The Iranian Sailor Incident

Iran recently captured and eventually released 15 British sailors. The sailors were routinely inspecting a vessel when the Iranian navy surrounded them, and took them prisoner. It later became clear that this incident had happened very close to the border between Iraqi and Iranian waters. If the British crew were in the Iraqi waters then they would be doing their job, but if not, then the Iranian navy would have theoretically been "correct".

Why on earth would a country do something like this? What would motivate a country to an "act of aggression" over a dispute between a few miles? They certainly may be feeling encroached upon with the whole Iraq war taking place next to their homeland. It still doesn't seem to make sense though, that Iran would cause such an international incident over such a measly dispute. That is until you look at the repercussions that the entire incident had on price of oil.

As Iran captured the sailors, the entire world shared fears that military action might result, and if military action were to result then the oil supply would be drastically interrupted. Futures traders, being the enlightened creatures they are, quickly realized this and within minutes the price of oil rose. Why would this be important to Iran? Well, that is quite an obvious question to answer; if the price of oil rises then an oil producing country would surely stand to gain by selling their oil at higher prices; especially if they knew exactly when the prices would rise.

Further supporting the notion that Iran captured the sailors due to economic reasons is the fact that the Iranian economy could use a little boost. The Iranian economy is steadily rising, but due to a relatively small manufacturing base the Iranians are suffering from high unemployment levels. An increase in oil prices would therefore inject more money into the Iranian economy. With the money the Iranian's would be able to pursue whatever they wanted, be it their fledgling nuclear program or a widened manufacturing base.