petro-warfare

As I was cleaning house the other day a concept occurred to me in a striking manner.
I was ruminating, as I usually do in my spare time, on geopolitical dynamics of the present day and out of nowhere I had the idea that perhaps we might one day encounter an environment in which oil would be used as a weapon.
More specifically the price of oil and it's manipulation.

In some research several days prior to this I had uncovered details concerning OPEC that began to fall into place in the form of a shocking scenario.
The Organization of the Petroleum Exporting Countries is comprised of 13 nations. Two of which, Iran and Venezuela, are directly hostile to the US.  Five other countries could be described as sympathetic towards either Iran or Venezuela.

Let's pause for a moment and discuss how the price of oil is vitally important.
Oil is the basis for our world. More than 95% percent of all material things that make up our world are either made of oil, made with energy from oil, or made cheaper and more accessable by oil. If you don't yet see what I am getting at, do your own research and you will see that present living standards are not sustainable without oil. More specifically oil that is cheap and abundant. Cheap by my definition is below $120 a barrel. Technically speaking the fair market is around $105/b but that takes a while to explain. Current future's price at this moment is $71.30.

So the president of Iran says that we are "the great satan"... yadda yadda. And in September he said at the UN that we are waning in our power and influence. Our demise is at hand. Aside from the fact that I agree with the waning power and influence part, the point is that Mahmoud (aka: Tehran's Hitler) is invested in our demise.

Pausing again, let's discuss the ramifications of an ever-rising price of oil.
Oil is priced in US dollars. As the supply and demand of oil expand and contract it causes the futures price of oil to rise and fall. As oil falls the dollar stands to rise in value against other currencies. As oil price rises the dollar has reason to fall in value. Some currency pairs such as Euro/ US Dollar often trade "sympathetically" as traders call it, to the price of oil.
As oil prices rise the cost of materials increases also. The cost of energy increases and takes with it the cost of transporting goods from shanghai to you local Walmart.
The cost of food is greatly impacted, which we are able to grow in present volumes because of petro-fertilizers. We yield higher per acre also because of petro-insecticides. Agribusiness labor cost's are kept low by our petro-built and diesel powered farming equipment.
If it were just as simple as the price of gas, that one issue alone could cripple even a healthy economy.

Add all of this up and crunch the numbers, you realize that manipulating the price of oil is a powerful weapon.
How do you manipulate the price of oil?
Take your pick: supply-side or demand-side.
If you were Mahmoud, you might pick the supply side.