I wrote an article about Iran's strategy in January to embargo European Union countries from receiving Iranian oil in retaliation for the EU ban on Iranian oil that would take effect in July. Maybe. Or August or sometime. The consequences were outlined at that time:
“Experts believe that once Iran’s oil embargo takes effect, there will be a surge in oil prices and Iran will definitely be one of the parties that will benefit from the rising prices. In fact, it is only Western countries that will be losers due to the oil price hike.”
One trip to the gas station today verifies this warning. On February 19th, Iran imposed an oil embargo on the United Kingdom and France. My first thought was what about Germany? After all Germany was instrumental in organizing this embargo. Does Germany not import oil from Iran?
German imports of crude oil from Syria and Iran fell last year while Europe’s biggest economy doubled its imports of the fuel from Iraq, the Berlin-based Economy Ministry said today in a report.
More information on German energy imports is shown at the end of this article.
Why is no one asking the obvious question twenty-four hours later? Germany is the key to the future of the European Union (or the Eurozone) and its future may be a German dominated confederation. But who controls Germany? Look no further than who controls energy in Europe today: Russia. Russia also has a tight leash on Iran with nuclear technology (at least for a little while longer), military defense systemsand defense treaties.
As our economy is drained by increased energy costs, what are our options? Saudi Arabia's oil production is falling instead of rising to offset demand. Or is it? Is demand actually rising as the world's economies are declining?
Here is a chart of January gasoline prices:
We are at a record high for the price of gas in January and there is no need to comment on the current price. But what if the prices are being manipulated?
U.S. oil demand continues to plummet, but supply-side risks keep prices elevated.
The Department of Energy reported this morning that in the week ending Jan. 27 , U.S. crude oil inventories increased by 4.2 million barrels, gasoline inventories increased by 3 million barrels, distillate inventories decreased by 0.1 million barrels, and total petroleum inventories increased by 8.4 million barrels.
Fortunately for the United States, our winter has been mild. Unfortunately for Europe, their winter has been severe and Russia has made it very clear who controls their energy. Who controls our energy production and costs? Our government understands that the key to controlling people is energy. The latest example is the Keystonepipeline from Canada to Texas that was rejected by the Obama administration. As gasoline is projected to reach $5.00 a gallon by summer, our options are becoming limited. The cost of food is increasing even faster than energy. A can of corn that was 50 cents 18 months ago is now $1.25. I guess it is a good time to be a terrorist (according to our government) who had the foresight to stock up on food for the past three years.
Crude oil imports from Iran declined 45 percent to 821,000 tons, ranking it 15th among German suppliers. Imports from 9th- ranked Syria declined 42 percent to 1.57 million tons, the report said. Imports of crude oil from Iraq rose 50 percent to 759,000 tons from in 2010.
The report showed that Russia remained Germany’s biggest source of crude last year, increasing its exports to 35.2 million tons from 33.9 million tons. Germany’s total imports of crude oil last year declined 2.9 percent to 90.5 million tons, the report said.