'Axis of Anxiety' boosts fuel prices

What's important to realize is that oil traders wouldn't be taking this seriously if the matter weren't truly serious. It is. According to leading geopolitical analysts at TIS Group in Minneapolis, all the arguments that Iran apologists have made in the past about the many years it would take Tehran to build a nuclear bomb "are falling by the wayside." According to the International Atomic Energy Administration, Iran is becoming more effective at enriching uranium and has begun to feed 2,300 kilograms of uranium hexafluoride into its nuclear plant centrifuges, up from 1,650 kilograms in the prior 10 months. TIS Group says the current production of enriched uranium is not sufficient to build a bomb but that Iran scientists could probably do it by the end of the year.

How real is the risk?

You can figure that Bush will not allow his term to end with Iran in possession of a nuclear bomb, and likewise believe that Saudi Arabia and Kuwait are not anxious to see Tehran become a nuclear power, either. As a result, the Arab nations might well stand by and do little more than flap their gums if Israel or the United States attacks. Russia, which is wary of Iran despite its alliance of convenience, doesn't want a nuclear power on its southern flank, either.

TIS concludes that Iranians would take the risk to build a bomb if they can, and would use their prodigious skills as negotiators and procrastinators -- they did invent chess after all -- to continue to wave off United Nations resolutions. "Iran's desire all along is to become the dominant power in the Mideast," say TIS analysts. "Development of a bomb could place them in that position. It would be the culmination of years of work and calculated deception . . . and it would place Iran in an advantageous negotiating position with its neighbors and with Europe. Why quit now?"

Why quit, indeed? In short, do not count on the risk premium stemming from the Iran wing of the Axis of Anxiety to go away anytime soon. To take advantage of the potential for oil prices to stay above $100 for the rest of the year, on big dips buy major energy companies rated highest by the MSN StockScouter that remain cheap on a price/earnings basis, including Weatherford International (WFT, news, msgs), Nexen (NXY, news, msgs), Plains Exploration & Production (PXP, news, msgs) and SandRidge Energy (SD, news, msgs).

Fine print

Ahmadinejad has a blog, but it hasn't been updated lately. BBC profiled him here. . . . To learn more about TIS Group, click here. . . . This ABC report claimed Iran could be ready to go with a nuclear bomb by 2009. . . . This Washington Post article on the increase in Iranian, Venezuelan and Russian oil wealth is helpful.

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At the time of publication, Jon Markman owned or controlled shares of the following companies mentioned in this column: Weatherford International, Plains Exploration & Production and SandRidge Energy.

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