Pimco's 4 "Iran Invasion" Oil Price Scenarios: From $140 To "Doomsday"

[dkf]

Pimco's Greg Sharenow has released a white paper on what the Newport Beach company believes are the 4 possible outcomes should Iranian nuclear facilities be struck as increasingly more believe will happen given enough time. The conclusion is sensible enough "Whenever the global economy is in a fragile state, as it is today, geopolitical concerns such as the possibility of a strike on Iran’s nuclear facilities become much more exaggerated. Although we cannot (and will not) predict whether an attack is imminent, or even likely, our experience and research tells us that any major disruption in the supply of oil from Iran could have either subtle or profound global repercussions – especially as excess capacity is virtually exhausted and we doubt that other OPEC nations would be able to compensate for a reduction in Iranian oil production." As for those looking for numbers associated with the 4 scenarios presented by PIMCO here they are: "i) Scenario 1: Exports minimally effected. Concerns would drive initial price response; Oil could spike initially to $130 to $140 per barrel and then settle in a higher range, around $120 to $125; ii) Scenario 2: Iranian exports cut off for one month. In this case, we would expect prices could reach previous all-time highs of $145/bbl or even higher depending on issues with shipping; iii) Scenario 3: Iranian exports are lost for half a year. We think oil prices could probably rally and average $150 for the six months, with notable spikes above that level; iv) Scenario 4: Greater loss of production from around the region, either through subsequent Iranian response or due to lack of ability to move oil through Straits of Hormuz. This is the Armageddon scenario in which oil prices could soar, significantly constraining global growth. Forecasting prices in the prior scenarios is dangerous enough. So, we won’t even begin to forecast a cap or target price in this final Doomsday scenario." Needless to say, even the modest Scenario 1 is enough to collapse global economic growth by several percentage points to the point where not even coordinated global printing will do much.

http://www.zerohedge.com/news/pimcos-4-iran-invasion-oil-price-scenarios-140-doomsday

[teddy51]

1. I think if Iran is hit (and I don't think it will happen) if China and Russia

pick sides, this could be "Doomsday". NATO has taken a decidedly turn for the worse over the last few years, with the UK electing a Conservative Government, and Canada electing a majority Conservative Govt.

[Old and In the Way]

3. Couple an attack, with China dumping USD reserves.....now that would

be devastating with our economy.

[teddy51]

4. I agree, and I don't give a damn how much armament we have, if we can't

afford the fuel to run them, we are screwed. And lets not forget, if China has the means of getting it's troops onto US soil, we are screwed by shear numbers (Ground war).

[krucial]

2. Iran Attack

This is probably what many of the many Rapture Ready crowd has in mind,end times for all of us.
They don't care about anything else in the world,but make sure we eliminate any perceived threat that might possibly at some time down the road in the future,threaten Israel.
Any perceived threat to israel,is also framed as a threat to America and the world,by our controlled leaders