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Vol 44 No 6

Published 21st March 2003

Oil empires

Some US hawks see African oil as a strategic alternative to Gulf oil. The reality is less dramatic

Africa will be a net loser from the war in Iraq. Even if the war ends quickly, the effects of higher oil prices and the redirection of trade, investment and aid to the Middle East will further dent Africa's already sluggish growth this year. Yet African oil producers - particularly Angola, Equatorial Guinea and Nigeria - hope to benefit both from higher oil prices and from increasing international competition for oil. Such hopes are tempered by commercial reality. Most of Africa's production is costly compared to that from Iraq's oilfields, where production costs could be as low as US$2 a barrel, if Iraq's 2,000 wells survive the war. If President Saddam Hussein's government torches them, the oil price could spiral higher still.

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