Sunday, January 8, 2012

Economics of Oil

We have often discussed the idea of power and the control of resources. Here is an article that gives some insight to the importance of foreign policy to our lives at home.

40 comments:

  1. If the oil does increase, our economy is going to be in even more serious danger. Because of the oil increasing in price, there will be another war against Iran, which could also hurt our economy even more. The signing of Obama’s legislation last weekend is going to make it difficult to send its oil. President Obama might have thought it was helping, but instead it was creating even more problems. Thankfully, Iran is backing down but still has the plan to plant mines. In my opinion, if Obama does not fix this, we are going to be in a bad situation. War will arise and there will be an outrage with the increase price of oil.

    Mel Reime- pd. 5

    ReplyDelete
  2. If the oil does increase, our economy is going to be in even more serious danger. Because of the oil increasing in price, there will be another war against Iran, which could also hurt our economy even more. The signing of Obama’s legislation last weekend is going to make it difficult to send its oil. President Obama might have thought it was helping, but instead it was creating even more problems. Thankfully, Iran is backing down but still has the plan to plant mines. In my opinion, if Obama does not fix this, we are going to be in a bad situation. War will arise and there will be an outrage with the increase price of oil.

    Mel Reime- pd. 5

    ReplyDelete
  3. Oil has been a way for countries to influence one another ever since I can remember. The extreme dependence of Americans on foreign oil is slightly disappointing as Presidents constantly vowed to increase domestic resource use. Threatening by the part of Iran is useless, as both sides know that such an undertaking would ruin both countries, economically. It is futile for this kind of conflict to be occurring in the first place, especially in a time where most economies are so unstable and weak. This act is selfish and very unecessary, in my opinion; it is just stetching everyone's patience. It seems as if a war is brewing under this bluffing Iran is imposing. These situations never end well, and so all of this is making me nervous for what may happen, not only to oil prices but also to foreign relations.

    ReplyDelete
  4. This is a very serious situation. This has been in headlines for a while now. If the oil prices increase by 50% so that the prices reach $6.00-$8.00 per gallon will hurt our economy and even the world economy. Analysts can only predict what could possibly happen, but they cannot be certain at this point in time.
    -Krutee pd. 7

    ReplyDelete
  5. This threat by Iraq seems very shallow in my opinion. So if they close down the strait they will get hurt because of all the money they get from exporting but a large amount of the world will be affected. With their economic situation this threat would hurt themselves rather than the goal they are trying to achieve. Because so m any countries rely on the oil Iraq exports, like the article states, there could be a world side outrage that may lead to some sort of fight. Since Iraq does not have a good economic position, and war is costly what kind of threat do they believe they are making? Ok, so a lot of countries may go into panic because of the outrageous oil prices that may come from it, but do they think these countries will not try to retaliate? With so many people being affected, I would believe there would be many people upset forcing the governments to take action. Overall this “threat” from Iraq is stupid and if they REALLY feel the need to stop exporting their oil then fine they can. And when their economy falls to the ground, I will make sure that I will be laughing. ~hannah Lee pd 9

    ReplyDelete
  6. If Iran follows through with their threat of blockading the Strait of Hormuz, it would end up having global effects. More than 85 percent of the oil and most of the natural gas that flows through the strait goes to China, Japan, India, South Korea and other Asian nations. With the blockade, the price of oil would sky through the roof. Also Iraq, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates all rely on the strait to ship their oil and natural gas exports. A blockade would effect these countries, as their unstable governments cannot afford to be in danger. The United States wouldn't be severely effected, as we have other pipelines. However, without the strait, the prices to transport oil from other pipelines would be at extreme prices. Playing with the global economy in this way would be an "act of war" and could have relying countries to retaliate.

    Daniel Sang
    Period 9 World History

    ReplyDelete
  7. After, reading this article I definetly came to a better understanding about oil, and its importance around the globe. I never realized how essential oil was to those around the world. I think if the straight were to close it honestly wouldnt benefit either side. Especially, economically since niether Iran nor the United States is stable at this time. Cutting of the oil wouldnt benefit Iran especially since the U.S. isnt the only country that would be affected. Cutting of the straight of Hormuz is ultimately a lose,lose situation

    - Priya Chacko pd.9

    ReplyDelete
  8. The point of this article is to inform us about threats that Iran is making about blocking a waterway that gives many access to oil. This is most likely just an idle threat to scare people.
    ---Danielle Calleo, Period 9

    ReplyDelete
  9. I believe that the only option left to do is let Iran continue and just go with it because it;s not like we can force them to do what we want. We could negotiate on the matter but at the end they're the ones who are calling the shots in this one.
    Muhammad Period 9

    ReplyDelete
  10. To close the Strait of Hormuz would mean to basically cause another world war. Since most countries get their oil mainly from Iran, the price of oil will increase dramatically. All the countries being supplied with oil from Iran would be angered by the closing of the Strait of Hormuz and eventually a war would begin. And like World War I, alliances will cause other countries to get involved creating an even bigger war. Iran would be ridiculous to close the Strait of Hormuz because Iran would be in war with basically the whole rest of the world. To close the Strait of Hormuz, there would be no point. Iran would ultimately gain nothing. On the other hand even if Iran closed the Strait of Hormuz, the countries that get oil from Iran have other places to buy oil from as well. Even though it will be more expensive, these countries won't have to rely on Iran. So whatever Iran is trying to gain, Iran wouldn't gain it. But since Iran is slowly increasing the price of it's oil, there is a chance for war in the future. Ultimately, there will most likely be a war (Iran vs. the world) in the future if Iran closes the Strait of Hormuz.
    -Ami Z
    World 10
    Period 9

    ReplyDelete
  11. I think oil is becoming a bigger crisis
    but instead, we should focus on other means
    of getting it. I like that Obama is taking action though
    even if it may not be for the best.

    -Julie S. Shin period 5

    ReplyDelete
  12. This article has showed me how greatly many countries depend on foreign countries resources. Iran's threat of creating a blockade along the Straight of Hormuz would be a great disadvantage for many countries causing the price of oil to rise by almost 50 percent. In addition European imports would be banned. Many feel that this is an action that Iran will not follow through with because Iran its-self relies on the oil along the straight. China may also be effected by this blockade because it is a major purchaser of the oil. In my opinion I do not think that Iran's idea of creating this blockade is a good idea because by doing this Iran will be loosing its ties with many countries. This can also cause many disagreements and arguments over control/share of the oil that is needed by many countries. Also the prices for transportation around the blockade will rise making many nations angered by the prices of energy to travel. I am sure that many countries in need of this resource will be frustrated and dissatisfied by Iran's decision on creating its blockade so in my opinion again I think this is an awful idea and hopefully it will not be followed through with. - Nikita F.

    ReplyDelete
  13. I find it ridiculous that they would even THINK of putting up a blockade in the passage. Such an obstruction would be an asset to no one, which only further proves my point. Gas prices would sky rocket, transportation itself would be limited, and it would create even more tension in the surrounding nations. If the strait is eventually closed off, well we can be sure to expect another war for a stupid reason.
    --Pearl L. World 10 pd 9

    ReplyDelete
  14. United States should not threaten to attack if Iran decides to go through with their threat, the US should stay out of Iran for a while. Other than that I feel like all these threats are hollow and no one will actually go through with them. Iran is too dependent on the export of Oil to keep their country going and the rest of the world is to dependent on oil to retaliate against the Iran at this time.
    - Nia R. Pd 09

    ReplyDelete
  15. I noticed that gas prices are slightly higher this week, but I wasn't aware it was because of all this political tension. If gas prices were to raise to $4 I think that's absolutely insane and I'd probably have to start limiting my driving; now that I have to pay for my own gas. I knew there was tension with the shipping of oil but I wasn't aware of Iran using its threats as a way to increase oil prices and shipping costs for the West. Cutting off the Straight of Hormuz would be a bit of a problem and cause even more tension and problems. Increasing prices by 50% sounds pretty scary and cause more problems in the economy.
    Jess
    Period 7

    ReplyDelete
  16. If Iran was to proceed with the blockage then it will be bad since many country such as China and India need it. In my views, I think that this shows how every country matters. If one country shuts down, it impacts the others.
    -Brandi Sze (World, Period 9)

    ReplyDelete
  17. It was interesting in this article to see how such a small part of the world actually has a lot of power because of the resources it has. Not only does Iran control oil for certain countries, but if it were to blockade that Straight, it can cause a ripple that would effect the whole world. That is why I think that it is extremely important to try to develop sustainable sources of energy instead of relying on such an unstable system.
    Evan S Period 9

    ReplyDelete
  18. theres one thing i don't understand about the article, why would somebody interrupt with the shipping of the oil if it will affect prices worldwide? it would hurt there own country.
    JL period 9

    ReplyDelete
  19. It is amazing how oil plays such a large role in how nations around the world operate their daily decisions. It seems now that the holder of the oil supply has a certain advantage when dealing with global affairs. They have an unfair upper hand in desperate situations such as the one mentioned in this article, where these oil producing nations can basically manipulate the rest of the world (to a certain extent), solely because they have control over the oil supply. If we could produce a cheaper renewable energy source then we wouldn’t have to depend on these corrupt Middle Eastern countries for their oil supply. We would be much more independent. As of now, we have solar, wind, water (possibly) but none of those seem dependable enough. Until we find a renewable resource that is completely dependable, we will remain dependent on these chaotic countries for their oil supply. Therefore falling into their trap—it’s a downwards cycle.
    Merilyn Chang
    Pd 9

    ReplyDelete
  20. Oil price increase will be another dealth blow to the already struggling world economy which is trying everything possible to start walking again. Iran is known in the US to be totally illogical and quite crazy in their decisions. I wont be surprised if they cause major trouble.
    -shobha tewani world history 10 pd.9

    ReplyDelete
  21. Why is Iran threatening to blockade the Strait of Hormuz in the first place? Like Sadad Ibrahim Al-Husseini, former head of exploration and development at Saudi Aramco, said, “To close the Strait of Hormuz would be an act of war against the whole world. You just can’t play with the global economy and assume that nobody is going to react.”The blockade would effect most of Asian nations, but will ripple on global oil prices. The price of regular gasoline might be raised up to $4 a gallon. Obviously, if Iran were to go with this, it would cause an outrage. In my opinion, i believe Iran is being childish. You cant just mess with the economy just because you feel like it. They are not thinking about how this would effect the rest of the world.
    JesLi pd. 9

    ReplyDelete
  22. This article is about the metaphorical ripple that will be caused by a situation where Iran formed a blockade in the strait of Hormuz. The strait of Hormuz is essential for the trade of oil, making up 1/5 the global trade of oil. The article's author predicts the ridiculously high rise in oil prices if Iran does so. Also, the author discusses how nations like the U.S. would respond to this action.
    In my opinion, this seems to be a very delicate matter. So much is dependent on oil, for example, transporation. Not only would the blockade ruin many economies but it would cause large scale epidemic. U.S. has already confirmed that they are ready to confront the possible blockade with military force. There seems to be so much conflict that can simply be avoided if the right leaders sat down at a table at the right place and the right time. If not, and this blockade does happen, I wouldn't be surprised if kids suddenly had to pay to take the bus to school everyday.
    Daniel Lang, 9th World

    ReplyDelete
  23. Katie Rahill
    pd5.
    The United States claims that the Navy’s Fifth Fleet, is ready to “retaliate militarily against Iran” if there is a blockade of the Strait of Hormuz. Within the article, the author did mention, “American officials have warned Iran against violating international laws that protect commercial shipping in international waters, adding that the Navy would guarantee free sea traffic.” The article also stated that the US and Europe would be the least affected by this blockade because the two both do not base all of their oil supply from one place, when other countries do/did…but regardless it would be a global issue. Transportation prices would skyrocket, which would lead into a problem for many countries, due to the instability of them to begin with. At the end of the article, it has been concluded that no one for sure is certain of what could or is to come of this sticky situation.

    ReplyDelete
  24. Iran should think before they block off the Strait of Hormuz. World powers such as the US and China would be directly effected. They won't be happy and there will be ramifications for Iran. The economy of Iran relies on exporting oil so if they block off this strait, they will not be able to make their money. Also, tensions will continue to rise and that could eventually lead to war, which is not in Iran's best interest.

    -Alvin Tse prd.7

    ReplyDelete
  25. Even though I am not keeping up with the world news, my opinion on this article is that what Iran is trying to achieve by blocking the strait of hormuz is only going to cause more conflict especially between America and the country that needs it most such as countries in Asia. This would only make majority of Americans angrier because then the gas prices will inflate to over 4 dollars and with these tough economic times nobody is willing to pay that much. I think Iran should just drop the uneeded attention and just calm the tension between all the countries before it gets way out of control.
    -E.Park Period 9 WOrld History

    ReplyDelete
  26. This article is a perfect example of how the world is completely interdependent. No nation is able to produce all the goods and services they need because of aspects like land use, money, or natural resources that need to be used. For example, the U.S cannot produce sufficient oil because Iran has the abundance of it underground. It makes sense to trade and transport good throughout the world. Although this helps countries, it can also hurt them. If the oil supply from Iran was suddenly cut off or diminished, the U.S and all other countries that receive their oil will be set back and suffer from a shortage that will fluctuate their economies, and be a huge inconvinence to the people who need it.
    Kara period 7

    ReplyDelete
  27. Each country has resources by which they trade to other nations. Those nations depend on the resources traded. Economic benefit runs a two way street with trading resources. “You would get an international reaction that would not only be high, but irrationally high.” Everyone complains about how high gas prices are and yet no one can do much about it because the countries that supply the petrol need to make money or profit. Along with the gas companies, therefore, everyone needs to make profit and prices must increase to do so. “More than 85 percent of the oil and most of the natural gas that flows through the strait goes to China, Japan, India, South Korea and other Asian nations. But a blockade would have a ripple effect on global oil prices.” This proves my point as before. One change could cause many.
    -krupa pd9 world 10

    ReplyDelete
  28. If Iran closed the Strait of Hormuz oil prices would skyrocket. This would happen because the only way to get the oil would to be pay higher prices for the oil and the strait would be open again. Since Iraq, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates all rely on the oil from Iran to support their countries they would have to get it from somewhere else or pay more. samir licul

    ReplyDelete
  29. It would be very bad if Iran were to follow through with its threat to blockade the Strait of Hormuz. Its crazy to think that almost one-fifth of the oil trade globally would be impacted immediately. The fact that the price of oil could increase 50% or more within days is really scary. People are already struggling to pay their own gas. This change would upset many people. It’s very unfortunate that we have to depend on people for oil that we don’t get along with. Thankfully it seems that American officials have warned Iran against violating international laws that protect commercial shipping in international waters.
    - Michelle Romano p.6

    ReplyDelete
  30. If Iran closed the Strait of Hormuz, which is an important transit route for almost one-fifth of the oil traded globally, many countries in would be harmed. China is one of their major oil customers and invested in their oil fields. That can affect China's economy which could lead to greater happenings. This is also concerning to the United States because the price of oil can rise even higher than it already is. Even though we have other areas that supplies us oil, the path blocked would mean more money for transportation. I feel that United States should negotiate with them and not form any conflicts that could have harm to other countries as well.

    -SUAH KIM (World History 10, Period 9)

    ReplyDelete
  31. This is a very uncomfortable situation. Every country in the world needs oil, so we go to countries in the middle east like Iran. They have the most oil exported. They have a right to close off the strait if they wanted to. The oil belongs to them. All we can do is buy it. If they don't want to sell we can't just threaten them with military power. I feel as if we try to control Iran by having constant military presence near them. We are also trying to control their production of nuclear weapons. Nuclear weapons are dangerous in the wrong hands. If Iran wanted to, they could attack us with a nuclear missile if they produce it. That's the scary thing about these weapons. If we buy oil, we give them money to fund these weapons research. If we don't buy there oil, the cost of oil rises. It is not an ideal situation.
    -RuHu 9

    ReplyDelete
  32. This article showed how much our country depends on others, and how foreign policy affects everyone. If Iran were to blockade the Strait of Hormuz, we would lose one of the largest sources of oil in the world. The economy would suffer greatly, and we would have to either stop the blockade, or we would need to find another large source of oil to support our nation. Without a good foreign policy between US and Iran, we would be in quite a predicament.

    Period 9, C.N.

    ReplyDelete
  33. Our economy has been faltering. With Iran blockading the strait of Hormuz, It's an international violation. They're preventing international business from happening on sea. Iran doesn't have the right to prevent us from getting oil. If we can't get oil, the price of gas will increase by 50 percent per each gallon and our society will turn into an anarchy. Chaos will erupt, food prices will go up, jobs offerings with decrease, and already with the economy doing horrific as it is, more chaos will erupt if the price of gas goes up. I say we threaten them, and attack them if they don't let us pass the strait. Because of them millions of more people will lose jobs in our country, and I say we attack them with our ships. Or tell other countries that you're also getting put on the spot because you may be importing millions of barrels of oil from Iran. So i mean this article shows how pathetic Iran is and how they fail to conceal there misdemanors.

    XXX/ period 3

    ReplyDelete
  34. I'm pretty sure that Irans navy is not capable of holding a blockade over oil trade. In the time it would take the US and other countries to mobilize and completely destroy iran, nothing of importance would happen. I think Iran is being blown completely out of proportion, both in what they think they are capable of and the things they are making in their country. I feel like all this stuff is stacking in favor of the US declaring war on another country in the middle east, for a bunch of unproved reasons, going in and looking for things they are not going to find. It is going to be the same exact story, a few countries over.
    -Zeeshan Lakhaney

    ReplyDelete
  35. If the oil prices increase by 50% so that the prices reach $6.00-$8.00 per gallon then there will be no chance that i can pay the gas bill. It's just too much to ask for. If the blockade last long enough...the prices will sore leaving many to have to find alternate forms of transportation, like me. THe main problem is that oil doesn't only affect transportation, but our food and the products we produce causing everything to increase in price. We wont be able to keep up if the price sky rockets at one time.

    Mike Tennis

    ReplyDelete
  36. If Iran blocks the stright, the pump price will rise to 8 dollars or higher. If the gas pump price increases, the United States government will be in more of a strain. The reason why the United States government has been able to operate for so long and gradually improve was the cheap flow of oil. If the cost per barrel increase to over 50$, the United States will probably enter a larger debt becuase it will be more expensive to transport oil from Saudi, iraq or kuwait.
    I am hoping that Iran will not suceed because they are affecting the entire world. If they block the oil trade, they affect China a major trading partner for Iran. If China is ticked off, most probably the rest of the world will be mad. This result in a unnessarcy war over oil. Every country uses oil. Hopefully, the United States will not repeat another Iraqi war in Iran.
    Joel Thomas period 7

    ReplyDelete
  37. First , if Iran were to close the straight of hermuz the world's economy would go dramatically down very very quickly. Iran threatens the closeing of the pipeline because they know that by doing this they will make countries pay more for the oil, countries aren't happy about this but its the only way to keep them from closing the pipeline. Iran also knows that by closing the pipeline they would be screwing them selves aswell because the entire economy in Iran depends on it. Iran is talking and it shouldn't be taking seriously because what every they do its going to harm them either way.
    S.N. prd9

    ReplyDelete
  38. Iran should really think before blocking off the Strait of Hormuz because the impacts of would be immediate and it would make the price of energy much more expensive. Plus Iran already has rising tensions with the west, and blocking off the Strait of Hormuz would do nothing but increase those tensions. Even a partial blockage of the Strait would cost energy to sky rocket in price, costing up to 50 dollars more for a barrel of oil. Internationally, the blocking of the Strait of Hormuz would just cause an energy crisis.
    -Tim C Period 7

    ReplyDelete
  39. Who would have guessed that the next time i visit the gas station the reason for the high prices are based on a crisis that is happening half way around the world. Even though i highly doubt Iran will build a blockade because that would affect their business with the whole world, there is a possibility is can occur. If it does occur the reaction of the United States government raising gas prices more than 50 percent would devastate Americans. The problem is that the reaction of the global economy will also have a downfall. And if the Iranian's decide to attack the US or other allied forces, the US will tear the Iranian naval capacity apart.
    Erica Diaz
    Period 7 Economics

    ReplyDelete
  40. Well, I'm pretty sure that if World War 3 was going to happen, it would be over something like oil. If this one part of the world gets blockaded by Iran, not only would some countries economy start to decline, but there is a huge amount of civil unrest since oil affects the gas price. Even Iran is affected if they choose to blockade the strait of Hormuz because then they have no source of income as a country. The question is, what happens when the world runs out of oil from the strait of Hormuz?

    Kevin An~ Period 9

    ReplyDelete