Self-funding terrorism

Steve Sailer points out that support for terrorism is self-funding for oil exporting nations.

If Iran exports 2.6 million bbl/day of oil, and the war between Israel and Hezbollah creates a $3/bbl risk premium for oil which lasts 30 days, then Iran makes an extra $234 million of profits (assuming all of its export oil is sold at the spot price), which maybe pays for two years of Hezbollah's funding. Or maybe a lot less than two years, know one really knows how much money Iran is spending on Hezbollah.

But the real winner is Sunni Saudi Arabia which exports more than three times as much oil as Iran.

Comments

[bbartlog]

On the face of it it makes sense. Still, I am curious about the risk premium and how it comes about. Specifically, I would assume that the price of oil does not magically increase when there are disturbances; rather, some people buy additional oil to safeguard against future supply disruptions, thus raising the current price. The question then is whether there is a concomitant depression in the price of oil when conditions are calmer and these reserves are released. If so, the benefit to the producers would obviously be less (though still positive).
But I may have too shallow an understanding of the oil markets; in particular I don't know what the role of the oil futures market is in setting current prices.

[Douglas Knight]

Recall that 9/11 dramatically reduced oil prices.
Decreased demand for flights was more important than vague fear of instability.