Thursday, October 08, 2009

Conspiracy Theory Time

Here is a little nugget for the conspiratorially minded. Western oil majors and even financial houses like JP Morgan are and have been storing crude oil in tankers at anchor for the past year. This was the result of the rare condition in the oil markets called contango. Currently there are 26 large tankers acting as storage for crude oil, eah holding 2 million barrels. One of the major fears regarding taking any military action to halt Iran's nuke weapons program is that they will close the straight of Hormuz and crimp oil flows to a global economy struggling to recover. Well, there are many many complex considerations around this issue, but let me just ask, how many tankers just sitting around storing crude oil would be an effective neutralizer of this fear? Could the US and British governments ask the likes of Morgan and others to ramp up this activity so as to have, oh, 70, 80, 90 tankers filled up and sitting quietly just in case Iran got bombed and acted up in the Strait? Just asking.

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