Well, the effects all depend on the nature of the embargo. If Iran and other states just target the US, Britain, and Israel for boycott, we'll just purchase the same oil on the global market. Besides any embargo would be short lived for two reasons. 1- Countries like Iran and Saudi Arabia have no other method of funding their economies. They would not be able to sustain a sufficiently long enough embargo to damage the west before self-destructing. 2- Other countries would ramp up production to meet demand. Russia, Norway, Mexico and other oil rich nations would see dollar signs and ramp up production to soak up profits from higher prices while they last, thus driving down prices after the initial spike.
Posted by FuzzyBear aka Will 4/9/2002 3:39:05 PM

That's what's supposed to happen, I think. But keep in mind that by withdrawing large quantities from the internationally available pool, that'll drive the prices up. The non-OPEC countries will increase their production because of the increased dollar cost per barrel, which still leaves us paying a couple bucks a gallon for heating oil and gasoline. Greens and Connecticut senators can conserve and carpool all they please, but if you do business in Wyoming or Nevada or Texas or if you ship from Peoria to the east coast you're still taking it in the underwear.
Posted by Fred 4/9/2002 4:00:49 PM

Stratfor and others report that unrest directed against the dictator Chavez in Venezuela could seriously diminish exports from that source; the US gets a significant amount of crude and refined products from that country.
Posted by Bill 4/9/2002 4:05:25 PM

I've just got two questions:
1. Why does Saddam Hussein want to make all of GWB's political problems easy for Bush?
2. If Iraq only sought to cheat on the embargo when we were blockading his oil, who is going to be the one he cheats on in this next embargo?

What is without question a "gimme" concerning any oil market disruption is the way it will make the situation in Colombia and Venezuela more critical for the US. Up to now, it appeared as if Washington appeared to be wishing these problem countries under the rug.
Posted by Tom Roberts 4/9/2002 6:12:59 PM

Venezuela's a trouble spot. Chavez just missed a possible coup earlier in the year, and the labor unions were on a general strike today and (at least) tomorrow. That's not helpful to the oil markets.
Posted by Mark Byron [markbyron.blogspot.com] 4/9/2002 11:26:41 PM

Perhaps the first move the US makes on Saddam would best be seizing of Iragi oil fields nearest the Persian Gulf. Sell the oil to pay off the long-overdue war reparations, keep the profits out of Saddam's hands, and liberate that much of Saddam's domain.
Posted by Tresho 4/10/2002 6:19:28 AM