The US is planning far in advance - energy (oil) being the crucial player, to make sure not only the supply of oil but at a reasonably low price.

Crude oil prices in the US affect prices around the world, and would also affect prices in developing countries in South Asia and elsewhere. In Pakistan's case, however, the impact of higher oil prices on the economy may be cushioned to some extent by the fact that Saudi Arabia recently agreed to supply crude to this country on a deferred-payment basis for the next one year, under an arrangement similar to the one under which it has been supplying crude to Pakistan on deferred-payment since 1998. Kuwait, from which Pakistan imports petroleum products, is understood to have agreed to similar terms.

These arrangements notwithstanding, Pakistan's economy is still likely to be impacted by higher oil prices - the adverse affects of which are already being seen in the higher prices that Pakistani industries are paying for imported petroleum-based raw materials, such as polypropylene granules (used to make polypropylene yarn for the textile and carpet industries and other applications), for example, which have nearly doubled in price in the last few weeks.

The government needs to devise a mechanism to protect such industries, especially export-oriented industries, from such price increases. The mechanism could take the form of a compensatory reduction in import duty, or some other appropriate form.

Iraqi oil has been part of the behind-the-scenes discussions at the United Nations, where the Security Council is still debating how to disarm Iraq. While the five permanent Security Council members (the United States, Britain, Russia, France and China) - each of whom can veto any new Iraqi resolution - reject the idea that oil is playing a role in their manoeuvres, a three-way struggle has emerged.

No reputable analyst denies the windfall that would result for Western energy firms and Western economies from an extended American occupation of Iraq. As NBC noted, while Iraq's political landscape is complex and potentially explosive, Washington sees a post-Saddam Hussein Iraq as an opportunity to ensure that Iraq's vast potential as an oil supplier, long retarded by post-1990 UN sanctions, can be used to stabilise or even lower oil prices for decades to come.

Sitting on the sidelines ever since the United Nations slapped sanctions on Iraq in 1990 (following its invasion of Kuwait in August that year) are the giant American oil companies, which have watched enviously over the past decade as Saddam Hussein signed deals with Russian, Chinese, European and other firms to exploit new oil fields once sanctions are lifted.

Added to all this is the key geo-political fact of the post-9/11 world: America's deep displeasure with Saudi Arabia, currently America's largest oil supplier in the Middle East and the nation that, by and large, controls the world's oil markets through its own enormous reserves (284 billion barrels) and its lock on the internal politics of OPEC - the Organisation of Petroleum Exporting Countries.