Iran says current OPEC production is enough:

Iran, OPEC’s second-largest oil producer, said on Saturday it does not foresee any change in the cartel’s output ceiling to be decided at the Sept 11 meeting in Vienna.

‘It seems that the current OPEC production is enough and that at the next meeting the current ceiling will be kept,’ caretaker Oil Minister Gholam Hossein Nozari was quoted as saying by the ISNA news agency.

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There had been growing calls from consumers for an increase in production after the price of crude rose to record highs of just under 80 dollars a barrel.

However Vaziri Hamaneh attributed surging oil prices to political concerns and a shortage of petrol in the United States during the summer holiday season, and said they were unrelated to OPEC quotas.

What Happens If Iran Blocks The Strait Of Hormuz?:

As tensions simmer between the U.S. and Iran, a big energy threat hangs over the world.

Iran has said that if the U.S. attacks, it will respond by disrupting trade through the Strait of Hormuz — the narrow gateway that tankers use to bring oil from the Persian Gulf to the rest of the world. About two-fifths of the world’s seaborne oil passes through the Strait.

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Iran’s threats to disrupt oil have come from as high up as Supreme Leader Ayatollah Ali Khamenei. If any country attacks Iran, “shipment of energy from this region will be seriously jeopardized,” Ayatollah Khamenei said in a June 2006 speech. He also said the U.S. and its allies won’t be able to provide security to all the shipments that transit close to Iran’s coast. Iran’s oil minister at the time, Kazem Vaziri Hamaneh, later said that if the country’s interests are attacked, oil would be used as a weapon.

While most security and regional analysts doubt Iran’s ability to block exports for any amount of time, recent naval exercises indicate Iran is testing its ability to do so, with antiship missiles and mines, according to the commander of U.S. naval forces in the region. But blocking the Strait would be difficult, says Vice Admiral Kevin Cosgriff, commander of the U.S. Fifth Fleet. And the U.S. and other countries that rely on trade through the passage would be forced to act.

Please see both articles, especially the second one above, for more details.

So why, one may ask, is the Bush administration so openly drooling over the prospect of war with Iran? Those who closely follow the US political scene have seen a long series of articles about how there is a civil war inside the White House over whether to attack Iran, with reports differing on which side is winning the argument and even what their motives are.

I think this is another of those situations where we can get lost in the endless discussions about What The Hawks Really Wants, i.e. does they really believe the neocon idiocy about serial regime change in the Middle East? Are they just trying to jump-start the rapture? (Yes, I’ve heard that one a lot.) Are they scared to death about peak oil and looking for a way to take a lot of it off the market, even at the price of causing a bad worldwide recession, to force a more aggressive transition and delay the geologically forced decline in production? Or are they simply trying to funnel yet more money from the US treasury into the pockets of defense contractors, using whatever excuse they can drum up? (Hey, it worked once. PLus there was that oil and natural gas thing in Iraq…)

I’ve looked at this particular problem from every angle I can imagine, read everything I could get my hands on, and I’ve concluded I don’t know diddly about what’s really going on. Perhaps we need to bust the Kremlinologists out of retirement and ask them what the hell is going on in the White House.

And as for Iran–if you were in charge of their energy policy, why on earth would you want to increase OPEC’s output? The world’s #1 oil consumer imports over 68% of that oil, and they’re saber rattling non-stop. So why wouldn’t you want to keep oil prices high, maximize your revenues, and do as much as you can to hurt the US economy, even if you don’t sell oil to them directly? And if you can, make some noise about blocking Hormuz, just to push up oil prices even more without having to reduce production. I don’t think decisions come much easier than that on the international front.