How to get $500 bbl oil in 3 months

[Note: I wrote this last October, 2005, before the media noise about the US or Israel bombing Iran. It was never a prediction, only an artificial scenario illustrating how close a massive increase in oil prices might be if events conspired. It was unlikely when I wrote it, it is less likely now that Ariel Sharon is incapacitated, but best hope that Netinyahu isn't the next prime minister of Israel ;) However, I do feel that late March / early April 2006 is going to be a very dangerous time.]

I'm amused by the shock some folks express when a price of oil of $100 or $200 is predicted in the next few years, and by diehards who say it will drop back to $30 (not before US unemployment nears 20% I'd guess), so here's a scenario that could easily result in $500 bbl oil in 3 months...

March 2006
Israel bombs Iran nuclear facilities ; oil $130 from $70 (note: overflies Iraq, avoiding Saudi airspace, USA complicit)
China begins noticeable selling of US securities, $ drops 10% in a month

April 2006
Widespread uprisings assisted by Iran in central & southern Iraq ; oil $160
US casualties in Iraq over 1000 in one month

May 2006
US Invades Iran "to secure Iraq border" ; oil $240
Revolution in Saudi ; oil $360
US too stretched to intervene in Saudi until too late
US$ plunge continues China revalues Yuan to 5 per US$ ; oil $400

Note that approx 20% of global oil production comes from Saudi, Iran, Iraq, Kuwait; a fair bit of that will be off the table for some time, at least. I guessimate that there would be an approximate 50% increase in the oil price for every 2% of global supply reduction due to short term disruption, on that basis a reduction of 10% of global supply (that is 5 multiplicative 50% price increases) would result in a jump from $70 to over $500.

June 2006
Impeachment of Bush and Cheney begins (ostensibly for illegal war but really because of oil shortage and price)
New Saudi regime ceases all trade with USA, signs agreements with China
China annexes Taiwan peaceably (almost totally)
OPEC bans all oil exports to USA
US$ 50% of Dec 2005 value ; oil $500 ; gold $2000 per oz

July 2006
Bush and Cheney resign, put under arrest
Senate and Congress unanimously request ex-president Jimmy Carter to serve till 2009 with John McCain as VP
US pulls out of Iran, begins negotiations for pull out from Iraq at UN
Oil $450, US gasoline $20 / gallon
Goldbugs who took profits at $1000 per oz back in early May are unhappy

Subsequently...
OPEC oil is no longer sold for US$
World Court requests extradition of Bush, Cheney and others on war crimes charges
Saudi requests extradition of Saud families and their money from USA (to where they mostly escaped) as a precondition for them and OPEC resuming oil exports to USA
USA endorses World Court, extradites Bush, Cheney, Sauds - neatly avoiding divisive US trials
US economy shrinks by 25% over 2 years
Oil price drops to $300 by end of 2006 but mid east output still 25% below 2005 levels
2004 becomes recognised as the probable year of peak (conventional) oil [actually we know this is true already!]

I know some of this is a bit fanciful, particularly the JC for president bit, but it would be deliciously ironic if he could at last implement his energy plan of 25 years ago. I think most of these events are plausible and many less predictable things have happened. Note that no terrorist acts against the USA, no newks, no plagues, no major wars, no mining of Saudi oilfields, were needed to conjure $500 oil, so there is plenty of scope for $1000 oil!