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Suspected cyber-attack hits Iran’s oil sector

A virus has been discovered in computers running key parts of Iran's oil sector, forcing authorities to unplug its main oil export terminal from the Internet.

The country’s oil ministry, national oil company and a number of other companies affiliated with the ministry were hit by a cyber-attack on Sunday, according to Iranian news agency Mehr.

Iran’s deputy oil minister said the facilities were taken offline and a special cyber response team was set up.

Around 80 per cent of Iran's daily 2.2 million barrels of crude export goes through Kharg Island, located off Iran’s southern coast, which was one of the facilities attacked.

Iran has often claimed it is involved in a long-running technological war with the United States and Israel. The most recent similar attack happened in 2010, when the country’s nuclear program suffered a big blow from a worm called Stuxnet.

Stuxnet, many experts claimed, focused precisely on the computers running uranium enrichment centrifuges at Iran's nuclear facility in Natanz, destroying thousands of them and setting the atomic program back months.

Both Iranian officials and Western computer techs said that because of the complexity of the virus and the fact it had an “expiry date”, rendering it harmless after a while, it was most likely created by a government.

Fingers were pointed by Tehran at the United States, possibly with help from Israel.

The US and EU are trying to cut the country’s oil exports through a ban on the import of its crude, as well as with financial sanctions against Iran’s trade partners. Their stated goal is to force Tehran to freeze its controversial nuclear program.

Europe was among the largest buyers of Iranian crude, but is now trying to replace it with fuel from other sources. Japan and South Korea are also trying to reduce imports from Iran, although unlike the EU they haven’t set a deadline for stopping all oil imports from Iran. China, India and other refused to side with the US-sponsored effort, saying only a UN Security Council resolution would make them stop buying Iranian oil.

You know, I often wonder about this stuff. The likely culprits boil down to two, either Israel or the US. Maybe both working in tandom.

Be that as it may, there is something not jiving in the US oil supply. A gentleman working for Shell Oil company by the name of M. King Hubbert, coined a term called Peak Oil. Peak oil is when production no longer equals demand. From that point forward, some of the supply must be shipped in from outside sources. The US hit peak oil around 1970. There is also a world peak oil, where all the production of oil fails to meet the demands. That is estimated to be around the year 2020, give or take a bit. We know that the OPEC members are lying about their reserves because their production limits are based on them. Lying means they get to sell more.

The odd thing about peak oil is it can't be seen ahead of time. You know it's coming, just not when. It's the market that shows when it occurs. Looking back you see it, looking forward the clues are there but not the when.

Back in the 1960's the government estimates were that there were 200,000 billion barrels of oil in proven reserve. Now proven reserves means that it's known to be there. It's either in production already or an exploratory hole has been drilled allowing testing instruments into the reservoir. This does not count protected oil areas, such as the Alaskan reserves in environmentally sensitive areas.

Now the funny thing about what doesn't total up, is that we've pumped something like 175,000 billion barrels of oil already. Yet by the most conservative government estimates, we have 200,000 billion barrels or reserves remaining. There are many government branches estimating the size and they disagree big time, the 200,000 billion is the lowest estimate.

In unproven reserves (which is estimated) there is something like 4 trillion barrels in this country. Know what that means? It means the US has more oil in the ground that Saudi Arabia, if these figures hold true.

So why is gas up around $5 a gallon? Or even $3 a gallon? I'll tell you what I think is the reason.

I think it is a combo between the government trying to push prices high enough that other forms of energy become cost effective to develop. I think that the oil companies have a lot to do with it, in co-operation with the government. Before you get all up in arms about me being some sort of conspiracy theory guy, hear me out.

Obama's energy adviser and Obama himself at different times have put out in talks they would not be disappointed in $7 a gallon gas prices. That's the break even point where it's economical to look for other means for energy.

The US in the last few years, has had it's gas consumption dropping fast. People aren't driving as much and they are buying more fuel efficient cars. The US refinery capacity has been dropping a bit too, due to pressures from the EPA and environmental concerns but no new capacity has been added. It's not needed. At present, the US refineries are making more gas than is being consumed in the US. The solution to prevent stock piling in storage has been to ship it to other parts of the world with no refinery capacity, no oil, and higher prices. The US has again become a major exporter, only this time, refined gasoline is what's being shipped.

This means no storage, building up a supply to drive prices down. We are now in world competition for the same product with other parts of the world willing to pay higher prices. That in turn means fuel prices are not going to go back down...ever.