How much impact does the war in Iraq have on present oil prices?

[kentuck]

And the price of gasoline? It takes a lot of gasoline to run a war. And the law of supply and demand must surely apply? How much oil and gas is the war subtracting from the normal market demands? Anyone seen any information on this?

[justinsb]

1. Not alot

Rising demand in places like China, India and Brazil is the real culprit and that's not going down anytime soon.

[indepat]

2. A few months back, one article opined oil would be in $29- to $30-range

without the Iraqi war. That might have been wistful thinking, but an additional $10 to $20 or more a barrel seems likely. That those in the oil patches have made out like bandits would seem irrefutable. Sorry, but don't have that link.

[justinsb]

3. oil prices will stay high

Gulf officials: China, India boom means oil prices will stay high

ABU DHABI — Kuwait, bolstered by high oil prices, plans to post a record budget surplus.

The Kuwaiti Finance Ministry said total revenues in the first 11 months of the Kuwaiti year reached $27.1 billion. Kuwait had planned for an $11.25 billion for the entire year, Middle East Newsline reported. The Kuwaiti year runs from April 1 to March 31.

Meanwhile, Gulf officials said the demand for oil would continue over the next few years amid accelerated development by China and India. They said the price of oil would probably hover around the $50 market for most of 2005

"Prices will never go under the $40 per barrel mark," Kuwait Petroleum Corp chief executive officer Hani Hussain told the Abu Dhabi-based Gulf News said. "We know there is huge demand for crude oil. This has pushed prices higher than most of us anticipated."

more: http://216.26.163.62/2005/me_oil_03_25.html

[McCamy Taylor]

4. A lot! Big supplier out of the picture. Mideast instability.

[Not Me]

5. Further, the debt that we are encumbering ourselves with

is behind the decline in the US dollar against stable currencies.

on edit: typo

[madrchsod]

6. our good friends in Venezuela

are putting up their oil fields for bids....they have about as much recoverable oil and oil tar as the saudi`s. the big boys are not happy with the increase taxes but they are willing to pay because it`s the next big field in the world. oil fields off of brazil and africa are just starting to be explored with some sites going on line next year..

[BillZBubb]

7. It has a significant impact.

Not from the added usage by the US military. But, Iraq is potentially a huge supply source and it is now essentially off line. At the margins that can have a big impact on prices.

The increased demand from China and India is way overplayed. It's the right wing excuse for another Bush policy failure. A big contributing factor is the BushCo trashing of the dollar. The dollar has fallen about 30% versus the Euro. So, in a global market for a somewhat tight supply of oil, the Europeans and others not tied to the dollar, can boost their dollar valued oil bids by nearly 30% and still have essentially the same price as before. Those of us whose economies rely on the dollar can only pay more to meet their bids. So, we pay a lot more for oil. You won't see this discussed in the MSM.

Bush and his criminal gang tanked the dollar to boost his election chances. It made it seem like American exports were on the rise. And short term they will be. At the same key imports (like oil) go way up in price. But big devaluations almost never end happily.

[dogday]

8. With Chalabi being the Minister of Oil

I am sure he has all the correct facts and figures NOT!

[tubbacheez]

9. Probably not so much directly, but indirect costs are huge.

Military vehicles will of course use more fuel when military activity steps up. But far greater are costs related to the weapons and deliberate damages done in military conflict.

On the U.S. end, all those pricey smart bombs and expensive high-tech munitions are now fragments and toxic dust. To maintain our current armament levels, we'll have to spend to replace them. Destroyed, damaged, or simply worn out equipment also sucks up money.

On the Iraqi end, destroyed factories, power plants, water treatment facilities, and on all the way down to office buildings and residential homes will result in monetary damages much larger than total fuel costs.

Every single unnecessary death of person (of any nationality) also results in a loss of human capital (potential for future work or innovation) and human investment (education, food, relationships poured into him/her).

And for every day that war causes a soldier to not work his preferred civilian job, and for every day that war causes a civilian to not work the job he or she is best suited for, our world has missed out on a potential gain Gross Global Product.


The real result is that we are always poorer because of war. Never richer.

The conservative economic theory that war stimulates the economy is a total myth. {It happened once (right after WWII), only because of a rare conjunction of several factors. America entered the war late and with spare industrial capacity (lingering from the Depression). All other major powers were already at maximum capacity and ravaged by war.}

The real price of war is nothing plainer than a drastic shortfall from what we could have accomplished without war.

Anyone who doubts this can try a simple experiment. Spend one day working cooperatively with your neighbor on household chores. Measure your output and subtract your consumption. Spend another day boxing with him. Measure your output and subtract your consumption.

Even when limiting the experiment to the sport of boxing(as opposed to something harsher), anyone can see how directing your energies against someone can cost you significantly.