The risks of a potential backlash against a U.S. attack on Iraq are many, but increased worries about oil supply are one of the most critical for both policymakers and consumers alike.
Certainly, energy supply outlook in the longer-term look healthy enough, given the potential of some former Soviet oil producers amongst others, but prospects in the nearer term look grim.
So how bad can it get should relations with Middle Eastern nations, including Saudi Arabia, particularly if the Bush administration decides to go ahead and attack Iraq?
It is well-known that while the United States produces some of its oil supply, close to 10 million barrels a day, it is ultimately dependent on foreign oil reserves as the country imports 56 percent of its supply.
Yet, Iraq only produces about 1 percent of the total global petroleum supply, and international sanctions against the pariah state have already kept global dependence on Iraqi oil at a minimum.
The problem therefore is not dependence on the Iraqi supply, but rather the heavily reliance on other countries in the region.
There are, of course, a number of alternative sources of energy outside of the Gulf states, notably Russia, which produces around 7 to 8 billion barrels a day, or as much as Saudi Arabia. Venezuela, meanwhile, produces nearly 3 million barrels a day, and many oil analysts expect the country to be able to increase their output to meet U.S. demand should there be more need.
The problem, however, is ensuring that there are enough pipelines and other infrastructures necessary to get the oil out of the ground and flow to overseas markets. Most analysts expect that it could take several years before either Russia or Venezuela can step up their production and delivery capacities.
This leaves industrialized nations with a dilemma on where to turn until Russia and other nations step up production, for an attack on Iraq would certainly aggravate already tense relations between the United States and Saudi Arabia, and indeed the larger Muslim community worldwide. Moreover, it is worth bearing in mind potential alternative sources of supply such as Kazakhstan and Azerbaijan are also largely Muslim states and thus susceptible to becoming hostile.
Another risk is that while private Russian oil firms such as Yukos, Lukoil, and SNG have well-connected pipelines to Western Europe via Poland and Hungary, they often have unusual owners, even if they have shed most of their gangster reputation. The enormous Gazprom, world's largest gas producer is more like an independent country than a private company.
Gazprom's taxes fund a quarter of Russia's government budget. Although Europeans are happy to buy energy from post-communist firms like these, they nonetheless remain nervous about being too dependent on such less than transparent suppliers.
In the longer-term, however, the outlook appears brighter. For one, industrialized nations have become less dependent on oil than they once had. As a result, petroleum's share of import prices for the world's richest countries has fallen by two-thirds since the early 1980s. Meanwhile, there has been considerable progress in developing alternative sources of energy.
So the problem is unlikely to be systemic, and rather a concern over the next year or two, as non-Arab suppliers race to build up their pipelines to meet growing demands.
But until then, the political upheaval in Islamic countries will mean several years of expensive oil and tense diplomatic relations with petroleum-supplying nations.
