Energy prices spell doom for world economy

WASHINGTON, April 28 (UPI) -- Major world economies are in for deep economic trouble if unrest in the Middle East and elsewhere continues to cause adverse market reactions, a scholar said.

Conflict erupted in Libya, one of the top oil producers in North Africa, in February following revolutions in Tunisia and Egypt. Energy prices skyrocketed in the wake of the Libyan conflict that followed.

U.S. Federal Reserve Chairman Ben Bernanke in a news conference Wednesday said high oil prices were a drain on the U.S. economy. Gasoline prices, which in part follow similar trends as oil prices, are taking a toll on consumers.

Paul Sullivan, a professor at Georgetown University, writes for al-Arabiya that the so-called Arab Spring could lay waste to the world economy.

"The combination of sectarian tensions within and across the states of this region mixed with oil could prove to be explosive beyond any common expectations to date," he warns.

Much of the oil transported through the Middle East and North Africa travels near major conflict zones in Bahrain, Egypt and Saudi Arabia. Pipelines for oil and natural gas are often the target of sabotage.

Al-Qaida, Sullivan warns, is keen on targeting oil facilities in Saudi Arabia, the largest oil producer in the world. The problem extends to Latin America, however, where energy giant Venezuela struggles to increase production. A booming Asian economy, meanwhile, means markets elsewhere will have to fight to meet domestic demands.

"If these demands ramp up at the same time further political and supply shocks happen in the North Africa and the Middle East, or elsewhere, then we could be in for a very expensive summer globally," Sullivan said.