As oil prices seem destined to stay high, and perhaps get worse, economists warn of interest rate hikes blunting economic growth around the world.

With less growth (or negative growth), global economies use less oil.

Could terrorists be unwittingly stretching out the peak oil time frame?

http://www.thisislondon.co.uk/news/business/articles/timid78922?source=

In own word "Yes".

Terror can make oil prices rise, and force the peak oil price to happen, before there is a peak oil production, which again will make people begin energy conservation. Terror also lower travle, and it will also mean less new borns in the western world, which uses most of the oil.

And when the price of oil reach the price of alternative energy, then more people, business and countries will look into it, because it will be good business.

Ironically, yes. Perhaps we should hope that the so-called War on Terror isn't too successful.

" Unwittingly ? " Go ahead and call me a whacko conspiracy guy but I feel quite confident that if Saudi Arabia is actually not able to ramp up their production as claimed, these ( and future ) attacks are exactly what TPTB can use to conveniently dismiss the Matt Simmons of this world.

Okay, feel free to insult / harass / humiliate me....

As we have heard time and time... then the war on terror have just begun, and islamic fundamentalist will not go away, before freedom and democracy is spread in the middle east and asia, which could take many decades.

I doubt that we are able to avoid a peak in production because I'm sure we'll pay as much as we have to to have our precious energy. We'll diversify, of course, but the end result will inevitably be the same. Man will be brought back into balance with the universe.

Besides, you can't really have a peak in oil price until you're on the way down Hubbert's slope, the exact point being determined by fluxations in demand.

I guess it could, but maybe they don't want to.

I had a wild idea yesterday. I was trying to figure out why the terrorist hit the living quarters of the oil workers and not the actual infrastructure.

The latter would be much easier to achieve (thousand miles of unguarded oil pipelines) and would bring the US much more harm. We would be seeing $62 oil instead of $42. I guess Bin L. sitting in his Pakistani cave hooked up to his dialysis machine should have plenty of time to think of that.

Some suggest that the terrorism is heavily sponsored by Saudi oil industrials. Then it would make sense. Hitting their own infrastructure would harm their own profit.

This way it serves multiple purposes. Firstly they scare foreign investors away. They really don't want to see Shell, BP and Texaco drilling on their patch. Secondly they hurt the West (a nice bonus). Thirdly they make a good deal of profit along the way.

That risk premium we've been talking about goes directly to their pocket. Let's say tyhat the risk premium is now $7 per barrel. That means that they make an extra 70.000.000 per day (that's $25.550.000.000 per year). People have been killed for less.

Maybe they have some price level in mind and use some controlled terrorism to keep prices at that level.

Does this make sense or should I be making a reservation for the white padded room at the loony hotel?

Politicians can tax oil at any rate they want to, and force their populations to begin energy conservation... It was done in Denmark, and we did not have riots, but people started too save energy.

This artificial way of a high oil price will work in any western country, since goverments control/overview import/export of oil.

And the additional revenues can be recycled back to the terrorists. A business model a Harvard MBA would drool over.

You have raised a significant point, IMO. We should devote an entire thread to this.

Great post, Smiley.
And we can add that the oil companies are very very tired of that corrupted royal saudi family. Some wealthy people there, are dreaming to overthrow the actual regime to substitute it with something else. Saudi people are very tired too, and can support any coup d'etat, as long as the new regime will guarantee their no-tax and free-public-services lifestyle.
A change of regime in Saudia Arabia means literally an earthquake for all the Western countries... will see who's going to gain and who's going to lose from it.

Bottom line: every time we buy Saudi oil we're donating a tithe to the barbarians like Bin Laden who want to kill us.

The Saudi govt doesn't have to be implicated in a conspiracy here, the terrs know where their funding is coming from and will act with common motives. That is, the terrs know that by killing foreign technical workers, rather than blowing up pipelines or refineries, they can achieve all those things that JLK and Smiley mentioned.

Also, Al Qaeda have been weakend somewhat by allied military action, so they don't have the tactical and logistical resources to do spectacular attacks, and they're concentrating on leveraging what they still have. This is no reason for complacency, they can still do plenty of damage.

A successful outcome for the US & Allies in Iraq would necessarily include a regime that can act as a counterweight to disruptions or threats in or from Saudi. So despite whatever criticism can be raised about the war, it may end up producing that benefit.

However, ironically, I do have to agree that if the terrs do something that causes the price of oil to go through the roof, that will have the effect of buying time for Western Civ to get its act together. Damn crappy irony, that. We are living in highly paradoxical and challenging times.

I wouldn't say that Al Qaeda has been weakened, they are probably much stronger now than ever, with fresh flows of recruits from areas decimated by allied military action. Once your house is bombed, your family killed, everything you have gone, you're much more likely to want to join a resistance group than if you had peace and prosperity.

However, Al Qaeda don't need to attack us to make us feel terrified, because our politicians and our media are doing a very good job of that without their help. A few bombs here and there, and they're on easy street for a decade or so.

The bombings in Saudi Arabia, and the miscallaneous actions since, appear to be more to do with keeping the flame alive than actually fanning it. That and perhaps a bit of training and motivation for newer recruits.

Anyone else see this as a convenient way to explain continually rising gas prices? The "Terror Premium" came out of nowhere in the last week with that killing of 22 person murder spree in Saudi Arabia. The media has grabbed ahold on this to explain rising oil prices. It may be real, but I have a feeling we're going to keep seeing this phrase as oil prices sky rocket. In 2 years ask any random person in the US why gas is $3 a gallon: "The Terror Premium is really hitting us hard now, that's why we have 8 zillion troops in the Middle East". It's a convenient way to keep people from realizing the truth about oil depletion and panicking, and a convenient excuse to pump more troops into the Middle East. "We need to control the terrorists to keep gas prices managable."

However, there are also many predatory speculators out there who will gladly rape, rob, and pillage with any excuse they can find, terrorism included (and in the case of terrorism, that's called war profiteering, which in my opinion is the second cousin of treason). The only emotions these people understand are fear and greed, which is a partial definition for clinical sociopathy.

Have you heard the Enron tapes, broadcast on CBS? Shocking. Pierce the corporate veil, lock 'em up & throw away the key.

We'll probably also have to put up with, "Yeah, prices SEEM high, but, allowing for inflation, they're not high at all." I was annoyed by that phrase when I first heard it and I suspect it will continue to plague me for several more years.