Skip navigation
Watchlist Sponsored By :
  • 10 States for Cheapest Gas

      With consumers feeling the pain at the pump this summer, what states rank among the cheapest for a gallon of regular unleaded on average?

  • 10 Recession-Proof Jobs

      Despite a slowing economy and layoffs in many industries, certain professions remain in high demand and are expected to weather a recession better than others.

  • Stock Picks for Your 20's

      The sinking stock market is enough to scare off most investors, let alone those in their 20s. Here are picks for Twenty-Somethings using a five year time horizon.

  • Texas is Tops in 2008

      Texas knocked out last year's top state for business, Virginia. How did your state fare in our annual study?

  • Powering the Planet

      Energy has become the most common denominator in the global economy. Ultimately, it may be the great unifier. After all, imagine a world without energy, affordable energy.

  • Apple & The New iPhone

      Second acts should not be taken for granted. Apple and Steve Jobs have yet to make that mistake and they're unlikely to do so with the launch of the new iPhone.

Little Oil at Risk From Turkey-Kurdish Tension
By Reuters | 16 Oct 2007 | 01:21 PM ET
Font size:

Only a fraction of global oil supply could be immediately threatened by a Turkish incursion into northern Iraq, but crude prices have surged on concern any conflict may escalate and disrupt the flow from the Middle East.
Oil Prices
AP
A Turkish soldier patrols near the Iraq border.

U.S. crude futures hit a record high of $87.97 a barrel on Tuesday, a day after the Turkish government asked its parliament for permission to launch attacks on Kurdish separatists in northern Iraq.

The effect of the dispute was magnified in oil markets as it came against a backdrop of tightening supply, said Paul Horsnell, head of commodities research at Barclays Capital.

"I think it has been taken as totemic for a general series of potential supply risks," Horsnell said. "We're hardly talking about a large supply stream that is at threat here."

"The price rise is part of a trend that has been going on for quite a while, of tightening balances in the oil market. Inventories are thinning, so geopolitical concern is going to get a different response to say a year ago, when stocks were higher."

Oil prices have been above $80 a barrel for most of the past month amid concern that supply may be strained during peak winter demand.

The Real Threat: Further Iraq Instability

Iraq and neighboring major oil producers Saudi Arabia, Iran and Kuwait between them produce over 17 million barrels per day, around 20 percent of the world's supply. Any hint of those supplies being affected would send oil spiraling higher.

In contrast, Iraq's Kurdish region produces just a few thousand barrels per day, a tiny fraction of global oil supply of 85 million barrels.

"The threat to the oil market comes from the potential regional fallout of an eventual Turkish attack on northern Iraq and the stability of Iraq itself, not from any isolated incursion," said Valerie Marcel, Dubai-based associate fellow and energy specialist for London think-tank Chatham House.

"Would there be any permanent claim or permanent incursion? If so, other neighboring countries may want to stake their claims."


HOME  |  NEWS  |  MARKETS  |  EARNINGS  |  INVESTING  |  VIDEO  |  CNBC TV  |  CNBC PLUS  |  CNBC HD+
About CNBC   |   Site Map   |   Privacy Policy   |   Terms of Service   |   Advertise   |   Help   |   Feedback   |   Video Reprints
  Data is a real-time snapshot   *Data is delayed at least 15 minutes

Global Business and Financial News, Stock Quotes, and Market Data and Analysis