Military move on Iran could triple oil price
WASHINGTON (Reuters) - World oil prices could triple if the diplomatic standoff over Iran's nuclear program escalates into a military conflict, Saudi Arabia's ambassador to the United States said on Tuesday.Gasoline at more that $6.00 a gallon would most certainly result in Bush beating out Richard Nixon in the negative approval rating race. The Iranian's weapon of economic destruction is the Strait of Hormuz.
Assuming oil prices were at current levels near $70 a barrel at the time of an attack, "You would see that (oil price) perhaps double or triple as a result of the conflict," Prince Turki Al-Faisal said at a press conference hosted by the United States Energy Association.
"The idea of somebody firing a missile at an installation somewhere will shoot up the price of oil astronomically," Al-Faisal said.
Because all Middle East producers depend on the Strait of Hormuz to get their oil to market, military action in Iran would jeopardize the entire region's oil flows, Al-Faisal said.The Saudis also worry about increased attacks on their own oil facilities, if not by the Iranians then pro-Islamic terrorists.
Oil flows through the strait account for roughly two-fifths of all globally traded oil, according to the U.S. Energy Information Administration.
Some 17 million barrels of oil are carried through the narrow channel on oil tankers every day, according to the International Energy Agency.
If there was an attack on Iran, "the whole Gulf will become an inferno of exploding fuel tanks and shot up facilities," Al-Faisal said.