LONDON -- "We hear that Iraq may be targeted," said Sheik Ahmed Zaki al-Yamani, oil minister of Saudi Arabia during the 1970s and '80s heyday of the Organization of Petroleum Exporting Countries and now chairman of the London-based Center for Global Energy Studies. "Now, if that is a fact, the attacks will remove Iraqi production (from the marketplace). There could be knock-on effects." By which he meant very expensive oil.

Yamani made his remarks six weeks ago, just before the United States began bombing Afghanistan. Now, with the Taliban regime near collapse and the first phase of President George W. Bush's "war on terrorism" seemingly close to success, speculation in Washington about a follow-on strike against Saddam Hussein's regime in Iraq is growing daily more heated. But if an attack on Iraq means soaring oil prices and, in turn, a longer and deeper recession in the U.S., then Saddam is probably safe.

Oil remains the most volatile key commodity in the global economy, having dropped to as low as $10 a barrel and soared above $30 a barrel within the past 30 months. The price more or less stabilized in the upper $20s during most of this year, but it again nudged $30 after the terrorist attacks in the U.S. on Sept. 11, only to fall below $20 as the rapidly deepening recession ate into demand.