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March 28, 2012 - 02:10 PM God's prophets told us this months ago........... Gas Could Hit $8-$10 On Iran Showdown, Experts Say Gas prices could double if Iran acts to close the Strait of Hormuz to oil-tanker traffic near the beginning of next year, cutting global economic growth by more than 25%, a leading energy-consulting firm says. Iran lacks the military might to close the strait for long, but it may be able to disrupt global oil supplies for up to three months by laying mines in the 6-mile-wide shipping passage that the U.S. and its allies would have to find and remove, analysts at IHS Global Insight said on a conference call with reporters Wednesday. About 17 million barrels of oil a day pass through the strait, or nearly 20% of the global market. Brent crude oil prices could briefly hit $240 a barrel in the first quarter of 2013, said Sara Johnson, senior research director for Global Economics at IHS. Brent, the benchmark European oil, which IHS uses as a proxy for global prices, closed at $123.07 in London Thursday. In the U.S., West Texas Intermediate, the benchmark U.S. crude oil, closed at $105.35 a barrel. Prices could stay as high as $180 in the second quarter before reverting to somewhere around $120, she said. The firm forecast that such an oil shock could bring back gas lines in much of the world, and shave global economic growth next year to 2.6% from a current forecast of 4.6%. "If it did hit $240, you're looking at about a doubling of where gas prices are now," said Jim Burkhard, managing director of the global oil group at IHS CERA, the firm's energy-research arm. "And the U.S. is at $4-4:50" Closing the strait probably wouldn't be in Iran's best interests, but its leadership often fails to act in ways that Westerners consider rational, said Farid Abolfathi, senior director of the IHS Risk Center. The firm's analysis assumes the strait would be closed at the start of 2013, as Iran reacts to pressure to stop development work on nuclear weapons..................... |