Chance of War Now 90%, Price of Oil May Hit $80 a Barrel, Consultant Says

There is a 90% chance that war will break out between Iraq and the U.S.-led multinational force in the Persian Gulf, a consulting company said today.

British-based Oxford Analytica, drawing on academics around the world, said a gulf war would “spark terrorism against Western targets worldwide” and could send oil prices as high as $80 a barrel if oil fields are hit.

“No war is inevitable, but unless President Bush loses his nerve or Iraqi President Saddam Hussein orders his troops to conduct a total withdrawal from Kuwait, hostilities will erupt by March at the very latest,” said David Lay, the former BBC commentator who edits Oxford Analytica’s daily briefing sheet.

Should a gulf conflict disrupt oil production and shipments, the open market price of oil could soar to $60 or $80 a barrel. But the consulting company said that if the crisis is resolved without war, oil prices will settle into the low $20 range.