Oil output and prices

Oil output and current prices have little to do with each other. Iraq's production, for example, has been back to pre-war levels for quite some time:

Oil Output Is Up, But Pace Of Future Growth Uncertain

GENERAL BACKGROUND

So the fact that oil prices have almost doubled and are hanging out over $50/barrel has more to do with nervous markets and speculation than supply. As such, some of those who are buying at these prices (and thus driving the price hike) are bound to get burned eventually when prices normalize (in other words, when they drop.)

Iraq's economy (and for that matter,Afghanistan's as well) is booming right now. 50% growth this year (2004) by some acocunts. Per capita income is up 100's of percent. All this with a still-shaky security situation. Poor security is the number one barrier to foreign direct investment. Imagine how much better once this Falluja thing is finally sewn up.