Peak Oil is You
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Page added on April 6, 2006
”The War Is Bad for the Economy”
Nobel Prize winning economist Joseph Stiglitz, 63, discusses the true $1 trillion cost of the Iraq conflict, its impact on the oil market and the questions of whether the West can afford to impose sanctions on Iran.
SPIEGEL: Professor Stiglitz, at the beginning of the Iraq war, the United States administration was hoping to almost break even in terms of the costs …
Stiglitz: … they truly believed the Iraqi people could use their oil revenues to pay for reconstruction.
SPIEGEL: And now you are estimating the cost of war at levels between $1 trillion and $2 trillion. How do you explain this difference?
..Stiglitz: The Middle East is the lowest cost producer in the world. They can produce oil for $10, $15 or $20 a barrel. Now we have the technology to produce oil elsewhere for $35 to $45. But who wants to develop fields or invest in new technologies elsewhere if they know that in five years’ time, the Middle East may be supplying oil at previous prices?SPIEGEL: In other words, were peace and stability re-established in the Middle East, the oil price would be back to maybe $25, despite the huge global hunger for energy?
Stiglitz: Yes. By the way that’s the price level oil traders were speculating on in futures trading before the outbreak of war.
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