Oil price manipulation, an unrecognized stratagem and an unhinged plan

Governments around the world are desperate to bring down oil prices in the wake of a cutoff of about one-fifth of the world's supply due to the Iran war. Here are some of the moves we've seen so far:

1. The International Energy Agency, a consortium of 32 countries which coordinate energy policy and emergency readiness, called an emergency meeting to discuss release of strategic petroleum reserves to ease prices. The countries agreed to a release of 400 million barrels from reserves held in underground caverns and above ground in storage tanks, the largest release ever of such reserves.
   
   With about 20 million barrels per day no longer available from Persian Gulf exports because of the Iranian closure of the Strait of Hormuz, the narrow passage from the gulf to the open sea, this release represent just 20 days of oil deliveries. But it is unlikely that the daily release of oil will be more than a fraction of the lost barrels given constraints on how fast the reserve can be accessed. So it's not surprising that oil prices actually went up after the announcement.


2. Of course, I would be remiss in not pointing out that Iran's closure of the Strait of Hormuz was the initial manipulation of the world oil price as it vowed to push oil prices to $200 per barrel.

Iran war: What we're in for and why logic is your friend

Two weeks ago I suggested that the complacency regarding war with Iran was misplaced and that that complacency was likely soon to be replaced by panic in the world's capitals and financial markets. The general belief was that President Donald Trump would relent, make a deal with Iran, and declare victory. Even if he didn't, the Iranian regime would be quickly overwhelmed by a combined American and Israeli attack and possibly be overthrown in a popular revolt or in the alternative, sue for peace within days.

Of course, neither of those things turned out to be the case. The complacency has now vanished. Leaders in at least some capitals are panicking though the financial markets continue to respond in a surprisingly muted way to the risks this war poses for the world economy.

Here is the most important thing readers should understand about this war: Iran defines winning the war very narrowly. Victory for the Iranian regime is that the regime survives. Israel and the United States define winning as the fall of the current regime leading either to a new friendly regime or a break-up of the country into various parts. And just last Friday President Trump added that the "unconditional surrender" surrender of Iran is the only acceptable outcome. Now consider the remarks of the Iranian foreign minister to NBC: "We are not asking for a cease-fire and we don't see any reason why we should negotiate with the U.S." He pointed out that the United States has used two previous negotiations as a deceptive cover for attacks. So, it looks like this conflict will be a fight to the finish.

Could AI lead to the destruction of civilization?

When it comes to the dangers of artificial intelligence (AI) and now artificial superintelligence (ASI) (sometimes called artificial general intelligence), I feel as if we've been transported onto the set of the 1983 film "WarGames."

In the film teenage hacker David Lightman stumbles onto the military's most sensitive war scenario planning computer while believing he has simply found a soon-to-be-released game called "Global Thermonuclear War" on the server of a computer game company.  Lightman activates the game which ultimately makes personnel at the North American Air Defense Command (NORAD) mistakenly believe that the Soviet Union is preparing for an attack. On big screens throughout the war room, Soviet movements and preparations become ever more threatening by the hour. As we are told later, the object of the game is to win and so the computer sets out to win a thermonuclear war.

When Lightman realizes what he's done, he seeks out the one person he believes can stop the madness. (I'm skipping a lot of steps here.) He catches up with the architect of that war planning computer system, Stephen Falken. Falken is living a solitary, anonymous existence (under a different name) in a home that Falken says is near a primary nuclear target. He explains to the young hacker: "A millisecond of brilliant light and we're vaporized. Much more fortunate than the millions who'll wander sightless through the smouldering aftermath. We'll be spared the horror of survival."