<Oh All Right (or Friday Open Thread 2) (from a conference no less...) The Oil Drum Why has the price of gas gone up?>

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BOP on April 22, 2006 - 11:15am Permalink | Subthread | Parent | Comments top
I think the leadership in Iran will continue to say provocative things every time the price starts to dip, because they are making a lot of money because of the fear they are generating.



There are reports that Iran has agreed to have uranium enrichment performed for it on Russian territory. If it is correct that there is a $10 -$15 fear premium in the price then this development may take us back to $60 a bbl but it may not correct the short term problems of petrol availability. Imagine the screams in that case: oil goes down yet a gallon of gas stays high.


The provocative Iranian comments are targeted at building support with Shia youth throughout the middle east. These would be Iranian foot soldiers if a conflict occurred. This strategy is working and is creating concern for internal unrest in other countries with Shia minorities.


I don't think that the OPEC nations will look kindly on a price drop. At some point they have to ask: why are we selling our single non-renewable asset at a price that helps the west when we could sell the same asset at a price that better benefits us? Two facts support this view. The first is that there was no apparent negative impact on the consuming economies from the recent high prices. The second is that the high prices have resulted in a flood of money and there is a lack of secure investment outlets for this money given the questions raised over stability of the US dollar.


If the price does correct, I would expect an OPEC decision to curtail production.
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Beach Boy on April 22, 2006 - 2:11pm Permalink | Subthread | Parent | Comments top
The reports have just been denied.

http://news.yahoo.com/s/nm/20060422/wl_nm/nuclear_iran_dc_43

NO RUSSIAN DEAL

In Moscow, a senior Iranian diplomat played down a radio report that Tehran had a "basic agreement" with Moscow to enrich uranium in Russia and said no new deal had been struck.

Earlier on Saturday Iranian state radio had quoted Iran's ambassador to the IAEA Ali-Asghar Soltanieh as saying only a few technical, legal and financial issues must be ironed out on a joint enrichment project with Russia.

But speaking to Reuters in Moscow, where Iranian officials have held talks with Russian and European counterparts on the nuclear issue, Soltanieh said there had been no new progress on the enrichment talks.

"Of course with the initiative of our Russian friends there have been some discussions with our European friends, but that is all I can say at this stage," he said. "There is no new agreement. This is the principle agreement we have had before."

Russia has offered to enrich uranium for Iran to allay concerns that Tehran could use domestically produced enriched uranium to make nuclear bombs.

But progress on the deal has been hindered by Iran's refusal to bow to international demands that it halt all home-grown enrichment work.

A "basic agreement" on enrichment with Russia was previously announced by Iran in February but talks subsequently appeared to stall.

Soltanieh reiterated Iran's position that its case did not merit Security Council involvement.

"We are appealing to the international community not (to) let this go along the avenue to confrontation," he told Reuters.

"I advise that, rather than deteriorating the situation, let's find a ways and a means to let the IAEA do its own job and (for) Iran (to) continue its cooperation," he said.

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173 comments on The first weekend thread

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