Since the start of the Iraq was in March 2003 the price of a barrel of oil has doubled. That’s not good news to me - but, then, I’m not in the GCC:

…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.

According to a recent Institute of International Finance report, the GCC’s aggregate nominal GDP grew by 17% in 2004 and is likely to grow as impressively this year.

It’s being suggested, on the one hand, that if it weren’t for the war oil would be cheaper.

Some in Washington had hoped that by now Iraqi oil would be flooding the market, rendering OPEC obsolete and acting as a counterbalance to Saudi Arabian influence.

This has not happened, partly because Iraq’s pipeline infrastructure has been sabotaged no less than 257 times since 2003 but also because its oil infrastructure is in a dilapidated state.

In the final months of the UN Oil for Food programme, Iraqi oil exports averaged at 2.5 million bpd. At peak levels, prior to sanctions, Iraq produced 3.5 million bpd. Last month Iraq managed to export only 1.6 million barrels daily.

However, the production of the black gold may have peaked while demand - especially from rapidly developing economies plus the US - are placing upward pressure on the price.

China, which is now the world’s second-largest consumer of oil, has over the past few years accounted for approximately 40% of the growth in global demand. The EIA forecasts that Chinese demand will double by 2025.

India, another rapidly industrialising Asian state, is importing more oil than ever. Demand is still growing in developed economies, especially the US, where gasoline for motor vehicles accounts for most of its demand.

It is interesting to note that Ford’s current range of cars achieves, on average, fewer miles per gallon than its Model-T did 80 years ago.

See? However complicated the world becomes the unseen hand of supply and demand wins out in the end…