare scenarios, being discussed in the Iranian press, Iran could detonate a nuclear weapon over the United States, sending out an electromagnetic pulse (EMP) that could fry its entire communications system.
Until the threat that Iran poses to the world can be substantially reduced -- one hopes through peaceful measures -- oil prices will probably soar, with grim implications for the world economy. |
