Teething

Someone, somewhere in the Adm has put teeth in sanctions targeted at Iran. Obama’s at the helm; he gets the credit. We are pleased to be able to compliment the guy.

At the moment Iran is in a mad global search for refined gasoline. Why? Because a series of new sanctions agreed since June specifically target Iran’s oil trade and industry. These make it harder for any exporter to do business with the mullah clowns.

Background: Iran is the world’s 5th largest crude exporter can only refine about 55% of it gasoline needs. Too much!

As our readers have known for years, this is the Achilles Heel to that operation. Cut off gasoline (which we recommended 4 years ago) and the masses will take care of the mullahs. It’s that simple. Well, maybe we’re on the way.

According to Reuters, Iran needs 11 - 13 cargoes / month during this season. A document seen by Reuters showed that only 3 had arrived in June. One of these was from Turkey (naturally). Nothing from India, it’s once largest supplier. Another is expected from Venezuela this month.

Most owners of vessels are scared to death to get caught; most simply quit. Plus Lloyd’s of London no longer insures such shipments (Lloyd’s has 20% of this market but sets the trend.).

Fortunately those few countries that don’t care about the sanctions and yet have oil, are very far away, like Venezuela. Thus, the product the mullahs get is much more expensive.

Complementary to that above, more officials are publically predicting a strike on Iranian nuclear facilities. Michael Hayden, a CIA chief under President George W. Bush, said last week that during his tenure a strike was "way down the list" of options. But he tells CNN's "State of the Union" that such action now "seems inexorable." So this too is good news, because the more the topic is aired, the less likely it is that it will happen. But at this moment these higher odds are being priced in at the pump. Better that, then $6.50/gal o/n. That would have happened if we had been correct in our prediction of an Israeli strike for last March.

There’s plenty of brave folk in Iran who want a Western lifestyle and consensual government. Obama abandoned these types last year. Now he’s mending his ways, maybe. It’s tough love; it’ll make things miserable on these brave souls for a bit, and then they’ll get the job done.

Robert Craven