Will Iran slam brakes on shaky US recovery?
Gas prices spike as Tehran talks tough
- Duration 8:13
- Date Jul 7, 2012
Gas prices spike as Tehran talks tough
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Gas prices picking up here as Iran threatens to close down a key oil route over there.
The rogue nation warning it'll fire missiles -- US bases in the region at -- attacked over its nuclear program.
The runup in gas comes just as drivers were starting to get a break at the pump.
So could this new threat slammed the brakes -- already shaky recovery -- whole -- everybody.
I'm Cheryl Casone let's get -- -- -- this way Brian Rogers Jonathan Hoenig Tracy Byrnes shot late build it back.
Also learning is as we Kristin RC is back so welcome to all of its good to see all of you here.
All right John the Saber rattling over -- -- really hit the US.
In the pocketbook -- bank.
There's no doubt about it -- -- a lot this is not getting bigger play it just the Middle East has had some problems for so long that Saber rattling is not a big deal but this is the biggest dark cloud this economy no matter what happens in Europe.
It's gonna take months led to develop.
I ran is now producing a million barrels of all day that it cannot sell market -- the run out of storage within the next few weeks something has to happen -- have to shut these wells down what they don't wanna do are given to the sanctions.
Which they don't want to do our do something stupid and if they do something stupid are Israel decides to preempt them from doing something stupid.
That could really take this economy right off the -- the united state.
So -- you know Americans for the most part have been enjoying lower gas prices that's been helping things out but if this situation with Iran does get more dangerous we do have a problem there.
Does it hurt Americans here.
Well first to bottle think it's gonna get more dangerous I had disagree a little bit -- -- you've -- up on that mountain too long.
You -- anyway.
Yeah how well welcome back.
No I think I I don't think so I think our -- -- -- a little more than two million barrels a day down from three point eight million barrels a day.
Most of that oil is going in to take is that there anchoring offshore that that's being stored that's what they used for storage over there there's a lot of loyal wicked stuff threat.
Of this doing something that may bring up led by the way they turn this -- on it would take another couple of months that stuff has to get you know.
Made -- gasoline all of a Palestinian it's not gonna happen it's just the threat of this it's not gonna hurt the economy all of that time unless the people who are dealing and oil -- -- -- about the guys who.
Who are trading -- They could mess it up but otherwise it's not it's not a big deal quite I tell you what Christian that's the issue though is that if you've got this bearish traders work on the future.
And if they -- fearful about the future they're gonna take those crude prices up they -- did at this week more than 4% because of the Iran issue.
That means gas prices go higher what does that mean for the economy.
Well you know John identified correctly all of the dangerous what if scenarios here -- net speculative.
-- insight is what's really driving the price of Brent crude which affects US gas prices there'll so many what -- involved.
That this -- become divorced from real market dynamics of supply and demand.
If the worse comes to pass this is -- really.
Big bad deal -- we are so far from that at this point.
I wish the speculators would dial it down a little bit because we're used -- -- doing this they did this six months ago they did this for years ago.
Okay but let's just look at gas prices are right now there -- so well.
And still we don't see consumer spending that extra money.
Anywhere we so retail sales numbers that -- -- the same store sales that -- in the toilet consumer spending is down we've seen this.
You got gas prices that wraps it up a little bit that is not gonna help this economy at all is the last thing that we need right now -- I agree with that but I mean let's say Iran shut off the straits of Hormuz completely Cheryl I mean what hurt us and won't work -- wasn't it a ban on imports is German sausage it was German sable rattling it was German and militarily.
ICG Iran very much is a military threat not so much economic threat I mean who -- to lower the cost of -- your home god knows we're fighting the environmentalists who do their best.
To keep -- higher taxes -- talked about.
Our big part of of the cost of gas so -- -- the part of that but I'm more worried about your spiritual and financial assistance to militant Islam.
-- which forget even 9/11 of the USS Cole has been 51 either attacks or attempted attacks on the US.
From militant Islamic image in the last decade -- -- -- -- worried about -- -- -- I don't.
I -- John -- your point about the Persian gulf as well take and that's a third of the world's oil supply.
In particular the -- isn't enough where the last things the Iran -- tab because of the sanctions.
They shut that down that that disrupts the world supply that.
I think more than -- in our history this is more of a real threat today than it has been in the past because of the sanctions against the country.
That that is exactly right -- had -- were getting to that inflection point in our -- they are using the tanker just like Wayne said but they used up two thirds of her tiger capacity.
And restoring a million barrels a -- -- -- -- produce and that they cannot sell on the open market they're going to be out of capacity in the next.
Twenty to thirty days that means something has to happen -- 40% inflation they have double digit unemployment.
This regime to stay in power has to either agree to these sanctions are do something stupid and if they do something stupid is what Thomas -- to his word about -- Kansas City fed chief.
Has word about for years if you have a systemic shock in this global economy right now but doesn't pay interest rates are so low there's no -- for the end to react to this death this could be could be not necessarily a worst case scenario.
A Christian you know energy inflation gas price inflation is still.
Inflation what does that mean for the economy -- I mean that's that's that's an economic negative.
You know if the worst comes to pass which I don't think it will but if it does that is a huge shock to -- economy that will affect the United States substantially at a time where we are -- But let's keep in mind.
The world economy is sluggish and United States is not quite a sluggish but we still.
Are very vulnerable to outside shots it puts the pressure on us to really write our economic ship at home so we can absorb.
These issues that happen in the world from time to time I -- have that come into treasuries are the worst comes the past what do you what do you mean is the worse what he quickly what are you using as the worst.
Well if the worst comes to pass that Iran actually closes the -- -- for the straight a formal event then I wanna get under United States split then apparently yeah.
Don't ask -- questions issue what about that -- -- can -- That that's good.
This comes the past and they close administrator for moves they're probably requires that the United States along with his European allies.
Go into military intervention to keep the straight open that creates a global -- our military and economic.
I understand I -- -- I I my in my version of the worst coming to pass will be Iran getting a nuclear bomb getting any cooler suburbs to worrying on it.
That's what I would envision being the worst coming towards the past it has been knew the price of -- but that's their ultimate goal.
Have always have the same time as we get back to the US economy and if -- -- obviously what does happen in the Middle East does it backed.
The United States you still even if we do get some of these artists playing upbeat if you still love that you think the economy strong enough to withstand it right.
All yeah I -- economy strong enough to withstand it and and even if they do this is that said it's a threat and if they -- if they exercised on the threat the rest of the world -- open up the stripes immediately.
Yes the biggest danger and Jonathan is ultimately right they added that the biggest danger is that this will boil over into some sort of a military confrontation.
And that confrontation is the one thing.
That could upset well I think it's not the price a more -- and a lot of that oil is getting smuggled out of there -- a lot of those things you don't know where will oil comes on the world market half of those ships so that they -- miss -- that defeated all the public kind of -- it goes on all the time oil trading is a -- big stadium and it happens all the time it's not a question -- -- oil prices going up.
-- we still a tablet like topic like this couple months because I ran.
Like a child stands up and does -- little Saber rattling the thing we keep talking -- this.
Is laughable we don't have an energy posse here in the country and that's the bottom line this is something John Layfield talks about every week we listed down that you aren't you glad that I.
We can get up and asks the root of the problem yeah are we gonna take control we -- -- get done late bill goes back and say it and sell.