Oil prices burst through $89 hit record high

A surge in crude oil prices at new high could add unwanted inflationary pressure to the Malaysian economy. Oil prices burst through $89 a barrel to hit record high yesterday on the back of growing energy demand forecasts and fears that escalating conflict between Turkey and Kurds in northern Iraq could hit supplies in the Mediterranean.

Last week the International Energy Agency, adviser to 26 industrialized nations such as Britain and the US, predicted that demand would surge by 2.1m barrels a day during 2008. OPEC insists "the current supply and demand forecasts predict that the market will be fundamentally balanced over the coming quarters" cause the market to be jumpy.

The market trigger by a real oil shock with the announcement of the Turkish parliament has voted to allow its military to make an incursion into Iraq and chase down Kurdish rebels staging cross-border attacks. Turkish Prime Minister Recep Tayyip Erdogan's government had asked parliament in Ankara on Monday to authorize a military incursion, and the lawmakers responded with overwhelming approval, 507 to 19.

An incursion across the border would violate the sovereignty of another country. It will be considered against international rules and treaties and will affect negatively on the security and stability of the Kurdistan region in northern Iraq. The implications of taking the law into ones hand and unilateral action will spell trouble for all especially disrupt oil supplies in the region?

The Kurdistan Workers Party PKK is listed as a terrorist organization internationally by a number of states and organizations, including the USA, NATO and the EU. More than 37,OOO people have been killed in the Turkeu-PKK conflict since 1984.

The Kurdistan Workers Party PKK, an armed militant group founded in the 1970s and led, until his capture in 1999, by Abdullah Ocalan. Originated from Ankara, but move its focus to the large Kurdish population south-east Turkey, where they began organizing. With the official release of the "Proclamation of Independence of PKK" on October 27, 1978, the group became known as the Kurdistan Workers Party.

The PKK's ideology was founded on revolutionary Marxism-Leninism and Kurdish nationalism and soon found itself in conflict with right wing entities. It's goal has been to create an independent socialist Kurdish state in a territory which it claims as Kurdistam, an area that comprises parts of south-eastern Turkey, north-eastern Iraq, north-eastern Syria and north-western Iran; those states oppose any such change. It is an ethnic secessionist organization that uses force and the threat of force against both civilian and military targets for the purpose of achieving its political goal.