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  1. Iraqi oil production now is slightly above pre-war levels (stable since December). Under the status quo, then, supply would not have increased much due to continued sanctions against the regime.

  2. As possible counterpoints: With no war in Iraq, the US would have far greater capacity to mount a war against Iran. The American public would also have learned fewer lessons about the limits of US military power.

I think the major factor you'd have while holding as many conditions constant as possible would be the risk premium in the market related to Iraqi production, and the decline of the dollar. The Iraq war has cost around 540 billion US dollars, to date (ticker 1, ticker 2). The foregone revenue of Bush' tax cuts, by comparison, would be around 1.6 trillion US dollars (cbpp, rough projection on my part).

So, the war has clearly been significant in terms of its requirements for the money press.

by nanne (zwaerdenmaecker@gmail.com) on Sat Jul 12th, 2008 at 08:03:19 PM EST
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I was assuming free flow without sanctions. A cynic might wonder if the point of limiting Iraqi access to the oil market through sanctions was as much about keeping prices high as punishing Saddam. The Saudis and the Bush family used to have close links, and probably still do, although I suspect the Bin Ladens and other Saudis have always been smart enough to see Clan Bush as useful idiots.

Either way, I doubt the Saudis are desperately unhappy about current price levels. But they were clearly unhappy about sharing power with an independent like Saddam.

I think an all-out invasion of Iran was always going to be less likely than an attack on Iraq, so I'm not convinced that Iran was ever a realistic alternative.

But I think it's worrying that people are arguing as if these wars were inevitable. Perhaps they were eventually, and acceptance of a Gore win in 2000 would only have postponed them. But the alternative was - and is - a crash Green development program, which wouldn't just lower gas prices but make them much less relevant to everyone. Gore might or might not have achieved that in a term. But we'd certainly be much closer to it than we are now.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Jul 12th, 2008 at 08:21:58 PM EST
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