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Contrary To Administration Predictions, Iraq War Contributing To High Oil Prices

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"Contrary To Administration Predictions, Iraq War Contributing To High Oil Prices"

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In September 2002, when the price of gas was $1.40 per gallon, White House senior economic adviser Laurence Lindsey predicted regime change in Iraq would lower oil prices:

As for the impact of a war with Iraq, “It depends how the war goes.” But [Bush senior economic adviser Laurence Lindsey] quickly adds that that “Under every plausible scenario, the negative effect will be quite small relative to the economic benefits that would come from a successful prosecution of the war.”

“The key issue is oil, and a regime change in Iraq would facilitate an increase in world oil,” which would drive down oil prices, giving the U.S. economy an added boost.

Today, with the price of gas now around $2.91 per gallon, the Associated Press reports that the Iraq war has contributed to high oil prices:

With oil prices above $70 a barrel fouling the world economy, dismay is focusing on Iraq, whose exports have slipped to their lowest levels since the 2003 invasion.

”Iraq could be making a tremendous difference,” said Dalton Garis, an economist at the Petroleum Institute in Abu Dhabi. Instead, its shortfall is ”a significant contributing factor to the high price of oil,” he said.

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