Report: Nuclear Iran Means Double Oil Prices

Oil prices could nearly double, costing the United States millions of jobs, if Iran is permitted to obtain a nuclear weapon — even if the Iranians don’t use the weapon, a new report warns.

The Bipartisan Policy Center’s report says that gasoline prices could increase by more than 70 percent, by up to $2.75 per gallon, sending inflation skyrocketing, driving America “into a severe recession,” and costing the country “more than five million jobs.”

The report was written by a team of former military leaders, economists, and lawmakers. It states: “Our analysis suggests that a nuclear Iran would heighten expectation of potential future disruptions, which should translate, if understood properly, into an increased risk premium added onto oil prices for as long as the concerns and tensions remain.

“In other words, anticipation of future energy oil disruption would be priced into the market, leading to higher oil and gasoline prices.”

The report’s authors “think that the expectation alone of instability and conflict that a nuclear Iran could trigger” could increase the price of oil, said Michael Makovsky, director of the Bipartisan Policy Center’s Foreign Policy Project, speaking to reporters on Wednesday during a discussion about the report.

Former Democratic Sen. Charles Robb told the audience that while much attention has been given to the costs of preventive military action against Iran, “inaction also poses economic risks. Heightened expectation and instability triggered by the consequences of a nuclear Iran would cause the price of oil to go much higher and remain high, significantly impacting the U.S. economy.”

In the short term, oil prices could rise by $11 to $27 a barrel after Iran announces it has a working nuclear bomb, according to the report. And prices could soar by up to $55 a barrel in the following three years.

A nuclear-armed Iran could easily disrupt the flow of oil by closing the Strait of Hormuz, cutting off the supply of Saudi Arabian oil — and leading the Saudis to seek nuclear weapons as well, according to the Center’s analysis, which was reported by the Washington Free Beacon.

The Center’s report adds: “If any of the conflicts or energy disruptions that become more likely from a nuclear Iran actually occur, the energy impact and economic consequences would be more severe.”

And Dennis Ross, a former Middle East adviser to President Obama, warns: “It’s hard to imagine Iran with nuclear weapons behaving more responsibly than they are today.”