Ed Lasky, over at the American Thinker, has discounted the threat that Iran poses to global oil markets. He argues compellingly that newly discovered and very large deep-water oil reserves have been discovered in the Gulf of Mexico, that we now have a strategic petroleum reserve to buffer changes (which we didn't have in the '70s), that there has been increased development of African off-shore deepwater fields, and that new oil fields are coming on line in Saudi Arabia. Taken together, he believes that Iran withholding oil from global markets would have little if any effect on global and US markets, and that Ahmadinejad and his disturbingly rational rants can be safely ignored.
He may be right in the short term. After all, the "risk premium" -- or the $20 per barrel we were tacking on to the price of oil to buffer potential supply shortfalls -- has largely evaporated since Bush stopped talking so tough on Iran. (Indeed, in the short- to medium-term, Bush's actions are those most directly responsible for the recent hike in our gas prices: the invasion of Iraq took a good chunk of Persian Gulf oil offline, reducing OPEC's excess production capacity to just above demand, and saber-rattling with Iran unsettled the nerves of oil traders already concerned that a major supply crash could follow.)
But what about the long-term? Lasky makes no mention of India and China, and without a recognition of their growing demand for petroleum, his analysis is almost meaningless. The bottom line is that even with big new discoveries, we are discovering new reserves at a slower rate than we are using them up. Iran may not pose a threat to oil markets today or this year or next year, but the continuing expansion of China's and India's demand for oil will narrow the supply gap until, once again, we're paying a $20, maybe $50, risk premium for the off-chance that 100,000 bpd of production is shut down in Nigeria because some guy gets kidnapped.