While oil prices have witnessed a massive tumble in recent weeks in response to the lower demand impact because of the retreating global economy, new world tensions might act to send prices higher very soon. The first evidence of this came today when oil prices edged up slightly in the light of the new Gaza combat and the heightened India and Pakistan tensions.
The military activity by Israel in Gaza is some of the most violent in some time, and although this has no direct effect on oil shipments, it has nonetheless had some impact on global oil speculation that always is wary of a larger Mideast problem or of sympathy among Arab oil producing states for the Palestinian cause.
And the dangerous tensions between India and Pakistan are most worrisome because of the nuclear weapons that both states possess. In a worst case scenario, an actual war in which nuclear weapons might be used could really send oil prices reeling in response to such a dangerous and destructive conflict.
And another problem is that the lame duck Bush Administration has lost significant clout in acting as a world problem-solver because it only has days left in office, while President-elect Obama cannot really act with real authority to address these issues head-on short of offering some statements that appeal for peace or reason. All of this makes this a very dangerous period. World trouble spots are mostly on their own right now with the U.S. unable to use it's influence as well as it can during the more stable periods of leadership.
Whenever "horses are being changed in the middle of a stream" this is where a few dangerous international issues might spring up into a near crisis point. The rest of the world community as well as the UN need to do all that they can to control some world elements acting like children without an adult guardian until the U.S. is able to stabilize it's new leadership and then help to create more world stability with some like future Secretary Of State Clinton dispatched around the world in shuttle diplomacy.
But for now, world oil prices may act as the greatest barometer of how the world community actually feels about the current state of world affairs. And those tea leaves read anxiety about the world economy, coupled about anxiety about world peace in the wake of the two new international crisis points.
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