Republicans see rising oil and gasoline prices as an opportunity to score political points on President Obama. To be sure, Obama is partly responsible for the rise in world prices and could do something about it. The irony is that Republicans would emphatically oppose the one measure that would be most effective in easing the pressure on prices right now: defusing tension in the Middle East by taking the war threat against Iran off the table.
Tension in the Middle East tends to push prices up, because the threat of war puts this major oil region under a darkening cloud of uncertainty. With Iran the tension is even greater because it is located on the Strait of Hormuz, a narrow waterway between the Persian Gulf and the Gulf of Oman, 21 nautical miles at its narrowest point. Roughly 20 percent of the world’s oil moves through the strait, which is key for getting oil from the gulf countries to the rest of the world.
Iran has threatened to mine or close the strait in retaliation for an attack by Israel or the United States. The danger to oil tankers traversing the strait would shoot insurance prices through the roof, and the price of oil would follow as the supply diminished.
Since American and Israeli war talk directed at Iran is undoubtedly responsible for much of the recent price rise, it stands to reason that ceasing that talk convincingly would take the pressure off and would allow prices to fall again.
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Sheldon Richman (photo)