That’s why Iran is a risk: a disruption would make oil markets even tighter, and drive gasoline prices up further. Even before the February spike, gasoline prices relative to earnings and income were starting to bite (2"' chart). The private sector can handle some gasoline price increases, but probably not much more than what we’ve seen already. The spread between retail and wholesale gasoline prices is low ($0.35, compared to a $0.35-$1.00 range), suggesting further retail increases may be in store. People like me now spend a lot of time on conference calls with geopolitical experts of different stripes. On one call, speakers raised the probability of military action from 30% to 50%. On another call, speakers mentioned that the US has “run out of senior military advisors to send to Israel, all requesting that Israel not attack unilaterally”, and believe Israel won’t. A paper by Matt Kroenig in Foreign Affairs magazine entitled “Time to Attack Iran; Why a Strike is the Least Bad Option” resulted in a firestorm of criticism from multiple sides. With sanctions appearing to work (Iran’s inflation, currency collapse, fewer buyers of its oil and a potential ban on Iranian banks from the global SWIFT payments network), won’t the US want to wait and see? Most of the US military establishment seems to take this view. The conjecture is endless. Here are a few points I found to be of greatest relevance as we sift through this: ** The US and Europe appear to take the Israeli attack threat seriously. Economic recoveries are just beginning to form in both regions, and there are elections coming up, so for politicians to ratchet up sanctions and drive up oil and gasoline prices, they must be very concerned that without tougher sanctions, the Israelis might act. ** Tran’s Fordow facility is key to understanding the debate about the effectiveness of military action, and why some are nervous that the “window for action is closing”. Fordow is estimated to be 80-90 meters below grade,