WASHINGTON - If United States President George W Bush wants to boost Republican
chances of holding on to the White House and keeping Democratic gains in
Congress to a minimum in the November elections, he might consider taking an
attack on Iran before the end of his administration "off the table".
Of course, that's probably the last thing Bush - and his particularly
belligerent vice president, Dick Cheney - will do.
But there's little doubt that forswearing military action against Tehran should
ease the upwards pressure on world oil prices - which hit a historic high on
Monday of more than US$143 per barrel before, falling back to $140 - and thus
offer at least some reprieve to the US consumer at a time when record gasoline
prices appear to be driving widespread popular dismay with the state of the US
economy.
"[I]f this administration truly wanted to spare Americans further pain at the
pump, there is one thing it could do that would have an immediate effect,"
wrote Michael Klare in this week's Nation magazine and author of a new book, Rising
Power, Shrinking Planet: The New Geopolitics of Energy. "[D]eclare that
military force is not an acceptable option in the struggle with Iran."
While oil analysts say that prospects of a continuing decline in the dollar no
doubt played an important role in Monday's price jump, they also pointed to
this weekend's pointed reaction by the commander of the Iranian Revolutionary
Guards Corps, General Ali Jaafari, to recent US and Israeli threats to attack
Tehran's nuclear facilities, as well as his assessment that those threats
should be taken seriously, as a major factor.
In addition to retaliating against any regional powers, presumably including
Israel, which take part in such an attack, Jaafari warned that Tehran would
"definitely act to impose control on the Persian Gulf and Strait of Hormuz",
after which, he added, "the oil price will rise very considerably, and this is
among the factors deterring the enemies."
Indeed, even without an attack, continuing tension involving Iran's nuclear
program will almost certainly contribute to a continued rise in oil prices to
as high as $170 a barrel in the coming weeks and months, the Organization of
Petroleum Exporting Countries' president, Chakib Khelil, said during a
conference in Madrid.
World oil prices have risen by nearly 50% since the beginning of 2008 and
nearly doubled over the past year. Analysts have argued over how much of that
increase is due to structural factors in the world economy - such as growing
demand in middle-income countries and the depreciating dollar that would tend
to make the price increase permanent - and how much is related to worries about
possible supply disruptions arising from the kind of conflict that has plagued
the Niger Delta region in Nigeria, terrorist attacks by al-Qaeda in the Gulf,
economic or other sanctions against key oil-producers, or war.
The latter risk factors, according to some analysts in Washington, could
account for as much as $50 of the total current price, although most believe
that the figure is about half that.
How much is due to the uncertainty about Iran is also a matter of considerable
debate. Many point to the unprecedented $11 one-day spike in oil prices - from
$128 to $139 a barrel - that took place on June 6 after Israel's Deputy Prime
Minister Shaul Mofaz warned that an Israeli attack on Tehran's nuclear
facilities was "unavoidable" if international pressure did not succeed in
persuading it to freeze its uranium-enrichment program.
While that incident offered the most spectacular suggestion of a relationship
between threats against Iran and the price of oil, most analysts believe the
effect is somewhat more modest, albeit still quite real.
"I don't think it would be unreasonable to say it could be a few dollars [out
of the current $140 a barrel]," Paul Saunders, an energy expert who directs the
Nixon Center here, told Inter Press Service (IPS).
And in congressional testimony last week, Daniel Yergin, a long-time analyst
and historian of the oil industry, observed, "You see the Iranians make a ...
bellicose statement, and you see the price of oil go up $5 or $7."
That is not a new pattern, according to Klare, who said the possibility of a
$100-a-barrel price first loomed nearly two years ago amid speculation during
the July-August war between Israel and Hezbollah that the conflict could spread
to Iran. At that time, the price hovered around $75 a barrel before falling
back to just over $50 in early 2007, its lowest point in the past 18 months.
Even though the price retreated after Mofaz's remarks, events of the past 10
days have helped drive up the price to historic levels. These include the
publication of a front-page New York Times article about a massive Israeli air
exercise that purportedly simulated an attack on Iran, and a New Yorker article
by investigative journalist Seymour Hersh about a $400-million covert action
program directed against Tehran; and public warnings by US hawks close to
Cheney's office that either the Israelis or the US would attack Iran between
the November elections and the inaugural of a new president in January 2009; as
well as Jaafari's weekend remarks.
Klare believes that the oil markets believe "there's at least a 50% chance that
the US and/or Israel will attack Iran before Bush leaves office and that Iran
will retaliate [in ways] ... that would push oil prices to $200 a barrel and
above", which is why speculators are buying oil futures now at $140 and even
$150 a barrel.
"The run-up in the price today will only encourage more speculators to get into
the act, unless the administration makes clear it has no intention of attacking
Iran and will force Israel to make a similar declaration, neither of which is
likely to occur," he told IPS.
Meanwhile, the voting public is clearly worried about where oil prices are
going. Seven out of 10 people told a Los Angeles Times/Bloomberg poll last week
that their families had suffered "financial hardship" as a result of the price
increases, and more than eight in 10 blamed the administration for "not
[having] done enough" to ease the impact.
According to a Pew Research Center poll taken earlier in June, three of four
voters believe gas prices will be "very important" in deciding who to vote for
- a larger percentage than those who cite terrorism or the Iraq war. By margins
of nearly 20%, those same voters said they had more confidence in Democrats and
Senator Barack Obama than they did in Republicans and Senator John McCain to
deal with the issue.
That's one reason why most analysts rate the chances of an attack by either
country before the election as quite low. Others accept Jaafari's logic that
the likely impact on oil prices before or after the elections makes an attack
improbable.
"I think one of the things that makes [an attack] a lot less likely is what it
will actually do to the oil price," said the Nixon Center's Saunders.
Jim Lobe's blog on US foreign policy, and particularly the
neo-conservative influence in the Bush administration, can be read at http://www.ips.org/blog/jimlobe/.
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