CBS Downplays Terrorisms Impact on Oil

CBS Downplays Terrorisms Impact on Oil
BusinessWeek cited oil analysts who estimated much higher costs from terrorism.

By Ken Shepherd
Business & Media Institute
June 9, 2006

     The threat of terrorism is just one factor in the price of a barrel of oil, but many estimates show its a significant one. Yet CBSs Anthony Mason recently gave a low-impact report of how much terrorism and political instability factor into oil prices.

     By some estimates, the troubles in Iraq and Iran have added a five- to 10-dollar terror premium to the price of every barrel of crude, noted Mason in his June 8 Evening News report on what might happen to oil prices in the wake of terrorist Abu Musab al-Zarqawis death at the hands of a U.S. military strike team.

     Yet in March, a month after Iran announced its resumption of uranium enrichment, BusinessWeek found a much higher terror premium than what Mason reported. In the March 13 issue, writer Peter Coy asked oil analysts James Ritterbusch, Sarah Emerson, and Tim Evans for their estimates on how much terrorism plays into the cost of oil.

     Coy reported that Emerson put the terror premium at $15, Evans at $25-$30, while Ritterbusch refused to go with a particular number although he believes terrorism and geopolitical fears factor into the price of oil.

     CBSs Mason didnt give a source for his much lower estimate and didnt acknowledge that it might be on the low end.

     The Business & Media Institute has repeatedly documented the medias preference to speculate on price gouging by oil companies while ignoring or downplaying the impact that political instability has in oil prices.