Political risks, such as social upheavals in the Persian Gulf, terrorism, and future wars have the potential to significantly affect the global supply of oil and drive prices up. Ongoing events in the Middle East; rising demand for oil in developing countries, especially India and China; commodity speculation in oil; and potential terrorist attacks on key transportation nodes, refineries, and oil fields have a major economic impact on the oil market. However, the global oil market can adjust to supply disruptions.
Reliance on long-term market forces and coordinated security activities with allies and major oil producers and consumers can restore confidence in energy markets faster than a response that relies solely on government intervention. The lack of U.S. leadership in case of an oil crisis, however, would lead to further threats to the global energy production and transportation system and to negative economic outcome
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