First Post - War in Iran

ReducedToZero · Posted: Mon Jun 30, 2008 12:59 am Post subject: First Post - War in Iran

Hey guys Ive been reading this boards for about 2 years now and I never decided to join but todays news really startled me and I wanted to get some opinions...

From CNN "The Bush administration has launched a "significant escalation" of covert operations in Iran, sending U.S. commandos to spy on the country's nuclear facilities and undermine the Islamic republic's government, journalist Seymour Hersh told CNN on Sunday."

Do you guys feel there is imminent possibility to an Iran strike by US/Israel?
Where might this sent the futures markets as soon as tomorow (6-30)? IE- does this significantly change the "Risk Premium" on crude-oil?

Hogan · Light Sweet Crude Joined: Oct 25, 2004 Posts: 1298

Hello, ReducedToZero. Welcome. You might want to post this in the Energy Geopolitics sub-forum instead.

By the way, check out this recent article:

Iran preparing to fire missiles at Israeli nuclear power plant

jbrovont · Intermediate Crude Joined: Jun 16, 2006 Posts: 652

"Significantly change" not really - the US has been escalating the rethoric for years about Iran's nuclear ambitions and their "intended response" to it.

Will the US start a war with Iran? Bush(II) is on record saying he'll "address" the threat before he leaves office. Does that mean you can take it to the bank? It's anyone's guess - he's not exactly the most reliable promise keeper Wink

Graeme · Posted: Mon Jun 30, 2008 2:22 am Post subject: Re: First Post - War in Iran

ReducedtoZero, Thanks for your post in the current news forum. This has piqued my interest in Iran again. I haven't been following what's happening there for a while. My preliminary assessment is that there is an escalation in "activity" against Iran, which has affected current oil prices. Since diplomacy has not worked very well, and direct military air strikes are out of the question, the best activity left is covet action.

Report: Bush boosts covert actions in Iran

benzoil · Posted: Mon Jun 30, 2008 2:57 am Post subject: Re: First Post - War in Iran

Normally, I dismiss all the 'War on Iran threads', but Seymour Hersch is an excellent, well-sourced writer on the Middle East. For him to say some of these things is alarming to me in a way that some of the other articles I've read are not.
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kokoda · Heavy Crude Joined: Aug 24, 2006 Posts: 422

The world is entering a deadly phase ... the last few months of the Bush administration. He might want to go out with a bang.

mcgowanjm · Tar Sands Joined: May 23, 2008 Posts: 63

Dreamtwister · Fission Joined: Feb 06, 2006 Posts: 2196

pedalling_faster · Intermediate Crude Joined: Dec 10, 2005 Posts: 830

they're going to keep prodding & poking Iran until Iran hits back, and then they'll say, "hey ! Iran attacked us !" so they can sell it as a "defensive war".

i think we won't know who Obama really is till he gets into office. maybe his votes to finance the war are things he has to do to end up in the Oval Office.

if i was an Israeli hawk i'd attack Iran before Obama moves into the White House.
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nobodypanic · Heavy Crude Joined: Jun 02, 2008 Posts: 472

ReducedToZero · Posted: Mon Jun 30, 2008 11:58 pm Post subject: Re: First Post - War in Iran

Can Iran be considered a "black swan" event if oil speculators and consequently oil prices take into account the risk factor (percentage based?) of going to war?

Simply a question feel free to dissect my logic.

Micki · Posted: Tue Jul 01, 2008 1:38 am Post subject: Re: First Post - War in Iran

It could be considered a black swan in the sense the a war has NOT been priced into oil.
Even if the likelyhood of a war is increasing, we don't know when it will happen and we don't know the outcome of it. Risk premium has therefore not been built into the price and a price shock will happen once the first bomb is dropped.
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ReducedToZero · Posted: Tue Jul 01, 2008 1:40 am Post subject: Re: First Post - War in Iran

Your saying risk premium is not in the price of oil in this situation or in any situation?

Micki · Posted: Tue Jul 01, 2008 2:04 am Post subject: Re: First Post - War in Iran

Premium is added as the risk are known.
Insiders of course know certain things somewhat earlier than the rest, but you cannot add on a risk premium for the strait of Hormuz being closed off before the war even started.
So risk premium is always changing based on what is known and to some lesser extent what is expected.

Risk premium by the way is a somewhat abstract term.
Noone can say how much of price is based on risk of something as it is all just traders taking positions. But what happens is that if there is a sign that conflict is escalating, more traders are daring to go long on oil as there is a grater chance of supply interuptions.
But appreciating price is a sriver itself, so when price is going up, momentum players jump on board not becasue of the increasing risk, but becasue the price is going up.

But I dare to say, if Israel for instance invades Iran tomorrow, oil price will go up.
That to me suggest, the invasion therefore wasn't priced in.

Theoretically I could of course be wrong. Israel could invade and all traders go yawn as they are all long already. But I'll put a buck this isn't the case.
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Lets take a ride, and run with the dogs tonight
In suburbia
You cant hide, run with the dogs tonight
In suburbia
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ReducedToZero · Posted: Tue Jul 01, 2008 2:08 am Post subject: Re: First Post - War in Iran

So would you say that the momentum play is what many people are using as a scapegoat right now?