War In the Middle East Could Mean $6 Gas

Even if Israel effectively dismantles all of Iran's nuclear sites, Iran's nuclear expertise and its intent cannot be eradicated.

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Gregg Laskoski is a senior petroleum analyst for GasBuddy.com.

Israeli Prime Minister Binyamin Netanyahu met with U.S. President Barack Obama at the White House four weeks ago to discuss the perplexing problem Israel faces in the prospect of a nuclear-armed Iran.

When The Economist editorialized on the subject in February, it noted that the world has negotiated with Iran; it has balanced  the pain of economic sanctions with the promise of reward if Iran unambiguously forsakes the bomb. And yet, this stand-off looks as if it is about to fail. Iran has continued enriching uranium and is acquiring the technology needed for a very dangerous weapon.

[See a collection of political cartoons on Iran.]

Israel has not ruled out a pre-emptive strike. But its leaders know that even if Israel effectively dismantles all of Iran's nuclear sites, Iran's nuclear expertise and its intent cannot be eradicated.

And that is why patience and allowing Iran's own people to bring about regime change is more likely to succeed. Is there a danger that Iran will get a nuclear weapon before that happens? The Economist asked that question and answered, "Yes, but bombing might only increase the risk."

If war erupts in the Middle East crude oil could spike to $200 per barrel, according to the intelligence report U.S. Secretary of Defense Leon Panetta cited earlier this year. Such an event, analysts say, could add $2.50 to the current price at the pump, as every $10 increase in crude oil generally translates into a 25 cent increase in the retail price. Obviously that’s a recipe for economic devastation with global reach.

[Read the U.S. News debate: Should the U.S. Discourage Israel From Attacking Iran?]

At the White House on March 5, Obama and Netanyahu spoke to each other for three hours. According to The New York Times, President Obama stated the following before the start of their three hours of talks: "We do believe that there is still a window that allows for a diplomatic resolution to this issue. "

Prime Minister Netanyahu withheld his reflections until after the talks concluded. He said: "We waited for diplomacy to work; we've waited for sanctions to work; none of us can afford to wait much longer. " 

Obama continues to press Israel to resist strikes on Iran. For now, the only thing that is clear is that Israel can count on very little, particularly if it waits until after the U.S. election to launch a pre-emptive strike. When the two leaders had met before, in May of 2011, Netanyahu said Israel would not pursue a "peace based on illusions. " 

[Mort Zuckerman: If the U.S. and the World Won't Stop Iran, Israel Will Act Alone]

Whether Obama's top priority is U.S. national security or that of Israel's may stir some discussion. According to the Israeli daily newspaper Maariv, the Obama administration offered Israel advanced, bunker-busting bombs and long-range refueling planes, but with one string attached—Israel would only get the weapons if it agreed to delay a possible attack on Iran's nuclear facilities until after the U.S. election.

Until the U.S. president clarifies what the U.S. commitment to Israel is and is not, we can only guess. Hopefully, Netanyahu guesses correctly. Self-preservation is a powerful thing and cannot be left to interpretation. A mistake by either party could mean $6.50 per gallon gasoline in Peoria.

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