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Uh Oh: Oil Prices Up on Iran Tensions

There’s been a distinct uptick in stories about Iran’s nuclear program and the international tensions around it, but today there is something new.

Oil prices are moving higher, and people I talk to who watch the markets closely believe that politics, not economics is driving the surge.

As long as the oil prices stay flat, chatter about Iran’s nuclear program is just that: chatter.  But when markets start to move it means that some of the smart people who watch these things obsessively are beginning to think a crisis could come.

Last I looked, oil was over $98 a barrel.  You can follow the price of oil at the CNN Money site, among others.  (When I went back to get the link, the price had gone over $99.)

Hint to neophyte newshounds: watching the linkage between world headlines and prices on the financial markets is a good way to learn how things work — or at least how investors and traders think things work.

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  • Tom Holsinger

    Note that the American guarantee of the security of Iraqi airspace terminates with the joint forces agreement at midnight this December 31. After that Israeli aircraft can penetrate Iraqi airspace with impunity on their way to Iran. Jordan and Saudi Arabia have already agreed to Israeli overflights for this mission.

    The Obama administration’s failure to renegotiate a new joint forces agreement with Iraq might have been intentional rather than negligent.

  • John from Iowa

    A rather substantial confounding variable in the recent rise in the price of oil is the reduction in the price spread between WTI (West Texas Intermediate) and Brent crude. This has more to do with today’s announcement of Enbridge buying the Seaway pipeline from Conoco Philips and planning to reverse the flow to the Gulf of Mexico.

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