Oil Prices Up Record on Iran Attack Plan News

Oil prices skyrocketed upwards $11/ barrel to a new high of $138/ barrel on reports of plans for a major attack of Iran.

Oil prices had their biggest gains ever on Friday, jumping nearly $11 to a new record above $138 a barrel, after a senior Israeli politician raised the specter of an attack on Iran and the dollar fell sharply against the euro.

Bush's recent speech to AIPAC, claims of insider knowledge of an impending American attack by Rush Limbaugh and talk of inevitable attack by the Israeli politician fueled fears of a major disruption of petroleum supplies.

A former German top diplomat, Joschka Fischersaid that Bush's recent middle east trip's purpose was to prepare for a major attack on Iran.

He wrote a piece that appeared in today's Daily Star, an English-language  Lebanese newspaper, arguing that President Bush's recent visit to the Middle East was a precursor to a war on Iran's nuclear program:

   The Middle East is drifting toward a new great confrontation in 2008.

He's not your typical know-nothing talking head. He is an expert on Iran.

Fischer said Bush's speech during his address to the Israeli Knesset, or parliament, this month indicated a coming Israeli-U.S. attack on Iran's nuclear program:

   He seemed to be planning, together with Israel, to end the Iranian nuclear program -- and to do so by military, rather than by diplomatic, means.... Although it is acknowledged in Israel that an attack on Iran's nuclear facilities would involve grave and hard-to-assess risks, the choice between acceptance of an Iranian bomb and an attempt at its military destruction, with all the attendant consequences, is clear. Israel won't stand by and wait for matters to take their course.

Fischer, former leader of Germany's Green Party, was one of the key diplomats involved in assessing Iran's nuclear facilities and pressuring Tehran for a temporary halt of its uranium enrichment program from 2003 to 2005, when he left office.

Shaul Mofaz, an Israeli government official recently said last Friday that an Israeli attack on Iran is inevitable if Iran continues developing nuclear capabilities.

Earlier Friday, the mass-circulation Yedioth Ahronoth newspaper quoted Mofaz as saying "if Iran continues with its program for developing nuclear weapons, we will attack it. The sanctions are ineffective."

"Attacking Iran, in order to stop its nuclear plans, will be unavoidable," the former Israel Defense Forces chief of staff who later served as defense minister told the newspaper.

It was the most explicit threat yet against Iran from a member of Prime Minister Ehud Olmert's government, which, like the Bush administration, has preferred to hint at force as a last resort should United Nations Security Council sanctions fail to achieve the desired abandonment of nuclear development by Tehran.

Mofaz also said in the interview that Iranian President Mahmoud Ahmadinejad, who has called for Israel to be wiped off the map, "would disappear before Israel does."

Dana Perino continues to claim that the U.S. favors a diplomatic approach, but the international oil markets don't believe her.

"The return of the Iranian risk premium calls for a careful assessment of the potential oil supply impact of military strikes on Iran," said Antoine Halff, an analyst at Newedge, an energy broker.

The strong volatility in energy markets in recent weeks have continued to puzzle investors and traders. Prices keep rising despite a lack of shortages in the market, and strong evidence of lower consumption in industrialized countries.

The skyrocketing of oil prices today is the result of thousands of expert investors betting that oil supplies will be disrupted. Otherwise the price of oil would drop because high prices have reduced demand.