The Iraniraq War And The Persian Gulf

Yet another crisis occurred in 1980 after Iraq, under the leadership of Saddam Hussein, its president from 1979 to 2003, invaded Iran. The conflict nearly drove Iranian oil production to a halt and greatly slashed oil production in Iraq. The situation impacted oil imports to the United States but did not affect the country as severely as the previous two crises had. In 1990, however, during the U.S. presidency of George H. W. Bush, Iraq invaded neighboring Kuwait under the leadership of Hussein, possibly to commandeer Kuwaiti oil operations. In response a coalition of U.S. and international military forces launched Operation Desert Storm, or the Persian Gulf War, to force Iraq out of Kuwait. Not only did the conflict threaten oil imports to the United States, but during the war Iraqi soldiers set oil fields ablaze in a gesture of defiance of Western countries.

OTHER EVENTS IMPACTING OIL PRICES Another event that threatened the stability of U.S. oil prices and supplies was the September 11, 2001, terrorist attack on the United States. After the attack the United States experienced record-high oil prices and a general insecurity over oil imported from the Middle Eastern region. Other challenges that have affected U.S. energy supply in immediate and substantial ways are hurricanes and other unpredictable natural events. In August 2005 Hurricane Katrina struck the Gulf of Mexico, damaging oil production facilities, terminals, pipelines, and refineries off the coasts of Texas and Louisiana, which are responsible for a quarter of all domestic oil production. Oil production throughout the region declined significantly, causing a severe drop in U.S. oil output. The disruptions in the supply of gasoline and other refined oil products that followed the hurricane caused oil prices to spike nationwide. The price of oil reached a record high of $70.82 per barrel on August 30, 2005.

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