(Bernd Debusmann is a Reuters columnist. The opinions expressed are his own)

WASHINGTON, June 25 (Reuters) - When an Israeli cabinet minister said he thought an attack on Iran’s nuclear sites was unavoidable, the price of a barrel of oil rose 9 percent to a new record in June. Nice, fat bonus for oil-producing countries, including Iran.

If rhetoric has that effect, imagine the consequences of an actual strike. The numbers have not been crunched, at least not in public, but a four-month computer simulation and gaming exercise carried out last year by the Heritage Foundation, a conservative Washington think tank, gives an idea.

It was based on an Iranian closure of the Strait of Hormuz, the passageway for 90 percent of oil exported from Gulf producers, in response to a U.S. attack on nuclear sites, air fields and air defense targets. The simulation showed the price of oil more than doubling, U.S. gross domestic product depressed for 2-1/2 years, private non-farm employment declining by more than one million jobs, and disposable personal income dropping by more than $260 billion.

In terms of oil and gasoline prices, last year were the good old days. At the time of the exercise, a barrel of oil traded at $65 and a gallon of gasoline in the U.S. averaged $2.80. It’s now around $136 and $4.08 respectively and could well reach twice that after an attack. Tighten your belts!

The exercise did not measure the impact of the closure on Japan, more than 75 percent of whose crude goes through the Straits, South Korea (70 pct), India (65pct), or China (34pct). The assumption was that Iran would only succeed in closing the Strait for one full week, after which shipping would slowly resume.

Reaction to an attack on Iran would go beyond severe economic pain to the U.S. and other oil importers. One of the unintended consequences of the U.S. invasion of Iraq has been to greatly strengthen Iran which has the ability to wage guerrilla war by proxy on Israel (through Hezbollah in Lebanon and Hamas in Gaza) and has shown it can dial up (or down) Shi’ite violence in Iraq.

The military consequences of an American or Israeli attack on Iran are incalculable.

Mohammed El Baradei, the head of the world’s nuclear watchdog, the International Atomic Energy Agency, has described military action to stop Iran’s nuclear programme as a “ludicrous idea” which would unite Iranians against their attackers and “turn the region into a fireball.” A crash program for building the bomb could begin as soon as the smoke clears.

ISRAELI HAWKS AND U.S. NEOCONS

The man who made the oil price jump on June 6 with his “unavoidable” comment was Israeli deputy prime minister Shaul Mofaz, a hawk born in Iran, whose views are close to U.S. neoconservatives who also feel that the only way to stop Iran’s nuclear programme is to bomb it. Their’s appears to be a minority position in the lame-duck Bush administration which is already bequeathing two wars and a battered economy to the next president.

But the U.S. could be drawn into an assault if Israel, impatient with the present diplomatic stalemate and the limited success of sanctions on oil-rich Iran, decided to strike, found itself unable to finish the job and requested U.S. assistance. In other words, the U.S. would have to finish what Israel started.

This week John Bolton, a former U.S. ambassador to the United Nations predicted in an interview with the Daily Telegraph of London that Israel would attack between the U.S. elections on November 4 and the swearing-in of the next president on January 20. This was probably more a public expression of wishful thinking by a superhawk than deep insight into Israeli planning.

What has complicated the seemingly endless debate over the nuclear program Iran says is entirely for peaceful purposes is the assumption by many policymakers in the U.S. and Israel that the Iranian establishment is irrational. “The problem is that we are putting Iran in a category of one, different from anyone else,” said Gary Sick, an Iran scholar at Columbia University. “There is a strain of commentary that Iranians are so suicidal and martyrdom-inclined they cannot be trusted.”

In Israel, that school of thought was enshrined in a 2004 national security report for former Prime Minister Ariel Sharon. It argued that Israel has an inherent right to pre-emptive attacks because the Iranian leaders are irrational and do not value self-preservation, according to Trita Parsi, author of Treacherous Alliance, a study of the complex, shifting relations between Iran, Israel and the U.S.

Despite Iranian President Mahmoud Ahmedinejad’s alarming rants about the imminent demise of Israel, there is no evidence that Iran’s opaque and many-layered leadership is plotting to commit collective suicide by building a nuclear bomb, promptly launching it at Tel Aviv and dying a fiery death in a retaliatory nuclear strike from Israel.

Israel’s nuclear arsenal, a key element of the Middle East power equation, has been an open secret for years. It is still treated with studied silence both by official Washington and Israel, which has neither confirmed nor denied that it has nuclear weapons. Independent experts put their number at between 80+ and 300. Three nuclear submarines provide a second strike capability of which Iran is keenly aware.

Many strategic thinkers both in the U.S. and Israel dismiss the notion of Iranian irrationality and exceptionalism. “Iran’s leaders are more concerned about staying in power than anything else,” said Mehrzad Boroujerdi, an Iran scholar at Syracuse University.

Just like power elites anywhere else. (You can contact the author at Debusmann@Reuters.com) (Editing by Sean Maguire)