Oil prices have been turning upward, slowly but steadily, throughout the world. So far, the blow to the economy seems to have been limited. However, oil supplies are becoming increasingly unstable. With oil exports from Iraq partially suspended, prices have climbed to the $50-per-barrel level. This situation does not allow for unqualified optimism.
The problem appears to be more serious in the United States, which is more dependent on oil in its living and energy sectors than Japan, and in China, where oil demand is tight because of rapid economic growth. If these two countries, which have served as the locomotives of the world economy, suffer a sudden downturn, the impact will reach Japan as well.
In addition to the Middle East situation, centering on Iraq, oil-producing countries outside of that region, including Russia and Venezuela, are facing destabilizing factors in their oil-supply regimes because of oil company bankruptcies and political uncertainty. This has led to speculative scheming on the oil futures market, which in turn has accelerated the rise in prices. The environment that permits this rampant speculation does not look set to improve in the near future. In Iraq, for example, public order shows no signs of stabilizing.