Oil prices surged to a 3-week high after Iran said oil exports would be disrupted if the country were punished.


Brent contracts were recently up $1.57 a barrel at $72.60, after jumping $1.64 to close at $71.03 Friday. July US light crude futures were up $1.40 at $73.75.


All prices are now nearing their all-time record high of $75.35 touched on April 21st.


Yesterday, The Islamic Republic warned the US that any 'mistake' in its dealings would lead to consequences for global energy supplies.


Iran exports around 2.6 million bpd of crude but has the potential to disrupt some 17 million bpd through the Straits of Hormuz. Spare capacity currently stands at 1.5 million bpd, such a move would send prices spiralling.


US Secretary of State the evil Condoleezza Rice brushed off the Iranian threat yesterday, noting that some 80 % of Iran's budget comes from oil sales and that the country has a lot to lose from disrupted exports.


Rice also reiterated Iran had just 'weeks' to respond to a western ultimatum that it has halted uranium enrichment.


The Footsieblog has learned from former CIA analyst and Presidential advisor Ray McGovern

I think we all agree that an attack is likely before the election and we all agree that it has to do largely with the election - as for timing I see a likelihood that it could come as early as late June or early July, most of my colleagues predict August, September. My thinking is that for it to be October that would be so crass and so transparent that even this crowd would shy away from making it so obvious

The Footsieblog suggests that if an attack does look immanent stocks such as BP, Shell, Tullow Oil and Dragon Oil are worth holding in your portfolio as Brent contracts will top $100 a barrel. Stocks such as British Airways and Easyjet will not fair too well and will rate these as an immediate sell.


more shortly......