Report: Oil terrorism 'serious threat' to world economy

Thursday, June 3, 2004

A new report says Al Qaida's insurgency campaign against Saudi Arabia has increased the price of crude oil by up to $10 a barrel and poses a continuing threat to the Western economy.

The report by the Jaffee Center for Strategic Studies said the insurgency attacks in the Middle East have pointed to regional oil suppliers as political risks amid the increase of oil beyond the $40 a barrel mark.

The report, authored by researcher Paul Rivlin, said Middle East members of OPEC are greater risks than their non-regional counterparts, which produce more oil.

"What lessons should be drawn from recent events?" the report asked.

"The first is that terrorism in the Middle East has increased prices on international markets, by $5-10/barrel. This is a serious threat to the world economy, especially to poorer countries that cannot afford higher oil prices."

The report urged Western consumers, particularly the United States, to reduce oil demand. Rivlin said no oil source can replace Middle East members of OPEC.

Copyright 2004 East West Services, Inc.

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