Would Iran Use The Oil Weapon?With WTI WTI West Texas Intermediate
WTI Western Transportation Institute (Montana State University)
WTI World Tribunal on Iraq
WTI With The Idea (used in chess to point to the idea behind a specific move) at $70/barrel or above and US retail gasoline at $6/gallon, Iran could use its oil as a weapon in the event of UN sanctions or US attack. Ian Bremmer Ian Bremmer (born November 12, 1969) is a political scientist specializing on US foreign policy, states in transition, and global political risk. He is president of Eurasia Group, a global political risk consultancy. , president of the Eurasia Group Eurasia Group is a global political risk consultancy, founded in 1998.
Eurasia Group has offices in New York, Washington, and London, with 100 full-time employees. and a senior fellow at the World Policy Institute wrote in the International Herald Tribune International Herald Tribune
Daily newspaper published in Paris. It has long been the staple source of English-language news for American expatriates, tourists, and businesspeople in Europe. of Aug. 27 that developed nations' reliance for energy on some of the world's most politically volatile states - Iran, Venezuela, Russia, Sudan - creates ideal conditions for "extortion" which favour "some of the world's most unsavory regimes".
From Wal-Mart's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. blaming lower-than-expected earnings on rising energy costs to reports that the IMF IMF
See: International Monetary Fund
See International Monetary Fund (IMF). foresees high oil prices helping to dampen growth prospects for the eurozone Eurozone
same as Euroland
Eurozone n → eurozona, zona euro
Eurozone n → zona euro , more and more analysts are warning that only the timing and the scale of the impact are now in doubt. Bremmer saw two reasons that oil had become an effective weapon. First, there is very little spare production capacity in global oil markets. Both OPEC OPEC: see Organization of Petroleum Exporting Countries.
in full Organization of the Petroleum Exporting Countries
Multinational organization established in 1960 to coordinate the petroleum production and export policies of its and major non-OPEC countries are producing at close to full tilt. Global markets are likely to remain tight for at least the next two or three years, and Chinese energy demand will continue to rise sharply. Even small interruptions in output put disproportionate upward pressure on oil prices. Second, "petro-states are rethinking their assumptions about the elasticity of global demand for oil". When oil sold for $30/b, they accepted the conventional view that substantial price hikes might lower demand - and hurt their bottom lines - as importing states actively looked for new sources of oil, energy alternatives and other ways to cut fossil-fuel consumption. Now that oil sells for well above $65/b, without a sharp drop in demand so far, energy exporting states are changing their minds.
Bremmer said: "Some now believe they can push the price still further and increase profits without a drop in demand. The danger is that these factors make it much more likely that an oil producing state with a political axe to grind Axe to grind
Used in context of general equities. Involvement in a security, whether through a position, order, or inquiry. will cut output to certain customers (or at least threaten to do so), essentially take a small amount of oil off the market, and profit from the resulting price hike. This sharply increases the market power - and political leverage - of oil-exporting states, even for marginal producers. That makes diplomatic disputes with these countries more difficult to resolve. In fact, it's already happening".
Iran's new President Mahmoud Ahmadi-Nejad says he mistrusts Western states and that Iran will continue to develop its nuclear programme. Bremmer warned that if Iran was referred to the UN Security Council, it "may threaten to divert oil exports away from countries that support the United States (Japan and Britain, in particular)". Iran's Supreme Leader Ayatollah Ali Khamenei "may be less interested in market stability than in achieving political and security goals". Bremmer added: "So when Iran says it has options if the Bush administration chooses to escalate the conflict, it may well be right. Of course, if Iran overplays its hand, it raises the probability of a US or Israeli strike on an Iranian nuclear facility. That eventuality would certainly push oil prices higher. Even if it becomes obvious that energy prices are slowing global growth, there may be little oil-dependent states can do in the short term..."