Price of Gasoline if U.S. Withdraws From Iraq Immediately?

[adios]

Up, down or it doesn't effect the price of a gallon of gasoline very much? Also Bin Laden's gripe with the U.S. was about U.S. influence in Saudi Arabia more or less. Probably support for Israel too. What would happen to the price of gasoline if the U.S. withdrew it's troops from the Middle East and renounced it's support for Israel? Up, down, or it doesn't effect the price of a gallon of gasoline very much?

[Wes ManTooth]

Overall ... doesn't effect the price that much.

[adios]

.....

[FishHooks]

I wound say it would go up (but not by much), with the higher amount of chaos in Iraq if we were to leave.

[Arnfinn Madsen]

According to a oil trader:
If US would stop its support for Israel, the price would fall substantially (risk premium would be reduced). If US would stop backing the Saudi Kingdom the price would rise substantially.

[adios]

[ QUOTE ]
If US would stop its support for Israel, the price would fall substantially (risk premium would be reduced).

[/ QUOTE ]

Ask your trader friend what is the risk premium due to this support? Curious to know and thanks for weighing in and to all that do and have.

[Wes ManTooth]

[ QUOTE ]
I wound say it would go up (but not by much), with the higher amount of chaos in Iraq if we were to leave.

[/ QUOTE ]

Iraq's oil supply currently does not affect the overall price that much. Granted they do have a large supply of oil but currently not being exported at a significant rate.

[FishHooks]

that's why I said "not by much"

[Arnfinn Madsen]

He is not my friend, just heard him explain these two issues on the television. His explanation was something along this:
There is no current substantial spare capacity outside the Middle East. The main part of spare capacity available in the Middle East is in Saudi Arabia. Any substantial disruption in production in Saudi Arabia or Iran (which the nervous oil traders start to worry about) would lead to a sharply rise from current prices (a sharp increase is needed to make equilibrum since short term demand for oil is relatively insensitive to price changes). The US support for Israel aggravates the conflict with Iran and large parts of the Saudi population, thus contributing to the risk of a disruption.

He also explained how a strong current demand creates a relatively high floor upon the risk premium is added.

[Wes ManTooth]

[ QUOTE ]
that's why I said "not by much"

[/ QUOTE ]

Ok, but the "higher amount of chaos" would not be a factor (contrary to would the media would want one to think), very minimum factor at most.