Monday, January 16, 2012

Iran Conflict: And The Winner Is……

The Iran conflict rules the headlines. There is much ado about possible sanctions against the country (because they are accused of developing nuclear weapons) and how Teheran could respond to these measures. Now Iran is threatening that it might to close the Strait of Hormuz, an important waterway, and hence stop the transport of most of the Arabian oil to the west. As a respond the price of oil sticks close to the $100 mark even as the demand for oil is falling in the U.S. and Europe (bloomberg). Without the Iran conflict the price of oil would be significantly lower, because the price of oil contains an Iran premium (

The winner of the Iran conflict is ……..Iran! The country has just one noteworthy source of income : Oil. Teheran is one of the leading exporters of oil and an influentual member of OPEC (wikipedia). Because the country`s wealth and fate depends on oil, Teheran is getting stronger when the price of the commodity is rising.

The Iran conflict has been smoldering for years (wikipedia). All the talking about possible sanctions and the measures already taken didn´t stop Teheran from advancing it´s nuclear program yet. The Iranian government didn`t show any reaction at all.  All the talking about possible sanctions & reactions didn`t do any harm to the Iranian government but the notorious conflict keeps the price of oil artificially high for years.

The high & rising price for energy is harming the U.S., Europa and Asia and is slowing the upswing of the global economy, but it is beneficial for Iran. For years the artificial high oil prices, the Iran premium, flush billions of dollar into the cash boxes of Teheran. The Iranian government can use these amounts to strengthen its global power and to invest in their nuclear program and in their army. Therefore the conflict makes Iran stronger & stronger.

1 comment:

  1. "high & rising price for energy is" beneficial for russia, isn't it?