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Iran War Game+Oil Tankers Waiting Offshore=Oil $$ Up

tankersoffthecoast

This is just my two cents that I figured I’d throw in here.  I found three interesting articles that bring up a simple equation:

Iran sets off a war game that “heightens tensions between Iran and Western nations” and raises speculation over a potential oil supply risk.
+
More than 50 oil tankers are anchored offshore (this article is around Britain – what’s to say they’re not sitting offshore around North America?) which have been “cynically told to wait for crude prices to be driven up before they unload their cargo”.
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An increase in oil prices.

How fair does this sound? Here are the articles that I found. Tony.

iranwargamesIRAN STAGES WAR GAMES, SITS ON WEST’S NUCLEAR OFFER

Military issues warning to Israel, tries to show defensive capacity

By Thomas Erdbrink
Washington Post Foreign Service
Monday, November 23, 2009

TEHRAN — Iran’s army and Revolutionary Guard staged large-scale air defense war games on Sunday in an effort to show off the country’s deterrence capabilities amid rising pressure from the West over its nuclear program, state television reported.

Images broadcast Sunday included warplanes dropping bombs on targets in the desert, rockets being launched and paratroopers boarding Chinook troop helicopters. Iranian leaders had earlier warned that any attempt by Israel to destroy Iranian nuclear facilities would be met with a military response. “If the enemy tries its luck and fires a missile into Iran, our ballistic missiles would zero in on Tel Aviv before the dust settles on the attack,” said Mojtaba Zolnour, Supreme Leader Ayatollah Ali Khamenei’s representative in the Revolutionary Guard Corps, told the government-run Islamic Republic News Agency (IRNA) on Saturday.

The display of military muscle Sunday came as Iran’s envoy to the International Atomic Energy Agency, Ali Asghar Soltanieh, insisted Iran needs guarantees it will receive nuclear fuel on time for its research reactor if it is to agree to a swap of uranium proposed by the West, reported semi-official Iranian Students’ News Agency (ISNA).

The United States, Russia and France have said they are running out of patience with Iran, which has not given a formal answer on a proposal for trading a large part of Iran’s stockpile of low-enriched uranium for the higher-enriched uranium that the country needs for medical uses, such as cancer treatments.

“The main issue is how to get a guarantee for the timely supply of fuel which Iran needs,” Soltanieh said. “We are ready to have negotiations with a positive approach, but because of a lack of confidence with the West, we need to have those guarantees.”

Previous statements by Iranian leaders have suggested that the nation was unlikely to agree to a deal.

As President Mahmoud Ahmadinejad on Sunday started a five-day trip to Africa and South America, a former vice president was sentenced to six years in prison in connection with protests over June’s presidential election. Mohammad Ali Abtahi, a cleric and prominent blogger within Iran’s reformist movement, was temporality released on $700,000 bail, the state news agency IRNA quoted Tehran prosecutor Abbas Jafari Dowlatabadi as saying on Sunday.

Abtahi, a strong critic of Ahmadinejad’s government, made televised confessions after his arrest in June. He also updated his popular blog from prison. In one posting while being held in state custody, he called his interrogator “his friend” and he repudiated his involvement in the protest movement following the election, which officially ended in an Ahmadinejad landslide but which the opposition claims was rigged.

Abtahi’s wife, Fahimeh Mousavinejad, said in an interview on Sunday that her husband has told her that parts of his confessions were made under duress. She was still waiting for him to be brought home from prison. “They have placed fear in our hearts, I can only hope he will really come home today,” she said.

ARTICLE CAN BE FOUND HERE.

REVEALED: 50 OIL TANKERS LOITERING OFF BRITISH COAST AS THEY LIE IN WAIT FOR FUEL PRICE HIKES

By David Derbyshire, Andrew Levy and Ray Massey
20th November 2009

54tankersmooredMore than 50 oil tankers are anchored off Britain – pieces in a game in which the only winners are market speculators.

The losers are the millions of British motorists paying over the odds for their petrol and diesel.

After yesterday’s report in the Daily Mail on how several so-called ‘oil shark’ tankers were moored near the Devon coast, dozens more vessels were revealed to be loitering off-shore.

Some are carrying aircraft fuel or fuel for homes. Others are empty, waiting to be restocked before setting off around the globe.

But according to industry experts, a significant number are ‘oil sharks’ – tankers that have been cynically told to wait for crude prices to be driven up before they unload their cargo.

With values soaring on the international markets, fuel made from their oil is unlikely to appear on a petrol station forecourt any day soon.

Paul Watters of the AA said: ‘Tankers are off the UK coast and also off the U.S. They are acting as storage tanks. As always, motorists are the victims in this. They are at the end of the food chain.’

The Daily Mail has learnt that 54 tankers are anchored around the British Isles.

Six are off the Essex and Kent coasts, five are moored in Lyme Bay, while four are lurking next to the Isle of Wight.

But the biggest fleet – around 30 ships – lies around ten miles from Southwold, Suffolk in the only waters around the UK where ship-to-ship transfers of oil are allowed.

limerickspiritThey come from as far afield as Malaysia, Liberia and Singapore – and include 1,000ft vessels capable of carrying more than 300,000tons of oil.

Locals in Suffolk watched with growing anger over the summer as more and more tankers dropped anchor.

Southwold mayor Susan Doy said: ‘It is wrong that tankers should be left off our coast for reasons of profiteering. Ordinary people are left to suffer as petrol prices go up.’

Andrew Reid, of ship owners and managers Charles M Willie & Co, said the flotilla off the Devon coast, pictured in the Mail yesterday, was ‘a drop in the ocean compared to the much bigger fleet full of crude oil off Suffolk’.

He added: ‘They are all just waiting there for the price of crude oil to rise, enabling huge profits to be taken. If all this crude were to be delivered there would doubtless be a fall in the crude price and petrol prices.’

Southwold Tory councillor Simon Tobin said: ‘There have been ship-to-ship transfers of oil going on off the coast here for around 15 years. But there began to be a huge increase in the number of these tankers around seven months ago.

‘We are massively concerned. These tankers are treating the coast like a car park while they wait for the right time to take their oil to shore. There is nothing to stop them staying here as long as they like. There might be a catastrophic oil spillage which could ruin our beautiful coastline.’

Small tankers bringing oil from Russia often use the spot to transfer their cargo to larger vessels. Others drop anchor there while waiting for business because it is cheaper than tying up in a port.

The price of a barrel of oil has risen from $40 to $80 over the last year. It is expected to soar even further over the next few months as the world eases its way out of recession and demand rises.

The supply of oil is strictly controlled by producers and owners – to ensure that prices remain as high as possible.

In the course of its journey from wells to the refineries, a barrel of oil may be bought and sold by different traders many times on the international markets.

ARTICLE CAN BE FOUND HERE.

gaspumpOIL TOPS $78 AMID FRESH IRAN TENSIONS

Sun Nov 22, 2009
By Fayen Wong

PERTH (Reuters) – Oil prices rose above $78 a barrel on Monday as heightened tension between Iran and Western nations raised speculation over a potential supply risk, encouraging investors to push prices higher.

Prices were also supported by a weaker U.S. dollar, following dovish comments from U.S. central bankers and a surge in gold to a new record after concerns over accelerating inflation and weak economic growth prompted investors to cut risk. Higher resource stocks helped boost Asian stocks.

U.S. crude for January delivery rose 71 cents to $78.18 a barrel by 0416 GMT. The December contract, which expired on Friday, settled down 74 cents at $76.72 a barrel, weighed down by a stronger dollar and concerns about the energy demand outlook.

London Brent crude gained 75 cents to $77.95.

Iran’s armed forces launched air defense war games on Sunday to show off the country’s deterrence capabilities in the face of Western pressure over its nuclear program, and a cleric in the Revolutionary Guards warned the Islamic republic would fire missiles at “the heart of Tel Aviv” if attacked.

“There’s always a supply rise risk premium that can arise from these elevated tensions in the Middle East and that is a factor pushing up oil prices this morning,” said Toby Hassall, a commodities analyst at the Commonwealth Bank of Australia.

Iran’s threats came a day after senior officials from six world powers said they were disappointed Iran had not accepted proposals intended to delay its potential to make nuclear weapons, with U.S. President Barack Obama having warned that there could be a package of sanctions against Iran within weeks.

Thanks to a weak dollar and signs of a global economic recovery, oil prices have gained about 75 percent so far this year, although they are still nearly 47 percent off their high of more than $147 a barrel in July 2008.

Still, analysts said oil prices have been trading within the $75-$82 band of the past one month and would need a lot more upside pressure to leap out of the $82 levels.

Barclays Capital said in a research note on Friday the upside would also probably be capped by OPEC, which has indicated that any quick run-up in prices is likely to be met by a proactive approach to calm them, and until distillate demand showed some sustained improvements.

With a raft of economic data on tap in the United States in a holiday-thinned week, including existing home sales on Monday, revised GDP figures on Tuesday and the minutes of Fed’s last policy meeting the day after, investors are set to scrutinize the numbers for signs of economic activity perking up in the world’s top oil consumer.

Separately, China’s apparent oil demand rose 10.3 percent from a year earlier, its second double-digit gain since August 2006, Reuters calculations based on official data showed on Monday.

Money managers boosted net long crude oil positions on the New York Mercantile Exchange in the week through November 17, the Commodity Futures Trading Commission said in a report on Friday.

ARTICLE CAN BE FOUND HERE.

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