Iran… again…

As I stated in this piece I wrote some days ago, Iran is an importer of refined petroleum products. This information has caught a number of you unawares I am sure.

Today, you don’t have to take my word for it. Here is a piece by STRATFOR via John Mauldin. Stratfor is an entity that is considered to be one of the finest providers of geo/political insight in the world rather than some Italian geezer typing away at an $800 dollar computer. If you follow this link, you can sign up for free intelligence reports. If you don’t feel like going through the motions of signing up, I’ll reproduce the piece in its entirety at the bottom of my note. You can read the whole STRATFOR article here but I can tell you that it is nothing more than a badly put together bunch of facts trying to justify military action on Iran. For example, here is the bit that makes me laugh.

It may strike some as odd that Iran has acquired a capability to develop nuclear technology but still struggles to build and operate refineries on its own. There are a number of reasons for this, but the simple answer is that the technology for a nuclear program dates back to the 1930s and 1940s and has not changed much since, while refining technology is continually updated and Iran has been out of the global oil-and-gas mainstream for 30 years now. A nuclear weapons program requires a couple dozen or so highly trained scientists and engineers to operate it, and these personnel can be trained in any number of institutions around the world. On the other hand, a permanent staff for a refinery producing around 300,000 bpd would require some 1,200 highly trained technicians and petroleum engineers, and most of Iran’s intelligentsia — particularly the group with strong technical skills — left the country following the Iranian Revolution. Iran’s stated energy goals are full of delusion as well as ambition.”

If you don’t see the blind stupidity in that paragraph, let me parse it for you. Other than the fact that the rocket scientists at Stratfor would like you to believe that nuclear technology has stood still in 70 years, petroleum refining can be carried out with outdated equipment and mediocre technicians. You may not get super duper gasoline at the end of the process but if countries like Jordan can refine their own gasoline, I can most assuredly say that Iran could too. Besides, an extremely high percentage of Western refining capacity is carried out in facilities that are over 30 years old (hence the reason some of them blow up in times of high demand as was the case at the end of the speculative frenzy in the period 2005/2007). Few people will point out that we have not built ANY refining capacity in the West since the 60s. NONE!! Retooling a refinery is a costly affair that few countries and corporations have undertaken if any.

Now, if you read the whole STRATFOR piece, the only thing that is obvious is that Iran is more of a threat to itself than to the West and our way of life. Iran is mired in a socio/economic quagmire and would very likely implode if we could just find it in ourselves to leave them alone. Truly alone and unaided.

You think the straight of Horumz is a vital choke point of the world economy do you?

Great! I say lets circumvent it.

Consider the material cost of mobilizing militarily against Iran. Consider now the human cost of a war. Now consider the social cost not only to Iran but to the West too. Now consider the pity-full state of the West’s balance sheet not to mention the deplorable state of our schools, hospitals, health care systems, our roads and our electric grids if not our transport infrastructure. Why should we want to bring about even more destruction of property (ours or anyone else’s), dislocation of men and women and the hardship a war would bring about on society at large at the likely cost, too, of triggering other geo/political events that would bring about even more strife if, for example, China and/or Russia decided they too had something to say about what is going on?

Here is an idea. Lets bypass the straight of Hormuz all together. Why should we not build a pipeline from the Persian Gulf towards the West or even the North West and build a terminal on the Red Sea either in Saudi Arabia (a staunch ally of the West and, in my humble opinion, the only country that is a real threat to the West and our way of life if there ever was one) or in Jordan, or in Israel or, since we are at it, in all three countries? Surely the cost of a pipeline would be far less than a war and, instead of killing people, would employ tens of thousands of workers for a few years?

But who are we kidding right?

Bullion still looking very good to me

October 2 update –

I got a note from Stratfor asking me to remove the content I had posted and that was intended only for subscribers to their email alerts. You can read the piece by subscribing to John Mauldin free email service here and then checking the archives.

Apologies to STRATFOR


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One Response to “Iran… again…”

  1. Barak Obama warns Iran of “unmistakable message” on nuclear program « Guido's temple of the absurd Says:

    […] message” on nuclear program By guidoamm You may want to brush up on this post and this one too before you read this latest piece of […]

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