Is Iraq war fuelling GCC’s economic boom?

Since the US-led invasion and occupation of Iraq, the price of oil has steadily climbed upwards. A barrel of oil today costs twice as much as it did on the eve of combat, back in March 2003.

At the same time all six Gulf Cooperation Council (GCC) states – Bahrain, Kuwait, Oman, Qatar, the United Arab Emirates, and Saudi Arabia – have experienced levels of economic growth not witnessed since the 1970’s.

There is little doubt that the continued occupation of Iraq contributes to the upward trajectory of oil prices, which in turn has helped fuel the GCC’s economic boom. Paul Horsnell, a senior energy analyst at Barclays in London, said, “If there had been no invasion, then the current oil price would be lower.”

The question is to what extent. The “Iraqi factor” is only one part of the story. The contention that we have reached, or are approaching “peak oil” – the top of a bell-shaped world oil production curve – combined with unprecedented global demand and lack of spare capacity are probably all more significant factors.

Al Jazeera