Monday, August 4, 2008

Oil: The Killer Blow

Peak Oil has been much discussed, but it is a gradual process, only known for certain in the rearview mirror. By contrast, Peak Price Oil occurs without warning and can't be controlled. Our economic system may be far more fragile and vulnerable, and less resilient than we thought. Think of Peak Oil as a struggle with shortages, supply disruptions and price volatility; as a race for new energy alternatives. By contrast, Peak Price Oil is a sudden crippling or killing blow, price shocks threatening our way of life.
Morris believes Israel will "almost surely attack Iran's nuclear sites in the next four to seven months." He sees himself as a centrist, reflecting a broad consensus "shared by most Israelis across the political spectrum."

Given the above credible Iran war threat, a new conceptual approach I have labeled Peak Price Oil is needed. A possible Israeli conventional or nuclear strike/response would function as a trigger event for Peak Price Oil. Present estimates of oil/gas prices in the event of an attack on Iran are: $200-$400 per barrel of oil, and $12-$16 per gallon of gasoline. Another possible trigger event for Peak Price Oil would be a successful terrorist strike on the Abqaiq refinery in Saudi Arabia, crippling oil supplies for several years.

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