According to most polls, a majority of Americans have taken little interest in the jihadist takeover of northern Iraq last week and certainly have no appetite for any sort of US intervention there.
But what about a decided distaste for $5-a-gallon gasoline this summer? That scenario has become a real possibility due to the events along the Tigris River in recent days.
That’s because until the chaos of the past week, Iraq’s oil production had been an unsung success story — increasing rapidly to 3.3 million barrels a day, making it OPEC’s second-highest producer after Saudi Arabia.
In fact, until recently, Iraq’s oil minister stuck by lofty projections that his country would be able to increase the oil it’s pumping by 20 percent, to 4 million barrels a day, by the end of the year.
That now seems to be off the table, and with contractors from Western oil companies being evacuated from the country this weekend, the prospect of new investment in oil extraction is dim at best.
This leaves a huge output vacuum in addition to the one left by turmoil in other OPEC countries from Nigeria, to Venezuela, to Libya — where production is down by nearly 90 percent from its 2011 peak.
The price jump comes even as the fighting in Iraq remains to the north of its key oil-producing regions, but the threat to oil exports is obvious.
Indeed, a report from Saxo Bank said, “The key question over the coming days and weeks is whether Baghdad, Karbala and the Shiite-controlled oil-producing fields and export facilities in the south can . . . avoid becoming embroiled in the conflict.” If not, experts say, oil prices could spike by as much as $20 a barrel, to 2008 highs.
For a US economy that contracted by more than 1 percent in the first quarter led by a slowdown in consumer spending, such a possibility would be a huge blow to the recovery.
But if that’s not enough, sky-high oil prices would be a boon to Russian President Vladimir Putin as he reigns over Russia’s vast oil reserves. Once again, it looks like the wily spy is winning the geopolitical chess game.