effects of war economy
In the next few weeks, the struggling global economy may be put to the test if Washington chooses to invade Iraq. There are many risks involved in bombing Baghdad, the most important being a spike in oil prices.
With oil prices already over $30 a barrel, the increased pressure has been put on the global economy as more money is spent on importing oil. Should the United States attack Iraq, there is a real possibility that the Middle East oil shipments will be disrupted.
The US oil inventories are already running low due to the nearly two-month long strike in Venezuela. While it takes only one week for Venezuelan oil exports to reach the United States, it takes four to five weeks for them to arrive from the Middle East.
During an American attack on Iraq, an errant bomb could destroy or interfere with oil operations, halting Iraq's 1-2 million barrels per day (bpd) in exports. Compounding the American threat, Iraqi leader Saddam Hussein could opt to damage his own oilfields, by ordering troops to light them on fire, as was done to Kuwait in 1991.
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