Oil Price
Crude Oil Graph Heating Oil Graph Natural Graph Gold Graph
Contributed By : Energy Hedge Fund SyndicatePublished : 8th Dec 2009

The Continuing Saga of Iran's Nuclear Build-Up

History was made about ten days ago in Vienna at a meeting of the International Atomic Energy Agency when China and Russia voted along with the United States to sanction the Islamic Republic of Iran over its continued pursuit of nuclear energy. Iran, it is believed, intends to develop the technology to produce weapons of mass destruction. So say Western nations. Iran, of course denies all such accusations, claiming its nuclear program is intended solely for peaceful purposes.

What is “historic” in this context is the fact that both Russia and China saw eye to eye with the United States over Iran; indeed a diplomatic first. But what remains far from being historic in this case is the reason that pushed Russia, China and the United States to agree – for once -- over a major issue in foreign politics: simply put it has to do with oil; oil from Iran.

Or more precisely, the threat that the flow of oil from Iran could stop or be seriously hampered if Iran were to pursue its nuclear program. 

The answer is the Israel factor.  Israel sees Iran acquiring nuclear weapons as nothing less that an existential threat.  Whether the threat is real or imaginable is actually irrelevant in this case, what matters is that Israel considers itself under attack, or liable to attack, and the survival of its people in question.  And when a country considers an issue to be affecting its very existence, all discussion is worthless. What counts is action. 

The Jewish state fears that it is only a matter of time before Iran, once it has nuclear weapons, will be tempted to use them against Israel. Israel believes (and one may add, with good reason) that if Iran were to develop weapons of mass destruction it could deploy them against Israel, or, possibly pass on some of the components of a nuclear weapon to one of its Arab proxies. Those groups in turn could “weaponize” the nuclear material and deploy it against Israel. 

Is this paranoia on Israel’s part? Hardly. Israel has good reason to worry. It has one such group on its northern border, Hezbollah, and another, Hamas on its southern border.
 
While both borders are well defended, and protected by armed troops and all sorts of fancy electronic gadgetry, both the frontier with Lebanon and the one with Egypt are far from impenetrable. Hamas has a huge network of secret tunnels it has burrowed under the frontier post through which it smuggles everything it needs in from Egypt.

And doubtlessly, Hezbollah must be emulating Hamas, although the Lebanese Shiite group has no reason to cross the border into Israel, unlike the Palestinians in Gaza.

Indeed, there is no need to develop long or intermediary range rocket mechanisms and then incorporate nuclear warheads on them in order to strike at an enemy, although Iran is developing the Shahab and the newer Zelzal missiles as well. But as a number of military specialists confirmed, you don’t really need rockets to deploy nuclear material. 

Though not as easy to deploy, a “dirty bomb” timed to explode in a crowded area around the morning or evening rush hour will cause a high number of casualties and contaminate a radius around the explosion site for about 100 years. Not to mention the psychological effect it would have on the economy.

The size of the contaminated zone depends on a number of factors; how powerful is the explosive charge used in the dirty bomb? How high is the wind? How much nuclear material is being used? And so on. 

A dirty bomb is a conventional explosive (TNT or semtex, for example) bomb that is wrapped in nuclear material. Of course that is easier said than done. The bomb along with the nuclear material, have to be smuggled into the country. As we pointed out in a previous paragraph, such a task is not impossible.      

Alright.  Getting back to the point: In the event that Iran goes ahead with its nuclear program a strike by Israel could lead to the closure of Hormuz, the world’s most important oil chokepoint, through which 16.5-17 million barrels of oil (based on the first half of 2008) passes on a daily basis according to the U.S. Energy Information Agency. This figure represents roughly 40 percent of all seaborne traded oil, or 20 percent of all the oil worldwide.

At its narrowest point the Strait of Hormuz is only 21 miles with the shipping lanes only two-miles wide. The vast majority of the oil that passes through these Straits is going to Asian markets, with China and Japan among the principal buyers. More than 75 percent of Japan’s oil goes through Hormuz.  In the event of Hormuz being closed the Gulf oil would have to use alternate routes which would be longer and more costly. The result would be higher costs at the pump.

According to official U.S. figures alternate routes include the 745 miles-long Petroline, also known as the East-West Pipeline, which traverses Saudi Arabia from Abqaiq to the Red Sea. The East-West Pipeline has a capacity to move five million-bbl/d. The Abqaiq-Yanbu natural gas liquids pipeline, which runs parallel to Petroline to the Red Sea, has a 290,000-bbl/d capacity. Other alternate routes could include the deactivated 1.65-million bbl/d Iraqi Pipeline across Saudi Arabia (IPSA), and the 0.5 million-bbl/d Tapline to Lebanon. Oil could also be pumped north to Ceyhan in Turkey from Iraq.
-
Claude Salhani is editor of the Middle East Times and author of the newly released book While the Arab World Slept: the impact of the Bush years on the Middle East.
The OSINT Group offers its unique open source intelligence ("OSINT") expertise as an outside support team for international clients in the energy, finance, defense and intelligence sectors.  Please visit our site at www.TheOSINTGroup.com for more details.



Visitor Comments

Name : Email :
Comment :

 



Sign up to OilPrice.com and receive our Free daily updates covering Energy, Metals, Geopolitics and Finance delivered straight to your inbox.

Subscribe to our RSS Feeds



Total Views : 1044 

The PRC versus the United States: Cyberwar, Deficits of Trust & Obama’s Secret Weapon
Reports on censorship by the People’s Republic of China (PRC) of Google, coupled with

Flawed Negotiating and 'Mediation' Approaches over Moroccan Western Sahara Jeopardize Major NATO and European Energy Objectives.
The second round of the "informal talks on the Sahara" took place behind closed doors on February

Major Changes Set to Occur in Nigeria
Major changes are to occur within days in the Nigerian political structure under Acting Pres.

Join Now

 
Click here to learn more

SymbolPriceChg% Chg
Exxon Mobil67.22up 0.000.00   
BP620.10down -3.60-0.58   
Royal Dutch Shell1932.00up 10.500.55   
ConocoPhilips51.30up 0.000.00   
Chevron73.99up 0.000.00   
Total58.69up 0.000.00   
Eni20.69up 0.000.00   
Repsol24.37up 0.000.00   
Marathon31.67up 0.000.00   
Apache106.94up 0.000.00   
Devon Energy72.04up 0.000.00   
All data delayed by 15 minutes approx.

NamePriceChg% Chg
Crude Oil81.09up 0.811.01   
Heating Oil2.14up 2.641.25   
Natural Gas4.44down -0.01-0.16   
Gasoline228.83up 1.760.77   
Gold1,117.20up 3.900.35   
Silver17.32up 0.070.38   
Copper3.40up 1.400.41   
All data delayed by 15 minutes approx.

NamePriceChg% Chg
Crude Oil 1m82.85up 0.740.90   
Heating Oil 1m2.14up 0.020.99   
Natural Gas 1m4.46up 0.020.34   
Gasoline 1m2.28up 0.010.61   
Gold 1m1.00up 4.000.36   
Silver 1m17.15up 0.000.00   
Copper 1m3.38up 0.010.35   
All data delayed by 15 minutes approx.

SymbolPriceChange% Chg
NASDAQ2,368.46up 0.000.00   
NYSE7,353.24up 0.000.00   
Dow Jones10,611.84up 44.510.42   
S&P 5001,150.24up 0.000.00   
AMEX1,889.92up 0.000.00   
FTSE5,640.49up 23.230.41   
DAX5,980.39up 51.760.87   
Heng Seng21,209.74down -18.46-0.09   
Nikkei 22510,751.26up 86.310.80   
All data delayed by 15 minutes approx.


No. 1 Oil Resource Site
General Section Misc Section Help Section Legal Section
- What is OilPrice? - Data - Site Contributors - Terms and Conditions
- About Us - Stats - Advertise with us - Disclaimer
- Sitemap - RSS Feeds - Contact Us - Privacy Policy
© 2010 OilPrice.com
The materials provided on this Web site are for informational and educational purposes only and are not intended to provide tax, legal, or investment advice. Nothing contained on the Web site shall be considered a recommendation, solicitation, or offer to buy or sell a security to any person in any jurisdiction.