Roubini: Attack on Iran Would Send Oil to $200, Spark Recession

"An attack on Iran would send oil prices as high as $200 a barrel and threaten to push the world back into recession, says New York University economist Nouriel Roubini.

Tensions have been building between the West and Tehran over the latter's nuclear ambitions, and concerns are brewing that Israel may be mulling an attack on Iran despite calls from the U.S. to give sanctions a chance.

"If there's an effect on the supply of oil and gas from the Gulf, and production and exports from Iran go for a while to zero, oil could go to $170, $180, $200 a barrel," Roubini tells Foreign Policy magazine.

"If you think about the last three major global recessions, there were all caused by a geopolitical shock in the Middle East that led to spike in oil prices," Roubini adds, referring to the Yom Kippur War in 1973 the Iranian revolution in 1979 and the 1990 Iraqi invasion of Kuwait, all of which contributed to global economic contractions.
Even if war is avoided, tensions alone are going to push up oil prices, which will take U.S. gasoline prices up with them and dampen the economy.

"I would not underestimate the effect of gasoline today, in a number of U.S. states, being already at $4.00 a gallon — and it could be so in many other states. Psychologically, once you're above the $4 mark, it has an impact on consumer confidence," Roubini says.

Prices rise during the U.S. summer anyway, when driving increases and refineries switch to pricier inputs.

"The higher those oil prices are, the higher the chance that has a negative effect on consumer confidence, on disposable income, and on the economy. And it's not just in the U.S. — the price of oil is very high in Europe and in many other parts of the world," Roubini says..."

at http://www.moneynews.com/StreetTalk/Roubini-Attack-Iran-Oil/2012/03/14/id/432485

Egyptian-Israeli Natural Gas Contract Casualty of Arab Spring?

"As last year’s Arab spring has slowly roiled eastwards from Tunisia to the eastern Mediterranean, the two most concerned governments are the U.S. and Israel, that are watching their carefully constructed defense alignments crumble to the populist forces unleashed.
After decades of repression, the Arab “street” is finding its democratic voice, which is rejecting the cozy decades-long security and energy arrangements carefully stitched together by Washington to ensure Israeli security. In the “brave new world” emerging, it is increasingly obvious that the post-Arab Spring governments, inhaling Western democratic ideals relentlessly promoted as the way forward, have a radically different agenda than those proposed by Washington and Tel Aviv.
Viewing social upheavals decades ago, in 1973 Henry Kissinger, President Nixon’s Secretary of State commented prior to the CIA overthrow of the democratically elected government of Chilean socialist President Salvadore Allende “I don't see why we need to stand by and watch a country go communist due to the irresponsibility of its people.”
Now the Arab spring seems to be embracing two policies anathema to Washington – a rejection by Egypt of its ties to Israel, carefully fostered by assassinated Egyptian President Anwar Sadat and his successor, Hosni Mubarak, Egypt’s President until 13 months ago, when the Arab spring populist uprising unseated him and his administration’s cozy energy arrangements with Israel, which provided Tel Aviv with 2/5 of its natural gas import requirement needs.
In a development largely overlooked in the Western press, in an evening session on 12 March the Egyptian People’s Assembly demanded the deportation of the Israeli ambassador Yaakov Amitai, and the withdrawal of the Egyptian ambassador from Tel Aviv.
And oh, the nullification of the country’s natural gas sales to Israel.
The People’s Assembly vote was unanimous.
Why?
As a protest against Israel’s recent campaign against the Palestinians in the Gaza Strip, which the Egyptian Assembly considers a flagrant violation of human rights.
Newly founded Egyptian democratic handwriting on the wall? Assembly speaker Saad al-Katatny asked a special parliamentary committee to follow up the implementation of the demands with the government, releasing a People’s Assembly statement commenting, “Egypt after the revolution will never be a friend of the Zionist entity, the first enemy of Egypt and the Arab nation,” demanding that the Egyptian government review all its relations and agreements with that “enemy” along with calling for stopping Egyptian natural gas exports to Israel.
So, how serious a threat?..."

at  http://oilprice.com/Energy/Natural-Gas/Egyptian-Israeli-Natural-Gas-Contract-Casualty-of-Arab-spring.html