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20 July 2019

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Jack

What is Trump's state of mind? He seems emotionally tied to Bibi even tweeting today in his support. Then again he also seems like an unsentimental person who cares more about adulation and being in the limelight and of course winning reelection. That's got to be on the top of his mind.

It looks like Khamenei is not gonna cave that easily and will climb Trump's escalation ladder every step of the way.

https://ejmagnier.com/2019/07/20/khameneis-three-commandments-for-the-iranians-the-middle-east-is-heading-towards-maximum-danger

ISL

My understanding from what I have read is that the drone was at great altitude and stealth and thus Iran should not have been able to down it. Russia could have provided tactical info (as a clear warning to Trump) or S-300 components could have been delivered years ago, or Iran could be more advanced than Hollywood projects.

The patriot appears to be useless for missile defense (95% failure rate based on MIT analysis), and when THAAD had a chance to show its worth and down the Korean missile the pentagon decided not to show off how awesome it is (in a real as opposed to staged missile test). Thus, gulf oil installations are essentially undefended - after all, how are those Patriots at protecting our Saudi allies against even Houthi missiles?

Rural america is very dependent on gas prices - there is no mass transit and driving distances are long.

US SPR is less than in 2008, but US and global usage of oil is much greater. Cant see Trump price controlling oil (Nixon would have, but we didnt have a crony capitalism economy then), so the hit on global supply will not be tamed by selling the SPR.

SPR - Strategic Petroleum Reserve


Fred

Poul,

As Стивен pointed out, some bulk cargo ships are too large for the Suez canal even after the expansion completed in 2010.

casey

Martyanov agrees with Mr. Johnson's assessment( see link below), and I think it is interesting to note that Martyanov echoes the earlier post by Mr. Colonel, I believe, about Japan's motivation in attacking Pearl Harbor. Namely, that if the Japanese military men didn't engage in an attack that they apparently knew, beforehand, was senseless, counterproductive, would lead to defeat, that "they would not be the men they thought they were."

http://smoothiex12.blogspot.com/2019/07/trump-iran-conqueror.html

God help us if these tools attack Iran.

eakens

there will be no oil for a ship to even receive if a war starts. All the oil infrastructure will be hit in SA and the UAE. Only Kuwait and Iraq will be spared and they’re more allies of Iran than the headchoppers.

Israel will be the number one target.

J

Larry,

What's your take on the news coming out of Iran where the Iranians say they've arrested 17 CIA spies, and have sentenced some to death.

JamesT

The problem with price controls is that they require rationing - and rationing encourages hoarding. I'm old enough to remember the queues at the gas stations in 1973. POTUS could simply ban oil exports - since the US is currently a net oil exporter I imagine that would be effective at keeping the price reasonably under control.

Norbert M Salamon

Sir:
Before we can ascertain the validity of your observation above, we have to see:
to rephrase the question you asked in previous post, the appropriate question is whether Mr. Trump is man enough to stop the carnage in ME/N Africa for the last 30 odd years, or in the alternative indicate that he is but a low class slave to the most destructive Israeli PM, aka Bibi.

Jack

Iran is storing oil in Chinese bonded storage right now. It will have some oil to sell the Chinese if the Gulf is shut for a period.

https://www.bloomberg.com/amp/news/articles/2019-07-22/millions-of-barrels-of-iranian-oil-are-piled-up-in-china-s-ports

The real question is how badly could they damage Gulf oil production infrastructure and how long would it take to rebuild?

ISL

Our refining capacity is not matched with our production capacity in terms of types of oil. In the import export numbers its a wash, but would be massively disruptive if Trump (stupidly) was to do so. I imagine he would tweet it out, and then would get hauled up the keister by the oil industry - Basically, refineries are on a multi-decade time horizon and the US had a very different mix of petroleum (sweet vs sour crude) then, and its easier to ship for refining than reconfigure a refinery in the US (or anywhere).

Lee

Net crude oil imports 4 mbd, net crude and products import 2 mbd. Fracking boom will bust with net imports rising again. US has been a net importer since the late ‘40’s. Congress has to eventually increase Fed fuel tax as it hasn’t been adjusted for inflation in 26 yrs.

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRNTUS2&f=W

https://ycharts.com/indicators/us_oil_net_imports

Fred

Lee,

"Congress has to eventually increase Fed fuel tax as it hasn’t been adjusted for inflation in 26 yrs."
Well they didn't raise it in more than two decades but "evenually" is such a powerful motivating force that maybe Pelosi would like to have the house pass a tax hike now and see if The Squad - or the Senate - goes along with it.

BTW I know Math is Hard is the toughest course in college but 8,387 barrels per day in July of 2002 is much lower than the 4,254 barrels per day in July of this year and fluctuations appear throughout the historical record.

aleksandar

Zero military experience but you're right on point.
In case of war, no doubt Iran will strike in Afghanistan.
A US base like Bagram is an easy target right at the base of mountains north and west.
Indefensible

aleksandar

He doesn't speak for the hardliner, he spoke for the Iranian people.
If war begin, you will have millions of iranians ready to enlist.
Patriotism is a core value of Iranian society.

Lee

Fred, my point was that the US is not a net exporter of oil. Sure imports are way down due to fracked oil production. Fracked production will bust with imports rising or US consumption dropping. Saying fluctuations appear through the historical record is obvious and irrelevant.

The consequence of not indexing the Fed fuel tax to inflation or a percentage of sales is that it loses value over time. Previous administrations and Congresses had no problem updating the tax. What happens now is that the Highway Trust fund needs to be bailed out by the general fund which comes in part from deficit spending. My point there in response to James was that getting the deficit under control and adequate funding for transportation infrastructure will come from increased fed fuel taxes. Painting a bridge and paving a road cost more than it did 26 yrs ago.
So keeping the deficit and infrastructure funding “under control” is likely to come from higher fuel taxes and higher fuel prices if oil price is constant.

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