The Observer speculates today that Iran crisis ‘could drive oil over $90′. Actually, the paper is quoting the Economist Intelligence Unit when it comes up with this figure but that hardly diminishes the sense of concern being felt around the world as the UN security council decides how to proceed against Iran’s nuclear build-up.
Bit of perspective here. The last time oil prices hit $90 (adjusting for inflation that is) was in 1980. The reason then? Iran again as prices spiked to all-time highs following first the fall of the Shah and then the start of the Iraq-Iran war.
With global supplies remaining tight for the foreseeable future (the Observer article quotes another analyst who estimates it will take two years for producers to recover spare production/refining capacity), any other oil shock - are we all keeping an eye on Nigeria? - will be bad in the short and long term.