As militants spilling over from Syria advance toward Baghdad, oil traders are jittery and market observers are trying to evaluate the level of risk posed to Iraq’s main southern oil export facilities. Analyst Michael Lynch proposed potential oil price scenarios that range from relatively minor geopolitical risk premiums to more severe spikes that could see oil reach $150 per barrel if supplies are disrupted. “Sabotage: Iraq oil has a major bottleneck in the Basra Oil Terminal, which sends over 2 million barrels a day into the market. A speedboat loaded with explosives could put it out of commission for an extended period, sending prices over $125 and possibly to $150.” [Forbes]

President of National Grid US, Tom King, explains why last week’s EPA existing power plant rule announcement is an important tool that can help clean up the power generation system without causing extensive economic harm. “In its proposal, the EPA acknowledges that energy efficiency and demand reduction are important tools we should aggressively develop along with a relentless pursuit of low carbon-generation resources. In any assessment, there is no silver bullet.” [WSJ Market Watch]

Benchmark oil futures prices on both sides of the Atlantic have risen in response to events unfolding in Iraq, with Brent north of $110 per barrel and WTI above $105/bbl in early electronic trading this morning.