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July 9th, 2008
11:51 AM ET

What is the Iran connection?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/07/09/art.gas.gergen.jpg]

David Gergen
CNN Sr. Political Analyst
AC360° Contributor

It looks like gas could hit $5 a gallon shortly and perhaps even $6 a gallon by the end of the year. This is a huge problem for drivers, the auto industry and airlines, of course. And it could lead to significant changes in the way we live.

It also might have some grab in the presidential campaign: how much is the rumbling over a possible strike against Iran driving up prices? There was a lot of speculation last week about that. Then the price of oil went down yesterday because nothing happened over the weekend regarding Iran.

With Bush and the Israelis talking quietly about hitting Iran before Bush leaves office, and McCain and Obama in such different positions about how to handle Iran, it's worth exploring higher energy prices. What's behind them: is there really a conspiracy among speculators; what is the Iran connection?

Also, how hard would it be for Iran to close the Straits of Hormuz (where we have two aircraft carriers now)? How much is China now driving up prices?

And are Americans ready for a renaissance in nuclear power plants, as John McCain proposes? That's some of what the energy industry and the market are talking about.


Filed under: David Gergen • Iran • Oil • Raw Politics
soundoff (39 Responses)
  1. Wellington Nunu Phil

    If people look deeply at iran they will see a country that don't know where they going. When a killer wants to kill do they give warning shots.
    Iran is a loudness man in a room, The one that is scared in the room is always loud. The World has so many way to cut iran off from the World. Everyone had seen them trying weapon when no one doing anything to them.
    They are threaten other people and putting people in fear. The whole World is talking peace and you testing weapon to do what? Is time for the United Nations to step in and control the situations before it get out of hand. America do not get involve in any war the arab world is using this to send this country broke.
    Let America show to Iran that it care about iran citizens. Iran wants to make scrafy of it citizens and you know this is the way terroist get their way through. America think about those innocent people in iran they will die because of one fool.
    America show JAH LOVE, I'm not a english major I'm a Afircan major.

    July 10, 2008 at 10:49 am |
  2. Ruth

    What's the Iraq connection perhaps? Iran will certainly link up with it at some stage on any strategic map?I just know that if Govt and Business do not do something to subsidise workers soon, that no one will go to work, mark my words by the end of the year, friction and talk is already in the air...

    July 10, 2008 at 7:19 am |
  3. John Bangkok

    Of course the cost of gas is going to be US$6.00/gal. How do you expect the US to pay for stabilizing Iraq? On the bright side at least the US Military does not have to pay US consumer prices for there fuel.

    July 10, 2008 at 4:33 am |
  4. J.V.hodgson

    Dear Mr Gergen,
    Sorry the oil price issue between the US and Iran ( or other oil producing counties Iraq etc etc) is an "EFFECT" of other far more important anomalies and certainly not the CAUSE .
    The whole Middle eastern balance of power is the major cause, plus perhaps and certainly much less so the supply and demand arising thru China and other so called BRICS for Oil and maybe exacerbated by hedge fund speculators. We have at least 20 years.
    When will the US political establishment recognise that while Israel is both a Nuclear power( funded and given by America) and 110% supported by the your politicians, both parties and militarily by supplying modern warfare technology, is what is behind Irans non cooperation on Nuclear issues and pusuance of it's self defence ( missiles). And also why Palestinians moderate? Fatah and Hamas extremists are fighting against Israel. Add to this the "pre-emptive" strike against Iraq on false grounds and global Islamic jihad erupts.
    You want to avoid $8 a gallon or total loss of international respect the US especially and the International community had better start talking to people including Hamas, get out of Iraq, and
    allow people and governments anywhere to freely follow thier religion and method of governance as per your the US constitution, bill of rights and respect thier "sovereign immunity".
    Invest the $900bn at least you spend on the Iraq war within the US to create hundreds of thousands of new jobs and non oil technology and hello a new globally unwarmed environmentally friendly and peaceful world, within 20 years.
    Idealism, I think not, realism yes.
    Hodgson.

    July 10, 2008 at 3:36 am |
  5. michael

    what id like to know is what is the international law on nuclear energy and weapons. who is allowed to have them and who is not and why. has the iranian govt. done something unlawful or does the international comm. just not want the iranians govt to have nuclear energy or weapons. i thought that they had a legal right under some treaty that they signed which would allowe them to have nuclear energy and be monitored. please someone tell me what irans legal rights are under international law that they have agreed to.

    July 10, 2008 at 1:43 am |
  6. Jules

    I do appologise for my last statement. I keep refering to the USA when realy I should be just refering to Bush and his cronies.

    On the other hand, WHO VOTED HIM IN ?

    McCain will just continue to make matters worse and Obama is just hot air, you guys are at risk of making matters worse not better.

    The only person who would have made a difference is Clinton. The world was such a safe place when Clinton was there before. As soon as he went and Bush took over, look what happened. WAR WAR WAR

    July 10, 2008 at 12:28 am |
  7. Jules

    I cannot understand some people at all.
    Iran has been threatened by Israel and the USA for years. Israel is always testing its weapons and flaunts their neuclear power given to them by the USA. The USA and Israel are partners against Iran.
    Iran is not allowed to have a fellow supporter (according to their enemies) but of course they have, and rightly so. They also have a right to defend themselves against agressors such as Israel and the USA. They also, like everyone else have the right to test their weapons, as everyone else does.
    Leave them alone, they have only become a threat because they have been threatened.

    Whats wrong with you people, the WORLD is at war because the USA are paranoid about everyone they have threatened over the past few years. Bush is a bigger dictator than Hussain was but everyone is fooled into thinking there is a democracy.

    STOP Israel building in land that is not theirs, stop Israel from attacking their enemies just because they can get away with it and everything will settle. STOP JUST PRODDING THE FIRE cos it will get worse.

    July 10, 2008 at 12:06 am |
  8. Chris in Mayland

    Let's get a grip about Iran from a world perspective and stop being so myopic. Why is it a major crisis when Iran tests some missiles and their military men talk about being on guard to defend their country? They are a sovereign nation and have every right to protect themselves and provide a national defense. Nothing is ever said about our missiles aimed at every perceived threat, our big stick diplomacy and bullying tactics that have created animosity and hatred around the world. If we clean up our own act in this country, things will go much better globally. Why is Iran accused of playing cowboy politics? We invented the game and invaded a country and destroyed its culture and economy for the sake of a threat that didn't exist. Is there any country who shouldn't be concerned with the record of "diplomacy" we have?

    July 10, 2008 at 12:02 am |
  9. Chris

    Let's get a grip about Iran from a world perspective and stop being so myopic. Why is it a major crisis when Iran tests some missles and their military men talk about being on guard to defend their country? They are sovereign nation and have every right to protect themselves and provide a national defense. Nothing is ever said about our missiles aimed at every perceived threat, our big stick diplomacy and bullying tactics that have created animosity and hatred around the world. If we clean up our own act in this country, things will go much better globally. Why is Iran accused of playing cowboy politics? We invented the game and invaded a country and destroyed its culture and economy for the sake of a threat that didn't exist. Is there any country who shouldn't be concerned with the record of "diplomacy" we have?

    July 9, 2008 at 11:58 pm |
  10. Altina Smith Flordia

    We need to focus on this country that's the real threat we act like a we are afarid of this contry we went to war with Iraq and the didn'[t have any wepaons the yet this man calls our presidents out his name and tells us he want stop making missile and even fires a couple whats we still have not found the man who touch us on our soil and killed all those americans we are losing our homes and jobs and the only on getting rich is the oil field owners We need some young fresh meat in office with no ties to the oli monies so we can stright our face and stand tall get our people out of Iraq and get rrady to face the real threat If I was the president I would have to step to Iran and let them know it's a wrap and we can go toe to toe blow for blow Because this country don't play Bro

    July 9, 2008 at 11:54 pm |
  11. Tom from San Diego

    Consider where you think we would be today if either of the current Presidential candidates (or current President for that matter) had been president in place of JFK during the Cuban Missle crisis. Kruschev had proclaimed "We will bury you", and Russian missles were being readied to launch only 100 miles from the US.

    We should not be naive about the true purposes of other world powers who may think very differently than we do, but still it comes down to whether the principle of diplomatic influence is just for the deluded.

    July 9, 2008 at 11:50 pm |
  12. vern from philly

    IRAN wants what we all want ..peace and stability in the world, yea he might have said what he said about Israel, but look at the facts, look at what israel is about look at how they aquire their land.....by force they are doing exactly what happened to the native americans.....kill all and take their land and live upon a lie......1948 was the starting of israel and look how they went about it? forcefully.....is that right......is living on an occupied territory right...does occupied territory sound right come on wake up people........stop letting tyranny run ya life....war on terror is a bunch of bull because the terrorist is the current administration in office and Isreal as we speak.....Stop the violence!!!!!

    July 9, 2008 at 11:14 pm |
  13. Sunday Obikoya

    I just hope everybody will calm down and take a step back cause the only reason i think the iranians are taking this step is because they feel their security is threatened, mind you, likewise the isrealis. That is why i think that dialogue is the only only way forward, baring this i think the only thing remaining is the abyss. The world needs leaders who are "rational and not irrational"

    July 9, 2008 at 11:12 pm |
  14. Sabrina in Los Angeles

    We need to get away from oil.

    They show their military muscle and the gas prices go back up.

    July 9, 2008 at 7:47 pm |
  15. Kent Fitzsimmons,Kewanee, IL

    So Iraq will give contracts for oil to most of the oil companies now that Saddam is not around anymore huh? And now we see the real reason Bush went in and got rid of Saddam.............I knew it had nothing to do with him caring about the welfare of the people.............oil. oil, oil..............must be worth over 4,000 Am soldiers lives huh Bush?

    July 9, 2008 at 7:41 pm |
  16. Kent Fitzsimmons,Kewanee, IL

    Groups such as ICE are speculating the commodity markets and running up oil and gas. It isn't a matter of supply and demand.

    Jan............that is very interesting and makes a lot of sense. I wondered about the Iraq govt and their oil fields. And, why doesn't the USA govt nationalize their oil prospects? Why do we need the oil companies anyway? Let's drill our own oil and leave them out of it..............

    July 9, 2008 at 7:35 pm |
  17. JC- Los Angeles

    I just returned from Tobago where gas costs $0.50 a liter; here in Los Angeles, it costs roughly $5 gallon. Although we all can learn a lot from the wonderful people of Tobago, it seems a bit farfetched to think infrastructure would be at the top of the list. Closer to home, gas in Mexico is half the price of gas in Los Angeles. I find the supply and demand argument non-plausible. With Obama asking for $5 donations to attend his acceptance speech at a Denver football stadium and with say two gallons of gas required to drive to and from the stadium, my calculations suggest it will cost $15 to fawn over Obama. Our leaders have failed us in every conceivable way and fail to grasp the enormity of the problem. It seems a bit odd to have just celebrated Independence Day when in fact we live Dependence Day each and every day. The American people deserve an apology from our failed leaders, politicians and executives. I'm hopeful a leader with vision will emerge someday, get this country back on its feet and give us reason to truly celebrate an Independence Day.

    July 9, 2008 at 7:06 pm |
  18. jes from Canada

    Hi David, What do you think, is the USA being kicked out of Iraq just in time to attack Iran? Sadly the situation in Afghanistan is getting worse every day. This is one more war the USA has started that they can't finish. Please tell us if you think this mess can be cleaned up before more Canadian soldiers are killed.

    July 9, 2008 at 7:00 pm |
  19. MARTIN

    on a more serious note iran is already facing a strong military prsence not mention if you go through the white house documents slowly it says were already at war with iran and have been for almost 5months to 1year now

    July 9, 2008 at 6:59 pm |
  20. Pat

    Hi David:

    I believe it is because of the constant threats this Administration, I mean the President and Vice have put on Iran that has initiated such an untrusting, disrespectful relationship between the two.

    This Administration needs to stop using threats and ultimatiums against other Nations to achieve their desires. I believe an Administration truly interested in achieving peace would employ communication as a first negotiator not threats. Of course we all know this Administration is certainly not interested in Peace, Iraq bears the proof. George and Dick need to go now, not November. They are on the brink of starting something not even the Collective Nations of the World will put out!

    July 9, 2008 at 6:56 pm |
  21. CaseyJPS

    David, I know this is stepping outside the circle but we are talking about the middle east and the presidential campaign. Do you think Iraq's demand for us to set a departure timeline is an attempt by Iraq to influence our election? I believe our withdrawal would help boost Obama.

    July 9, 2008 at 6:49 pm |
  22. Larry

    So we think that Iran can be appeased do we?

    July 9, 2008 at 4:51 pm |
  23. Ruby Coria, LA. CA.

    Hi David, this one is for sure a stick one.. yet another religion story, Israel needs to relax..and we do need to do what we say Iran is doing "Nuclear".. what the heck we could all blow up together.. just don't drill here in California. oo & board security please. see you.

    July 9, 2008 at 4:26 pm |
  24. Kent Fitzsimmons,Kewanee, IL

    The US in conjunction with Israel will strike on Iran before the end of the year. If we don't, Israel will do it alone. Wouldn't you if you were Israel after these test runs of missiles by Iran? Of course you would. Iran forces are already fighting our soldiers in Iraq. What's the difference? Israel threatened Iran already. So............Iran is only replying to that threat. War is imminent......................

    July 9, 2008 at 4:11 pm |
  25. Lorie Ann, Buellton, California

    I think the time has come for a bipartisan solution. Explore each and every option and act. Stop talking and do the right thing for the country. Elections come and go and no President is going to solve the problem without the congress and people of America doing their part. There will be no heroes in this, only team work will solve a huge challenge. Just my two cents..Maybe that's three, there's inflation to consider..

    Lorie Ann, Buellton, Calif.

    July 9, 2008 at 4:01 pm |
  26. mark hoffman

    Well, at least we are sending weapons of mass destruction that can't be used against us over to Iran, if the latest reports about trade with Iran increasing under Dubya's reign are to be believed. So send as many ciggys over to Teheran as possible and maybe in a few years our "Iranian problem" will disappear in a cloud of emphysemic dust. Love ya A.C. Mark

    July 9, 2008 at 3:17 pm |
  27. Jan from Wood Dale IL

    Maybe it has something to do with the 4 original partners in the Iraq Petroleum Company (Exxon Mobil, Shell, Total and BP) along with Chevron being in final stages of negotiations with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest oil fields. These contracts would run one to two years and will return them to Iraq 36 years after losing their oil concessions to nationalization as Saddam Hussein rose to power.

    Either a U.S. or Israeli attack on Iran could jeopardize oil field production.

    July 9, 2008 at 3:16 pm |
  28. Mike in NYC

    Short-term political developments have short-term effects on prices.

    The upward trend in oil is being driven not only by "speculation," but also by institutional investors fleeing equities for more promising investments that offer hedges against inflation. Middlemen locking themselves into contracts in the expectation of increasing prices probably play a role as well.

    July 9, 2008 at 2:06 pm |
  29. olga in

    hi David,
    Iran is very dangerous and we all are afraid about them and we canno t doing anything about them and they know that !
    so wait and see what is the next move !!
    Olga from Montreal

    July 9, 2008 at 1:51 pm |
  30. Kristen- Philadelphia, PA

    David I don't remember that much about economics but isn't there a thing as too high. I mean there has to be a price that people are not willing to pay. What do experts say is the point when oil could top off?

    P.S. If Bush is seriously thinking about hitting Iran along with Israel before leaving office I say we start some kind of impeachment process to remove this man from office at once.

    July 9, 2008 at 1:22 pm |
  31. Michelle

    Well I guess Michael Ware is so right. Iran is now
    the major player in the Middle East. Please tonight
    when you cover this on 360 give us a panel with
    significant insight on this high stakes war game
    and not the hyperbole. This is way too important
    and the Iran situation needs to be put in proper
    perspective.

    July 9, 2008 at 1:11 pm |
  32. Larry

    I hope Iran isn't still offended by what Hillary said in the primary; if they are then we can say its all her fault.

    July 9, 2008 at 1:05 pm |
  33. Jamie from San Francisco

    I agree with Lester. We need to move quickly away from our Middle East dependence. We have technology available to convert existing gas cars to hybrids and install solar/wind/hydro solutions at the consumer level. The problem is just the cost. If the Federal Government is going to increase the deficit, put the funds in individual American's hands to implement these solutions and offset the costs. Every automaker should offer the conversion service and promote it. I would definitely go back to my auto brand to get a new car if they helped me with my existing one.

    July 9, 2008 at 1:03 pm |
  34. Lesley

    The fact that oil prices go up and down every few days cannot possibly be driven by supply and demand. Speculation is what is doing it. I remember long gas lines in the 70s and leaders saying that we had to find alternatives. Nothing has been done to solve the problem. Whatever we do now will take years, but let's get going on alternatives because the years pass quickly.

    July 9, 2008 at 12:57 pm |
  35. Mike, Syracuse, NY

    David, the only reason we stopped building nuclear plants was the paranoia over TMI. As a former nuclear submariner I know you can safely operate nuclear power plants. the Navy at one point had over 140 nuclear subs and never had a significant incident. France gets 80% of it's electricity from nuclear plants. There are no greenhouse gases, and the supply of uranium will last centuries with reprocessing. plant designs today are much safer as well. The only thing stopping us is lack of will to do it.

    July 9, 2008 at 12:56 pm |
  36. Lester from Huntsville,Alabama

    It really doesn't matter what goes on in the Middle East. Any and every thing that happens is used as an excuse to drive up prices on the American consumer. Sure, some may be legitimate but most is due to greed and a hatred for the American way of life in that part of the world. If we love this country...we'd consider this a national emergency and federally mandate that all vehicles sold in the U.S. by 2015 be flex fueled cars like in Brazil and start drastic investsment in wind, solar, coal and natural gas alternatives. I'm even for drilling if it can be done in an environmentally friendly way that's also mindful of states like California and Florida that depend heavily on tourism. The oil that we have to get should be shifted from hostile Arab nations to more American friendly nations and since sugar cane is used in Brazillian cars...maybe we should pursue long terms agreements with this friendly country to import this product. This would boost jobs south of the border and help curtail illegal immigration while at the same time assuring Americas energy independence. I'm not really a fan of Nuclear power plants being builted all over the place especially with looming threats and plots by terrorists that would love such targets. However, if all of the other changes are implemented in real tangible ways...nuclear plants would not be necessary. When will politicians stand up an put America first?

    July 9, 2008 at 12:33 pm |
  37. Lester from Huntsville,Alabama

    It really doesn't matter what goes on in the Middle East. Any and every thing that happens is used as an excuse to drive up prices on the American consumer. Sure, some may be legitimate but most is due to greed and a hatred for the American way of life in that part of the world. If we love this country...we'd consider this a national emergency and federally madate that all vehicles sold in the U.S. by 2015 be flex fueled cars like in Brazil and start drastic investsment in wind, solar, coal and natural gas alternatives. I'm even for drilling if it can be done in an environmentally friendly way that's also mindful of states like California and Florida that depend heavily on tourism. The oil that we have to get should be shifted from hostile Arab nations to more American friendly nations and since sugar cane is used in Brazillian cars...maybe we should pursue long terms agreements with this friendly country to import this product. This would boost jobs south of the border and help curtail illegal immigration while at the same time assuring Americas energy independence. When will politicians stand up an put America first?

    July 9, 2008 at 12:26 pm |
  38. Cindy

    How can Iran effect the price of gas? That is done by supply and demand. The only way they can do that is to stop the oil from being shipped out. And I don't see them being able to do that. Not only would we be on them but the whole world would because everyone would suffer not just the U.S.

    Iran is always going to be a force to reckon with no matter who wins the presidency. It is just a matter of how far you will let them go and how much you reel them back in. It'll be a fine line to walk for anyone who is the president.

    Cindy..Ga.

    July 9, 2008 at 12:11 pm |
  39. Annie Kate

    Six dollars a gallon – its hard to even grasp that and it will hurt when we have to. We may see a renaissance in walking and biking and staying at home a lot. If these prices are tied to Bush's warmongering ways we need to impeach him before he gets us in another war that he can walk away from in January and leave the mess for someone else to clean up.

    Annie Kate
    Birmingham AL

    July 9, 2008 at 12:11 pm |