U.S. Military Surrounds Iran

Earlier in the week, the Pentagon confirmed that an unusually large fleet of U.S. warships had indeed passed through Egypt’s Suez Canal en route to the Persian Gulf. At least one Israeli warship reportedly joined the American armada. There are also Israeli nuclear armed submarines.

Three German-built Israeli submarines equipped with nuclear cruise missiles are to be deployed in the Gulf near the Iranian coastline.

The first has been sent in response to Israeli fears that ballistic missiles developed by Iran, Syria and Hezbollah, a political and military organization in Lebanon, could hit sites in Israel, including air bases and missile launchers.

The submarines of Flotilla 7 — Dolphin, Tekuma and Leviathan — have visited the Gulf before. But the decision has now been taken to ensure a permanent presence of at least one of the vessels.

Iran exported 2.6 million bb/d a year in 2008. Most of this oil goes to Japan, China, India and South Korea.

That said, oil is a fungible commodity. If the countries that are accustomed to getting Iranian oil no longer do so, they must buy it on the open market.

And this will drive up the price.

Will the price of oil more than double, as it did in 1990?

Could it hit $150 a barrel?

Energy and Capital