Tuesday, February 14, 2012

Will Chatter About Iran And Return of 12th Imam Mahdi Drive Up Price of Oil

Is the Iranian leadership made up of reasonable men or are they driven by a sense of a divine mission? As tension builds over Iran's nuclear program, the answer to this question becomes important in calculating the risk of the Gulf of Hormuz being shut down and oil becoming very expensive.

There are numerous commentators that have posted that Iran's Supreme Leader Ayatollah Ali Khamanei  and President Mahmoud Ahmadinejad  believe that  the 12th Imam Mahdi will return to earth either as result of or to bring about the apocalyptic end of days. These commentators suggest that the Iranian leaders may be governing with the intent of triggering an apocalypse and hastening the appearance of the Mahdi

If the idea that Iranian leaders would welcome an apocalypse becomes commonplace, then it seems likely that the price of oil will be bid up due to a higher perceived risk factor that Iran will attempt to shut down the Gulf of Hormuz.

In regard to the short term price of oil, it is irrelevant as to whether the assumption  is correct that Ayatollah Khamanei and President Ahmadinejad  believe the 12th Imam Mahdi will return to earth. What really matters is whether oil traders come around to the opinion that the Iranian leadership are true believers. If oil traders become fearful the Ayatollah Khamanei may attempt to close down the Strait of Hormuz as an aspect of his divine mission, then the risk factor included in the price of oil will go even higher.

The following are a couple of recent posts on Iran and the return of the 12th Imam Madhi. When reading, ask yourself not only if you think they are credible, but also if you think this theory is likely to gain credence with oil traders.

Why Iran will not ‘come to its senses’

What Does the Ayatollah Want?

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