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Could the world handle an Iranian oil crisis?

  02/01/2012

Lately, oil markets have been jittery over fears that Europe’s new embargo on Iran could spark tensions in the Persian Gulf. So how would the world cope with an Iranian oil crisis, if it came to that? A new paper explores our options — and none of them are pleasant.

In theory, the E.U.’s embargo on Iranian oil imports, set for July, is supposed to cut into Iran’s finances without cranking up the price of crude too high. “The idea here,” says Robert McNally, president of the Rapidan group, “is that if Iran’s other customers, like China and India, see that Iran is prohibited from selling 20 percent of its crude to Europe, those countries now have leverage to bargain down the price” of the leftover oil. So the sanctions depend on China and India flouting the embargo, but forcing Iran to take a loss. Europe and the United States hope this will all go smoothly. One big worry, though, is that Iran responds by lashing out — say, by trying to block the Strait of Hormuz, where 35 percent of the world’s seaborne oil passes through. That’s a big “if.” But it would make life excruciating for everyone.

As McNally details in a new report (pdf) for the Council on Foreign Relations, a serious and prolonged disruption of the Strait of Hormuz would dwarf the oil crises of the 1970s — there’s just so much more oil at stake here:

In the truly apocalyptic scenario, McNally estimates, a complete cut-off of the 17 million barrels of oil that pass through the straits each day could cause the price of oil to rise as high as 320 percent — which would “likely tip the global economy into recession.” Now, it’s unlikely the U.S. would allow that to happen. But even lesser disruptions (if, say, Iran started harassing ships or decided to cut off some of its exports) could push the oil price up $20 or $40 or more — the sort of spike that could really put the brakes on economic growth.

So how would the world handle an Iran-related oil shock? McNally considers a couple of options, none of them perfect:

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Filed under politics economy oil markets Iran Iranian oil crisis Europe United States Persian Gulf EU embargo on Iranian oil imports China India Strait of Hormuz

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State of Denial in Coming War Catastrophe

By Greg Hunter’s USAWatchdog.com

30 JANUARY 2012

The world economy is in the tank, and the Federal Reserve’s decision to extend its zero interest rate policy to, at least, the end of 2014 proves it.  What will happen if the fragile world economy also has to deal with a war with Iran?  That should have been the big headline coming out of the World Economic Forum in Davos, Switzerland, but what was reported was concern over slow or no growth in the world.  All the signs are that the West is careening towards war with Iran, and there is not a peep about it from world leaders.  Are they in a state of denial in a coming war catastrophe?  I say yes. 

One of the first shots fired by the EU was in the form of increased sanctions to boycott Iranian oil in about five months.  The second shot looks like it will be fired by the Iranians who won’t wait for sanctions to kick in and will move to cut off oil exports of around 600,000 barrels a day to the Eurozone.  (Click here for more on this story.)  The Iranians have not yet cut off the oil.   MSNBC reported yesterday, “The Islamic Republic declared itself optimistic about a visit by U.N. nuclear experts that began on Sunday but also warned the inspectors to be “professional” or see Tehran reducing cooperation with the world body on atomic matters.  The International Atomic Energy Agency (IAEA) inspection delegation will seek to advance efforts to resolve a row about nuclear work which Iran says is for making electricity but the West suspects is aimed at seeking a nuclear weapon.”  (Click here to read the latest CNBC story.) 

The immediate cut off of oil to the EU would be a disaster, and the Iranians do not have to close the Strait of Hormuz to do it.  This would cause major pain to a European economy teetering on the brink of collapse.  How well do you think the Eurozone would perform with a spike in energy prices?  Talk about no growth, how about a giant contraction and an implosion of some of the biggest banks on both sides of the Atlantic.  This is not all out war, mind you, just an immediate cut of Iranian oil to Europe.   

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Filed under politics economy war Iran United States Europe Iranian oil Strait of Hormuz Islamic Republic Federal Reserve World Economic Forum

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As ACTA Gets Signed, Europeans Protest
Chris Richardson | January 27, 2012

At a ceremony in Tokyo, Japan, more members of the European Union signed ACTA (Anti-Counterfeiting Trade Agreement), ratifying the treaty for the countries that signed it. However, because the European Union parliament has yet to weigh in, ACTA is not currently binding, as in, it’s not a “global law,” yet, anyway.
The European Union parliament, according to The Guardian, is scheduled to debate ACTA (pdf) this summer.
Procedural processes aside, it’s clear the treaty has a coalition of support as international governments race to apparently rescue the downtrodden entertainment industry, masked in a treaty of intellectual property protection. Speaking of masks, there has been some push-back from EU citizens in a number of areas, including Poland and France.
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As ACTA Gets Signed, Europeans Protest

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At a ceremony in Tokyo, Japan, more members of the European Union signed ACTA (Anti-Counterfeiting Trade Agreement), ratifying the treaty for the countries that signed it. However, because the European Union parliament has yet to weigh in, ACTA is not currently binding, as in, it’s not a “global law,” yet, anyway.

The European Union parliament, according to The Guardian, is scheduled to debate ACTA (pdf) this summer.

Procedural processes aside, it’s clear the treaty has a coalition of support as international governments race to apparently rescue the downtrodden entertainment industry, masked in a treaty of intellectual property protection. Speaking of masks, there has been some push-back from EU citizens in a number of areas, including Poland and France.

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Filed under ACTA Anonymous EU EU citizens EU parliament Europe European Union parliament Internet censorship Internet freedom activism control of information freedom politics protest

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Out of Chaos, Order: Now IMF Seeks Collective, World Bail-Out of Europe

Friday, December 16, 2011

IMF wants the world to save Europe … Christine Lagarde, the managing director of the IMF, said the escalating crisis now needed to be addressed as “collectively as possible” … The European financial crisis is “escalating” and is so serious that it is unlikely to be solved by eurozone countries alone, the head of the International Monetary Fund warned Thursday night. British taxpayers are now likely to be involved in an internationally co-ordinated bail-out led by the International Monetary Fund [IMF] for countries in the single currency. Christine Lagarde, the managing director of the IMF, said the escalating crisis now needed to be addressed as “collectively as possible”. Without action, the world faces the spectre of a 1930s-style depression, she said. – Montreal Gazette/UK Telegraph

.  .  .  both European and non-European countries will be asked for more money. "What is happening now is that conversations, contacts are taking place between the fund and its membership about the scale and the amount in which this could be brought to a conclusion," according to an IMF spokesperson.

And so it builds. Suddenly the IMF, which the powers-that-be have already designated as a kind of world central bank, is in charge of collection efforts to save the EU. In fact, the EU doesn’t need salvaging, nor does the euro. If both foundered and failed, the world would pause for a few moments and then go on.

Conclusion: But without a crisis there can be no further centralization. And without further centralization there can be no world government. And so it goes.

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Filed under politics IMF world government creating crisis UN fear tactics loss of freedom central banks central banking fiat currencies manufactured crises Christine Lagarde euro Europe eurozone crisis centralization of power

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The EU: Broken or just broke?

Decision time for the EU

FOCAL POINT: When the global financial crisis broke at the end of 2008, Europe’s leaders complacently maintained that the problem was an Anglo-Saxon one. Now, with trillions potentially having to be poured into national economies too big to fail – Greece, Ireland, Portugal, even Italy and Spain – the eurocrisis is threatening to overshadow the original banking collapse of 2008.

Brought on by the global economic recession, the eurocrisis has been exacerbated by serious faults built into the institutional structure of the monetary union. The non-existence of centralized political control over the European economy combined with lack of democratic legitimacy sets in motion processes that are undermining European solidarity.

In a new Eurozine focal point, published in cooperation with the Allianz Kulturstiftung, contributors discuss whether the EU is not only broke, but also broken – and if so, whether Europe’s leaders are up to the task of fixing it.

More here »

Filed under politics economy Europe euro eurozone crisis European economy

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As you watch this video and listen to Assange take note of how unlike a politician he speaks. His words and mannerisms are not filtered through a desire and need for votes, which are the major motivating forces of most politicians. It is important that we all begin to recognize sincerity and lack of it when we listen to the powerful of this and other nations. Assange has it; Obama does not.

Assange: Superpower takeover of Libya a lesson to world

Uploaded by RussiaToday on Oct 8, 2011

Wikileaks founder Julian Assange was among much anticipated speakers at mass protest in London calling for end to war in Afghanistan and foreign troops pullout. RT managed to talk to him about the military interventions and the Libyan conflict in particular.

Filed under politics war Libya Libyan war United States US Europe Assange Julian Assange video superpower Wikileaks

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