Crisis with Iran is Why U.S. has Oil Reserves

 http://www.theatlanticwire.com/global/2012/01/this-crisis-iran-exactly-why-we-have-oil-reserves/47094/

 

This Crisis with Iran Is Exactly Why We Have Oil Reserves

Reuters

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Adam Clark Estes 7,091 Views Jan 6, 2012

Iran's been careful to dangle it's massive oil supply in the West's face as it threatens to close the Strait of Hormuz, but no matter what the country ends up doing, we've got a backup plan. Reuters spoke to a number sources from the major Western powers, including some at the International Energy Agency, who say they "discussed Thursday an existing plan to release up to 14 million barrels per day (bpd) of government-owned oil stored in the United States, Europe, Japan and other importers." This is frankly why those oil reserves are there. This doesn't mean that Iran's threats are entirely empty. "This [plan] would form a necessary and sensible response to a closure of the strait,"  one European diplomat told Reuters. He added in a blandly foreboding-sounding tone, "The IEA is monitoring the situation very closely, and is fairly concerned about it."

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Adam Clark Estes

Sources

• West readies oil plan in case of Iran crisis, Peg Mackey and Richard Mably, Reuters
• Iran's Threat to Close Strait of Hormuz Isn't Entirely Empty, John Hudson, The Atlantic Wire

Topics: Iran, Hormuz Strait, China, National Security 

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I can remember how gasoline went from 17cents a gallon to above 80cents a gallon at one point in the early 1970s. So, imagine gasoline quadrupling in price. This shoved the U.S. into recession then and it kept going into and out of recession until the mid 1980s because of the formation of OPEC. So, the Strait of Hormuz problem is the whole world's problem just like it was in the early 1970s.