Good news on Iran?

There is an editorial in IBD this morning which offers some interesting and positive perspective on the Iranian situation. First, Bush seems to be actually acting on his rhetoric. As has been reported, the Navy has moved a second battle-carrier group led by the USS Eisenhower into the region and Britain announced it has sent several mine sweepers into the Gulf region. Either something is up or it is something Iran must at least consider.

The most interesting development is on the oil front. The big question surrounding an antagonistic approach to Iran has always been what Ahmadinejad would do to oil availability and energy prices if provoked. The prospect of $100/barrel oil is thought to be something which would restrain Bush and limit his options. However, as the editorial points out, Iran gets 90% of its budget and 40% of its GDP from oil and their economy is already making the populace angry since there are increasing food shortages, a lack of housing and jobs and a growing repression by the government. For these reasons, Iran would have to think twice before withholding their 3 million barrels of oil from the market.

This brings us to the Saudiis who are long time foes of Iran and currently very dovish about the oil situation considering the price is now down about 20% to near $50/barrel. They have even made the point that they have 3 million barrels in reserve which they could release into the market if necessary.

So, Secretary Rice on Tuesday announced that America's six allies in the region plus Jordan and Egypt have approved Bush's new Iraq plan which includes getting serious about interference by Iran and Syria in Iraq. It would be encouraging to see Bush actually follow through on his threats for once. We'll soon see, I guess.