Rolling Along

Demand for oil has increased, especially in the developing world, and as a result the price of oil has skyrocketed. An increase in the price of oil would seem to have clear benefits for oil producers, howeverthat is not so, according to the Economist. The increases in the price of oil act as an inflationary force on the global economy, raising the price of a wide range of goods and services-all goods that use oil in manufacturing or transportation, as well as all services. A similar thing happened in the ’70s which resulted in a long term decrease in the demand for oil, and there is a fear that the same thing could happen now.
Another effect of the 1970’s oil crisis was the sudden accumulation of large amounts of wealth in a small group of people, and the resulting tensions “helped create a fundamentalist backlash that produced, among other things, al-Qaeda.” So perhaps a war to keep the price of oil down is actually a war against al-Qaeda, however ineffectual it is likely to be.