Among the few countries that have a substantial influence over the prices of crude oil and natural gas, Iran is probably the most feared by the international community due to its strategic, geographic and geopolitical position in the Middle East and Central Asia.

Regularly coming into economic conflict with the United States over the last few years, Iran has successively rebuffed calls for it to expand the production level of the OPEC, threatened to take control of the Strait of Hormuz – where half of the world’s oil production is transported weekly, allegedly supported terrorist groups in Lebanon and Palestine and, in 2007, threatened to bomb half of the off-shore oil and natural gas platforms in the Caspian Sea if the Americans didn’t remove their troops from Azerbaijan.

There are a wide range of factors that influence oil prices, from piracy in the Indian Ocean to a rise in Chinese demand. But Iran now holds a special spot on the list since geopolitics have moved it center-stage.

It’s important to remember that Iran is the world’s fourth largest oil producer and also possesses the world’s second largest natural gas reserve. By such standards, Iran could hold half of the world hostage in terms of energy. So why hasn’t it happened yet?

Iran needs the Western world to buy its oil and its natural gas because, just like every country across the globe that relies on natural resources for the survival of its economy, the Islamic Republic needs to eat, needs to finance its infrastructures, needs to pay for its nuclear program and its military equipment.
The problem is that Iran has allied itself with one of the most feared countries in the world in terms of energy and military power, the one and only motherland: Russia. The same Russia that has been providing Iran with unique missile guiding systems, with the latest Sukhoï and MIG combat planes, with access to some information on civil nuclear engineering, and the same country that was given an offer to join the OPEC two months ago by the same man who represents the Islamic Republic: Mahmoud Ahmadinejad.

Furthering this process, Iran recently offered Russia, Venezuela and a few Caspian Sea countries a place in the formation of a new cartel to control natural gas markets, using the same model as the OPEC. The day following this announcement, oil prices soared by $10 and natural gas prices followed by about the same amount.

From a technical point of view, Iran cannot by itself determine the new crude oil prices, it requires the agreement of a majority of the OPEC council. From a practical point of view, it can influence it greatly, and at a very impressive speed.
Over the course of 2008, crude oil price went up six times, leading to a ceiling price of $147 per barrel before going down again. Every single time, the rise in prices was the direct result of an action taken by Iran: testing new mid-range missiles, announcing the possibility of a cut in OPEC production, announcing civil nuclear tests, etc.

Overall, Iran has a considerable influence over crude oil and natural gas prices, but it’s never been very technical. One must understand the nature of Iranian provocation, and not respond to it by creating a “risk premium” or “fear premium” of $15. The western world still needs to learn how to do that, and it could take a few lessons from Russia on the matter.

Sincerely,
Thibault Normand

Find out more on http://www.eastern-intelligence.com

Normand is the owner of Eastern Intelligence
He works as a free lance writer in business intelligence and consults on stratehic matters such as oil and gas business, in Eastern europe, Russia and Central Asia. Read more about him here : Who am I?

Source:http://www.articlesbase.com/politics-articles/of-iran-and-oil-1317350.html

Highly paid government bureaucrats will be descending in masses on Copenhagen in December of 2009. They all have instructions to defend the status quo and make sure that the world will follow the outdated and ineffective recommendations and provisions of the ill conceived Kyoto Protocol.

Only a few, if any, officials have any concept of the coming horrors that continuing overheating of our planet has in store for its trusting citizens.

For two centuries, coal has powered the rapid industrialization of many countries. These countries are enjoying the countless benefits and the increased wealth that advanced industrialization has bestowed on them.

Since the midst of the twentieth century, a potentially fatal flaw of accelerating industrialization has become visible. Planet Earth is heating up. This phenomenon was barely visible early on, but is now escalating at a quickening pace.

Physicists can easily explain this rather sudden rise in global temperatures. Oceans and lands were capable to originally absorb huge amounts of heat and carbon dioxide with only minor indications of global warming and acidification of surface waters.

This period is ending while combustion of fossil fuels is increasing at continuously accelerating rates, caused by the explosive growth of energy consumption across the world.

China has become the most prolific user of coal for generating electricity and for supplying energy to its extremely rapid and successful industrialization efforts. This growth will accelerate further. Other countries are following the example of China and are beginning to produce and import more and more energy for powering their quickly growing economies.

Europe and Japan have been trying to reduce energy use and limit greenhouse gas emissions. Such efforts are rarely successful in creating wealth and economic growth. Adhering to Kyoto Protocol provisions seldom makes economic sense.

Several countries may continue to follow Kyoto concepts. Others like the BRIC countries, made up of Brazil, Russia, India, and China, will be better off to abandon Kyoto and continue with their intensifying energy utilization. Following the axiom of “do as they do, not as they say”, these countries are entitled to imitate highly industrialized and wealthier nations.

But will such advice not accelerate global warming even further? Yes it will. However, as long as the major industrial countries cannot find the will to stop fossil fuel burning altogether, it is hypocritical to prevent less fortunate countries from joining the establishment.

Instead, the most prosperous countries can and must be the first to establish a concept and a plan for saving Earth from continuous warming. World energy supplies must be changed completely from fossil fuels to renewable and economical energy sources. Otherwise, the Earth will overheat severely long before the end of the twenty first century.

The consequences of severe overheating will be devastating. Climates will change and will spawn more violent windstorms, more destructive floods, and more severe droughts. Most dangerous and most damaging will be the indefensible rise of sea levels. Low-lying coastal lands will be submerged, precious and irreplaceable infrastructures will disappear, and large populations will have to flee to higher grounds.

Does the world really have to watch helplessly as it is being destroyed by the greed and stupidity of its most powerful nations, its clueless corporations, and its powerless governments?

The world’s most dominant economies, the USA and the European Union, have all the resources, the infrastructures, and the skilled workforces that must be mobilized to improve and deploy those advanced energy supply technologies, which can still rescue our Earth. A few, critical technologies are still missing but can be fully developed within one single decade.

World economies can continue their essential growth into the next century only, if the US and the EU decide to act decisively and soon.

It will be scandalous, shameful, and contemptible if the two, industrially most advanced, and wealthiest superpowers will wait for China to snatch the world from otherwise inevitable economic collapse.

It will be a moral disaster if the Earth’s wealthiest nations cannot agree to leave a better world for future generations!

Sincerely,
Klaus H Hemsath

Dr. Hemsath’s books, Climate Change-Gold Rush or Disaster? and Clean Energy For Centuries, offer a comprehensive plan for saving Earth from overheating. He is now writing a follow-on book, Petroleum Substitutes From Biomass. For fifty years he has worked on advanced energy technologies as scientist, engineer, inventor, Corporate R&D Executive, CEO, entrepreneur, and author. He holds more than 60 US Patents. Go to http://www.thermalexpert.com

Source:http://www.articlesbase.com/politics-articles/copenhagen-can-open-new-era-of-clean-and-economical-energies-1289126.html