Prediction markets are worth a look from time to time even for people who aren't particularly interested in futures trading. There's been a great deal of press attention on the notion that Iran will be attacked by Israel before President Bush leaves office. Well, it so happens that there are prediction markets for this very event. At Intrade the proposition, "USA and/or Israel to execute an overt Air Strike against Iran by_______" is currently being traded with end dates for this quarter and the next two quarters.
So, how does it look for this event? The trade is currently 17.0 by September 30th, 30.0 by December 31st, and a pretty large 49.9 by March 31st. Given that Intrade shows the election of Obama as President to be increasingly likely (Obama futures up to 65.0 now versus 30.0 for McCain) it's pretty interesting that the idea that Israel will take action after Obama is elected and before he is inaugurated is taking hold. Pretty much what John Bolton opined the other day as I recall.
Perspective time-- The US Congress lifting the ban on offshore drilling before the end of 2008 is trading at 20.0 while lifting the ban on drilling in ANWR is trading at a lowly 10.0. Yes, that means an airstrike on Iran is far more likely than the Democrats in Congress allowing the US to exploit her own oil reserves. Related? Beats me.
The government of Iran seems to want to promote the idea that they would close the Straits of Hormuz if they are attacked. They might very well try that. But the Straits wouldn't be closed for long.
In the picture from the space shuttle above, Iran is at the top, Oman is the point into the straits and the UAE is the land by the wing. This view gives one the sense of what a chokepoint it is.