Reply #2: don't worry, when the $1/bbl iraqi oil comes on line, prices will dive

[treepig]

on second thought, i don't believe the $1/bbl figure (compared to $10+ in the usa). i'm arbitrarily going to assume it will cost at least $2/bbl.

but that's still a bargain, right?

but perhaps we should factor in the $166,000,000,000 "capital costs" involved (i.e., the iraq war to date). let's say we get a 30 year 7% loan to pay it off - that adds $36,809,041 per day in costs to the price of oil we're getting.

and what about continued costs of occupation? i suspect that $3 billion per month will be needed (probably forever), that's another $100,000,000 per day to add to the price of oil.

apparently, daily production has just reached 2 million bbls. rumsfeld projects it will reach 6 million by 2009. other people think 4 million is optimistic. perhaps a realistic number is the present level of 2 million.

in any event, i've taken the liberty of summarizing these different scenarios in the following graph:



and it might be noted that halliburton's cut isn't even figured in - so get used to the high "real" cost of gasoline!!