Iran is really painting itself into a corner over its nuclear program. Not only is Israel widely expected to attack Iran in the coming months, but now Iran is further alienating the West by cutting off oil supplies to Britain and France. The move is likely to backfire, however, because Britain and France have already made great strides to stop buying oil from Iran.
France's Total, the state-run oil company and the largest in the country, has already stopped buying oil from Iran entirely. On top of the cutbacks, Saudi Arabia has agreed to step in and supply the EU with any shortfalls in oil from Iran.
As a former oil trader, these are the types of things that would usually get me excited. But it looks like the world is so sick of Iran's shit that everything has already been priced in and viable alternatives to Iranian oil have already been found. What would normally be a pretty dramatic trading event is likely little more than a tempest in a teacup at this point.
Which brings me to my question: where does Iran go next when all this fails? The US has already dispatched ships to counter any blockage to the Straits of Hormuz and Saudi Arabia has already marginalized the impact of any Iranian oil shortage. What other bargaining chip does Iran hold?
I'll be the first to admit that I wasn't overly concerned about Iran becoming a nuclear state; I just don't believe they're that relevant as a country. But I'll also admit that if Iran's nuclear ambitions can be easily confounded, why not? One less nuclear country in the world has to be a good thing.
With Israeli-backed militants planting magnet-bombs on the cars of Iranian nuclear scientists and other regional oil producers willing to profit from Iran's pain, why not pull Iran's teeth now? I'm not suggesting any kind of military intervention on the part of the US, more just a taking of the world's oil business elsewhere.
As much as I was against the Iraq War and the lies that were told to get us into it, it might yet serve some purpose vis a vis the Iranian people realizing that if they don't overthrow their own government, a coalition of Western governments might come in and do it for them.
In either case, I'd normally be all over long oil right now, but I'm just not convinced Iran is going to provide any more pop to the oil market. I'd love to hear from other energy traders. Am I missing something? Is Iran still a major factor in the market? Or are they just another Middle-Eastern backwater trying to capitalize on their 15 minutes of fame?