A key amendment to the National Defense Authorization Act signed by United States President Barack Obama on the last day of 2011 -- when no one was paying attention -- imposes sanctions on any countries or companies that buy Iranian oil and pay for it through Iran's central bank. Starting this summer, anybody who does it is prevented from doing business with the US.
This amendment -- for all practical purposes a declaration of economic war -- was brought to you by the American Israel Public Affairs Committee (AIPAC), on direct orders of the Israeli government under Prime Minister Benjamin "Bibi" Netanyahu.
Torrents of spin have tried to rationalize it as the Obama administration's plan B as opposed to letting the Israeli dogs of war conduct an unilateral attack on Iran over its supposed nuclear weapons program.
Once again displaying a matchless capacity to shoot themselves in their Ferragamo-clad feet, governments in the European Union (EU) are debating whether or not to buy oil from Iran anymore. The existential doubt is should we start now or wait for a few months. Inevitably, like death and taxes, the result has been -- what else -- oil prices soaring. Brent crude is now hovering around $114, and the only way is up.
Get me to the crude on time
Iran is the second-largest Organization for Petroleum Exporting Countries (OPEC) producer, exporting up to 2.5 million barrels of oil a day. Around 450,000 of these barrels go to the European Union -- the second-largest market for Iran after China.
The requisite faceless bureaucrat, EU Energy Commissioner Gunther Ottinger, has been spinning that the EU can count on Saudi Arabia to make up the shortfall from Iran.
Any self-respecting oil analyst knows Saudi Arabia does not have all the necessary extra spare capacity. Moreover, and crucially, Saudi Arabia needs to make a lot of money out of expensive oil. After all, the counter-revolutionary House of Saud badly needs these funds to bribe its subjects into dismissing any possibility of an indigenous Arab Spring.
Add to it Tehran's threat to block the Strait of Hormuz, thus preventing one-sixth of the world's oil and 70% of OPEC's exports from reaching the market; no wonder oil traders are falling over themselves to lock up as much crude as they can.
Forget about oil at an accessible $50 or even $75 a barrel. The price of oil may be destined to soon reach $120 a barrel and even $150 a barrel by summer, just as in crisis-hit 2008. OPEC, by the way, is pumping more oil than at any time since late 2008.
So what started as an Israeli-concocted roadside improvised explosive device has now developed into a multiple economic suicide bombing targeting whole sections of the global economy.
No wonder the chairman of the Iranian parliament's national security and foreign policy commission, Ala'eddin Broujerdi, has warned that the West may be committing a "strategic blunder" with these oil sanctions.
Translation: as it goes, the name of the game for 2012 is deep global recession.
Obama rolls the dice
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