Venezuelan and Iranian oil economic dilemma.

 CONFLICTING CONSEQUENCES

WAR WITH IRAN, HIGH STAKES GAMBLE

While Venezuela is still being sold as a positive development, it is way past the euphoria stage, reality is now sinking in. While some believed access to Venezuelan oil would offset any disruption of Mideast oil by the anticipated Iran war, it is now clear that this oil is a long term prospect at best. It will not, within the next 3 years, replace Mideast oil and it will not replace Mideast oil unless the market price of oil increase dramatically. This heavy oil needs a wide margin to make it profitable. An increase in the oil price will have very negative consequences for the Trump administration both economically and politically.

The other supposed benefit, was the denial of Venezuelan oil to China. China was buying this oil because it was being sold at real discounted prices, due to the U.S. sanctions, it was a lucrative price. At undiscounted prices it will not be that attractive on the world market. China bought this oil primarily to be used for the production of black top paving material. It also needed large quantities of Naphtha to thin the oil for pumping and the naphtha was imported from Russia. 

Then we have the expected attack on Iran, supposedly now imminent. An all out attack on Iran will likely cause a disruption of all exports from the gulf, causing the price to jump to over $100 a barrel. An oil disruption will cause a threat to the world economy, now under severe pressure in many areas. Of course, it may be possible that the neocons, enthused by their big win in Venezuela, believe they can overthrow Iran, with minimal damage to the oil business and no damage to Israel and U.S. personnel in the region. A long shot gamble even for these high rollers.

It is now clear that WW3 economic escalation is underway, Russia, after the U.S. backed attack on their nuclear control center and Putin's residence, understands that all supposed negotiations were just a load of subterfuge. China also understands that war with Iran, while much about ensuring Israel's quest for Mideast hegemony, is also an attempt to strangle China's energy supplies. We are about to see economic war move to the next level.

Today silver blew up to over $84. an ounce and Gold near $4600. an indication of the rush to hard assets around the world. It is possible to now see the flight from U.S. debt instruments increasing and the rise in debt interest rates. There is already a ongoing restriction of important minerals and it is likely to escalate. This, coupled with attacks on shipping can only lead to eventual military conflict. Conflict that is now considered by many in the west as a video game conflict, it will not, it will be real war and no one will be immune.