Oil Spike & Israel Strike Threat Against Iran

One of the reasons behind yesterday’s record oil spike and close at $138.54 was attributed to remarks made to an Israeli newspaper by Shaul Mofaz, Israel’s deputy Prime Minister. Mofaz said that “if Iran continues with its program for developing nuclear weapons, we will attack it. The sanctions are ineffective. Attacking Iran in order to stop its nuclear plans will be unavoidable.” Mofaz said in the Yediot Aharonot interview that such an operation by Israel could only be done with US support.

Traders began connecting the dots since Prime Minister Ehud Olmert had just visited President Bush at the White House two days ago. At their meeting, the President declared “Iran is an existential threat to peace.” Olmert said “the international community has a duty and responsibility to clarify to Iran through drastic measures, that the repercussions of their continued pursuit of nuclear weapons will be devastating.” White House press secretary Dana Perino tried to tone down the rhetoric at yesterday’s press briefing by emphasizing the need to solve Iran’s nuclear situation “diplomatically.”

A strike against Iran by Israel backed by the US could result in Iran retaliating by blocking the flow of oil from the Middle East. I have written multiple posts* that raise the potential of conflict involving Israel, Iran, and the US. In these posts I raised the most likely times of conflict could occur around the June 10 First Quarter Moon, the June 18 Full Moon, and the June 26 Last Quarter Moon. Beyond the June dates I’ve previously written about, August could also be a tense time between the three nations. Certainly the August to early September timeframe looks to be particularly challenging for the Iranian people.

When I examine planetary cycles I am looking at potential influences as the future is not written in stone. Cycles can manifest in many different ways. As their “interpreter,” I have to determine the most likely possibilities these potential influences might bring. I have continued to emphasize in the Weekly Forecast that with Mercury retrograde from May 26 to June 19, people need to carefully consider what they’re being told, as it can be difficult to distinguish truth from propaganda. Financial markets tend to operate in a choppy to volatile fashion with no clear sense of direction. Issues from the past resurface.

Beyond planetary cycles is the need to analyze the motivations of the players involved in this geopolitical drama. President Bush and Vice President Cheney are no doubt eager to “take care” of Iran’s nuclear threat and their time is running out. Russia is against a new round of UN sanctions. At the same time, the US military is stretched thin and any type of engagement with Iran can further destabilize Iraq. Bush and Cheney should take oil traders’ reaction to the potential of attacking Iran as a message for the US to step aside from direct engagement.

Mofaz’s remarks need to be put in the context of Israeli politics. Prime Minister Olmert is under pressure to resign over a bribery scandal. Olmert is accused of accepting over $150,000 in cash from American businessman Morris Talansky, who co-founded the New Jerusalem Fund with Olmert. Mofaz was the former defence minister and armed forces chief of staff. He is vying with foreign minister Tzipi Livni to become Prime Minister and head of the centrist Kadima party if Olmert steps down. Mofaz is trailing Livni in the polls, and is campaigning that he is tough on protecting Israel. Although elections are not scheduled until November 2010, transiting Neptune (scandal) is currently challenging Israel’s Taurus Sun (the leader).

As I have previously written, there are many factors fueling oil prices. Oil is in a bubble. But it is a bubble that is based on global supply and demand issues. Speculators enter the oil trade as protection against the weak US dollar and the effects of inflation. The Federal Reserve’s monetary policies have played a starring role in escalating energy and commodity prices. Even without the nuclear threat of Iran, the best quality crude and the easiest sources of extraction are located in the most geopolitically unstable areas.

*Related Posts:
“Mars in Leo Fuels World Leaders Egos” (5/1/08) see Geopolitical Influences section.
“Gemini New Moon Cycle” (5/31/08) see First Quarter Moon section.
“Phoenix to Rise from the Ashes on Mars” (5/20/08) see final paragraph.

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