Sunday, February 09, 2003

See, I didn't turn over a new leaf...

"A decision to quit OPEC would have major political and economic ramifications. The economic beneficiaries would be the oil-importing countries, primarily the United States, which could enjoy economic growth with low oil prices for many years to come. If the decision to quit were dictated from Washington, it would be the economic equivalent of the recent national security doctrine that trumpets the United States' hegemony over the world. [51] But the political implications are also far-reaching. Forcing Iraq out of OPEC, and encouraging a major production increase by Iraq, would be an economic declaration of war on OPEC. It would lower incomes in all the major Middle East countries, deal a blow to the Russian economy, and could destabilize the region from Algiers to Novosibirsk. From the US point of view, it would be a myopic policy leading to even greater dependency upon Persian Gulf oil supplies and inviting decades more of political, economic, and military struggles in that region. The conjunction of circumstances that would lead to a free fall in oil prices in a world without OPEC constraints might qualify as a "best economic case" but it is sufficiently remote that I have not included it in the "happy" outcome for oil markets."

Read the article--Some kinds of post-war 'peace' may be very expensive.

I'm always impressed by graphs and tables (Not really, in fact. But I do send them around to impress my friends.)


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