Oil Price Warfare(1)

Winning wars in the future may depend not only on how many troops you can put into the field but for how long you can afford to pay high prices for gasoline.

Issue: Sept-Oct 2006

Waging war in this tight-oil age will be an especially hazardous undertaking, not only tactically and economically, but also geopolitically. Preventing any sudden oil-price spike has become a strategic priority, circumscribing the maneuvering of defense architects and, for all of warfare's inherent risks, posing profound new challenges.

We can no longer assume, as we did as late as 2003, that oil markets will quickly recover from a minimal disruption in supply caused by military action in a major oil-producing region. Given the vulnerability of the global economy to oil-price shocks, as well as the political fallout from high gasoline prices, Washington's ability to use military force in various parts of the world, notably against Iran, will be significantly constrained, not least because a large body of global political opinion would pin responsibility only on Washington for the consequent damage to the global economy.

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