With strikes and protests triggered by escalating fuel price spreading across Europe, we look at what the world media is saying about the swelling oil prices.

Foreign Affairs

Blood Barrels: Foreign Affairs

Oil, the world’s most sought-after commodity, is also the prime contributor towards breeding violence and conflicts between countries, especially if both are oil producers. The article notes that while the number of civil wars and smaller conflicts has reduced across the world, no such situation seems to be in sight in oil countries. The latter contribute to one-third of the civil wars (up from one-fifth in 1992), proving that oil wealth can wreak havoc in a country’s economy and polity.

Think Gas is High? Try Europe: Time

The article discusses the surging oil prices in Europe, where the average cost ($8.70 per gallon) is more than twice what the Americans are shelling out, owing to Europe’s higher tax burden on fuel. The hardest hit have been the fishermen and the farmers, with many boat owners and trawler fleets facing bankruptcy. While lowering the Value Added Tax, as French President Sarkozy has proposed, would provide immediate relief, it would also deprive governments of sorely needed tax revenues.

Are pension funds fuelling high oil prices?

Der Spiegel

Is speculation by institutional investors and sovereign wealth funds causing the spike in oil prices? In a discussion of an allegation made before a US Senate hearing, the article says that the testimony on May 20 blamed big investors of pouring money into the commodities market for the hike in the global oil prices. Corporate and government pension funds, university endowments and SWFs have all indulged in excessive speculation and hence triggered the crisis. However, it is only over the last two years that the number of financial players in the energy markets has exploded.

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