U.S.-Iran Military Tension Spurs Oil Price Spike
And here's yet another demonstration of the vulnerabilities that arise from the global economy's stark dependence on oil. Increasingly tense relations between Iran and the United States–Iran just tested some domestically produced missiles, and is refusing to allow a U.S. aircraft carrier back into the Persian Gulf–are believed to have helped cause oil prices to leap to nearly $103 a barrel.
Oil prices soared Tuesday as tensions grew over key Persian Gulf oil shipments. Benchmark crude jumped by $4.13, or 4.2 percent, to end the day at $102.96 per barrel in New York. Prices climbed as soon as exchanges opened for the first day of 2012 trading. Commodity prices tend to rise at the beginning of January as investors start the new year with a fresh round of trading.And remember: As it's currently structured, the global economy is rather reliant on getting those massive shipments of oil pumped into its system.
This year prices were driven up by heightened concerns that Iran might try to close the Strait of Hormuz in the Persian Gulf to oil tankers, if Western nations impose new sanctions. Iran warned the U.S. to stay out of the strategic waterway, where one-sixth of the world's oil shipments pass every day.
Anyhow, tar sands apologists will point to the incident and make their phony pleas to improve energy security by getting oil from a 'friendly neighbor', but don't buy that bunk–the price of oil will still be determined by the vagaries of the global market, and the supply just as vulnerable to other pitfalls like accidents and spills. What we really need, of course, is much, much more domestic clean energy–reliable stuff like solar and wind that harness an energy source that won't a) run out or b) suddenly become more expensive in the midst of an international pissing contest–and to wean economies off fossil fuel dependence in general.
Tall orders, sure. But events like this should serve as stern reminders of how fickly and unsustainably our world is currently wired.