Will Middle East Missiles Mean Gas Price Increases?

In a complete surprise to absolutely no one, Gaza militants/peace activists launched several rockets into southern Israel Thursday. The attacks came a few hours after Israel, also in a complete surprise to no one, launched an air strike into Gaza, killing one Palestinian. Imagine that. Israel bombs a neighborhood and the Palestinians bomb one back. An eye for an eye, right? Well, not exactly. No Israelis were hurt, but between two and a dozen Palestinians were killed in the attacks. So we have a handful dead and absolutely no change in the situation between the two nations. Lovely. In another completely shocking story, Iran has shot down and captured what it says is a United States drone plane. The plane was presumably on another spying and recon mission inside Iran — a violation of Iran's territorial lines. It is also one more step in a march toward war with Iran, which is something the right wing and the military junta in this country have been itching for since 2000, if not sooner. Meanwhile, commodity traders are drooling at the prospect of high-priced oil, or at least the volatile period as the commodity rises. Options traders are playing $150 calls on oil, hoping to cash in on a significant rise in prices. What would spark such a boom in oil prices? Violence in the Middle East. You know, things like back-and-forth rocket attacks and a third war in the region between the United States and random brown people. The other overhanging item on the oil market is the possibility that the UN, or at least the West, will ban the importation of oil from Iran. That could drive prices to $250 a barrel, according to Ramin Mehmanparast, an Iranian foreign ministry spokesman. What does this mean to you? In the end, probably nothing. Israel and her neighbors have been fighting since about 15 minutes after Israel was re-established in the post WWII era. A minor attach isn't going to spark much in that battle. As for Iran, the short and medium term is probably a safe bet. The president, who has promised an end to hostilities in Afghanistan and ended the Iraq war, is unlikely to launch an attack on Iran (short of, say, Iran exploding a dirty bomb in NYC or LA). He is also unlikely to start a war over Iran shooting down our spy pilot-less planes, as he would have to admit that we're spying on Iran in order to do so. It'd be like calling the cops to report your marijuana was stolen. But Israel could attack the Iranians. That's the concern I would have if I were an oil trader. While it wouldn't have quite as much long term impact as a boycott of Iranian oil, the disruption to the supply chain caused by an Israeli attack on Iran's (cough) peaceful nuclear reactors. Whatever the case, if you trade oil in any format, keep an eye on those two developments. Like my stories? You can subscribe for my free newsletter here. Read more of my stories at Benzinga. You can also reach me by email john@benzinga.com or on twitter @johndthorpe.