Simulation Shows Turmoil Likely from Oil Shocks

"It's 11 days before Christmas 2005, and the turmoil is preventing about 600,000 barrels of oil per day from reaching the world oil market, which was already drum-tight. Gates, functioning as the top national security adviser to the president, convenes the Cabinet to discuss the implications of Nigeria's spreading religious and ethnic unrest for America's economy...Fast-forward to Jan. 19, 2006. A blast rips through Saudi Arabia's Haradh natural-gas plant. Simultaneously, al Qaida terrorists seize a tanker at Alaska's Port of Valdez and crash it, igniting a massive fire that sweeps across oil terminals. Crude oil spikes to $120 a barrel, and the U.S. economy reels. Gasoline prices hit $4.74 a gallon.

"You get the picture. The scenario is intended to show how vulnerable the U.S. and world economies are because of dependence on oil from places where political instability threatens orderly production and distribution."

Thanks to Michael Dudley