Friday, July 11, 2008

Iran's Easy Money

OK, let's say you have four missiles sitting around. I don't know what they cost, but let's say it costs less than $3.9 million to fire them and replace them. Does that sound reasonable? Because if it does, then Iran made money off their missile test on Wednesday.

Here's how I figure it. According to BP's Statistical Review of World Energy, last year, Iran produced 4.4 million barrels of oil a day. It consumed 1.6 million barrels, so we can conclude that it exported 5.6 million barrels a day. Let's also assume that Iran has continued to export about that much oil this year as well.

Now after they "tested" their missiles yesterday, the price of oil went up day-on-day about $5.60 per barrel. So on Thursday, all things being equal, Iran made $15.6 million more than it did on Wednesday. So as long as their missile test cost less than that amount, Iran made a decent little one day profit off it. Nice work if you can get it!

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