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That's the message from two of the world's most successful investors on the topic of high oil prices. One of them, Hermitage Capital's Bill Browder, has outlined six scenarios that could take oil up to a downright terrifying $262 a barrel.
The fall of the House of Saud seems the most far-fetched of the six possibilities, and it's the one that generates that $262 a barrel.
More realistic -- and therefore more chilling -- would be the scenario where Iran declares an oil embargo a la OPEC in 1973, which Browder thinks could cause oil to double to $131 a barrel. Other outcomes include an embargo by Venezuelan strongman Hugo Chavez ($111 a barrel), civil war in Nigeria ($98 a barrel), unrest and violence in Algeria ($79 a barrel) and major attacks on infrastructure by the insurgency in Iraq ($88 a barrel).
"Every day we send them 1.5 million barrels of oil," said Chavez. "What would happen if tomorrow I were to say that no ship leaves for the United States?"
"How high would the price of a barrel go? I think it could hit $100," he said, making clear the idea wasn't being considering at present but was possible if the U.S. were to try to oust him.
Experts see $100 a barrel oil
Geopolitical conflicts taking their toll: Iran issue alone could cause disruption.
Experts say the Iran issue alone could push oil prices past $100 a barrel. If the U.N. Security Council were to authorize sanctions against Tehran, which the West accuses of trying to make nuclear bombs, Iran has threatened to curb oil exports in retaliation.
"Even if Iran pulled a small amount of its oil off the market, say it pulled a half million barrels a day, I could see oil prices literally jumping over the $100 per barrel mark," said James Bartis, a senior researcher at Rand Corp.
A sharp global economic slowdown could follow. That's the dilemma the United States and European nations face as they decide whether to act.
Originally posted by Teph2112
And this is why you should never rely on one source
Oil's just gonna get more expensive
it might drop a bit here and there
but lets face it, theres gonna be no more oil