``The International Energy Agency is counting on Iraq to provide 45pc of the entire increase in global oil supply by the end of the decade, badly needed to meet growing demand in China and India. This requires vast investment -- rising to $540bn by 2035 as output tops 8m b/d -- but such outlays are implausible as the state slides towards sectarian civil war... Ole Hansen, from Saxo Bank, said a fall in Iraqi output to levels seen in the last Gulf war would cause a $20 price spike. "The entire economic recovery could stall, and we could even slip back into recession in some regions," he said.''

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