According to most sources, oil could soar to as much as $400 a barell (that’s over 2 3/4 TIMES its current price of $144 as of July 2) if Iran shuts down the Strait of Hormuz.
The problem is that Iran promised the world that it would do precisely that if Israel attempts to attack its nuclear facilities.
An impending Israeli attack is itself a result of the failure of liberalism. The European Union – in refusing to implement ANY truly tough sanctions against Iran – is forcing Israel’s hand. Liberals will decry “warlike” Israel, but will be those weak, gutless, spineless liberals who refused to stand up against Iran’s nuclear program in a meaningful way that are responsible – NOT Israel. When (note: not if) Israel strikes Iran, it will be doing so as an act of sheer survival against a country which has for years promised to wipe Israel off the map as soon as it possessed the means to do so.
Genuinely tough UN sanctions, combined with a united international stand against Iran being allowed to even come close to developing nuclear weapons, would have very likely had a good chance of success. But the liberal/socialist world never learns. We are repeating the failures that led up to the Iraq invasion, during which time rampant UN corruption (the oil for food program) and corrupt countries (Russia and France) opposed any sanction that would have forced Iraq to truly declare its WMD capabilities.
Teddy Roosevelt said America should speak softly and carry a big stick. Modern liberals argue that we should throw the stick away altogether and give holier-than-thou lectures.
The primary reason the United States assumed a strong foreign policy stance – and created a powerful military to back up its foreign policy – is because two world wars and millions of American deaths served to demonstrate the fact that enemy tyrants will make us pay dearly for being weak in the face of threats against us. Yet American liberals look longingly at the demilitarized socialist states of Europe, and at their laissez faire attitude toward despicable and vicious regimes, and they want to pursue a similar approach in the United States. The fact remains, however, that it was the strength and resolve of American power that permitted the Europeans to be free to embrace their new attitudes – first from the Nazi conquest and then from Communist expansion.
But let us put this gargantuan failure of liberal foreign policy aside and instead focus on another issue which is more important to most Americans (although certainly not to Israelis facing a new Holocaust at Iranian hands): the shockingly high prices that will most assuredly ensue when Israel attacks Iran’s nuclear sites.
About half the world’s oil supply flows through the Strait of Hormuz. It is about 25 miles wide, and provides Iran with a easy choke point to stop the oil flow.
A Jun. 11, 2008 Time Magazine story titled, “How Iran Has Bush Over a Barrel” puts the U.S.’s dilemma thusly:
If wasn’t crystal clear before it certainly should be by now: the Bush Administration can’t afford to attack Iran, even if it finds it necessary to do so for the sake of preventing the very real probability of World War III. With gas already at $4 a gallon and rising almost every day, Iran figuratively and literally has the United States over a barrel. As much as the Administration is tempted, it is not about to test Iran’s promise to “explode” the Middle East if it is attacked.
The Iranians haven’t been shy about making clear what’s at stake. If the U.S. or Israel so much as drops a bomb on one of its reactors or its military training camps, Iran will shut down Gulf oil exports by launching a barrage of Chinese Silkworm missiles on tankers in the Strait of Hormuz and Arab oil facilities. In the worst case scenario, seventeen million barrels of oil would come off world markets.
One oil speculator told me that oil would hit $200 a barrel within minutes. But Iran’s official news agency, Fars, puts it at $300 a barrel. I asked him if Iran is right, what does that mean?
“Four-dollar-a-gallon of gasoline only reflects $100 oil because the refiners’ margins are squeezed,” he said. “At $300, you have $12 a gallon of gasoline and riots in Newark, Los Angeles, Harlem, Oakland, Cleveland, Detroit, Dallas.”
But it didn’t have to be this way – even given gutless socialist Europe’s abject refusal to provide any real deterrant that would have made Iran think twice about continuing its nuclear ambitions.
Had Democrats allowed the United States to utilize its own massive oil resources, the United States would have been almost completely immune from this looming crisis. For information on the Democrat’s culpability in refusing to take advantage of our own energy independence, read my article available here.
The United States is literally sitting on about 170 billion barrels of oil, according to the Geological Survey and Congressional Research Service.
One of our best [short-term] prospects is Alaska’s Arctic National Wildlife Refuge, which geologists say contains billions [the official estimate is 15.6 billion] of barrels of recoverable oil. If President Clinton hadn’t bowed to Wilderness Society demands and vetoed 1995 [Republican-sponsored and supported] legislation, we’d be producing a million barrels a day from ANWR right now. That’s equal to US imports from Saudi Arabia, at $50 billion annually.
Instead, we are currently paying over $4.00 for a gallon of gas, and we are staring into the terrifying prospect of having to pay $12 for that gallon in the near future.
One day, untold years into the future, archaeologists and anthropologists will come to realize that political liberalism invariably resulted in the suicide of nations and of Western civilization in the 20th and 21st centuries. But tragically, that day of realization has not yet arrived. And so the United States trudges along on the same path once taken by the Dodo bird.
The dodo bird will be less responsible for its downfall than the United States. The dodo bird needed something for survival it didn’t have. The United states, by contrast, refused to use what it actually had in its possession even when it needed it.
Even if the United States and the world manages to dodge the looming confrontation between Israel and Iran, the price of international oil will continue to go up, and it will continue to be subject to one crisis after another as it is produced in and passes through the world’s most chaos-prone nations. Oil will become more and more scarce as China, India, and the developing world continue to gobble it up. And the price of gasoline will contine to rise.
And the dramatic rise of the price of gasoline does not just affect our travel plans. It is directly tied in with our national productivity and our economy.
In a AP story titled, “It’s official: The market is in bear territory: Stocks drop after oil hits new high, concerns that GM could run out of cash,” it was reported that:
NEW YORK – Wall Street resumed its sell-off Wednesday after oil hit a new record and a bearish analyst report renewed concerns that General Motors Corp. could run out of cash.
The stock market’s pullback, which accelerated in the final hours of the week’s last full trading session, left the Dow Jones industrial average officially in bear market territory, with the blue chips having fallen more than 20 percent from their October highs.
Oil surged to new records above $144 a barrel as the government reported a bigger-than-expected drop in U.S. supplies and as investors worried about tensions in the Middle East.
The July 1 DOW figures and analysis about those figures demonstrated how market performance was exactly proportional to the rise of the price of oil. Oil is the grease that lubes our entire market structure. More expensive oil makes virtually every product more expensive even as it cuts down on American’s individual purchasing power.
And the Demcorats have for decades now resisted any effort to produce a stable long-term source of domestic oil. Even in the aftermath of the OPEC embargo that ravaged our economy in the 1970s, Democrats have refused to allow the United States to separate itself from OPEC and other foreign oil.
Hopefully, Americans will recognize the threat that Democrats are to our economy, our security, and our way of life this November. If not, I can guarantee you that America will continue to suffer the consequences of rising fuel prices until it comes to its senses and elects enough Republicans to overturn the irrational Democrat-implemented drilling bans.
I only hope that we come to that moment of national lucidity before the next crisis strangles our weakening economy. If we do not act to ensure a stable domestic energy supply in the very near future, we may well find ourselves quickly bleeding to death and desperately needing a transfusion that will not come in time to save us.