The world is getting used to higher energy costs, as oil touches new highs every day. Tensions over the Israeli, Lebanese and Palestinian conflict is threatening to escalate further as Hezbollah, the southern Lebanon based militant group, has declared open war on Israel and have even struck a naval vessel that was blockading Lebanese ports.



Foundations of many developing economies are being shaken while oil rich nations make hay as the sun shines brighter than ever before on them. Sensing the world’s dependence on Oil, the Saudi government even reduced the price of oil for its citizens by as much as thirty percent some time ago.



With Iran and Syria, having come out in support of the Hezbollah and the US having vetoed a resolution against Israel in the UN, the lines are getting drawn, should the war engulf more countries. The other Arab nations are holding emergency meetings and no doubt tempers must be high. Most of Iraq is already a lawless land.



Israel may take the opportunity to strike the nuclear facilities of Iran which would widen the conflict and send the oil prices spiraling out of hand. It would not be a surprise if we see 100 $ a barrel of oil price in the near future.



While the G-8 meet in St. Petersburg to deliberate over trade, energy security and other matters, developments in Middle East are bound to overshadow any outcome. Where as some countries like China have already grown bigger than some of the elite G-8 group of countries, India and Brazil are growing at a fast pace, it appears senseless that this group can achieve anything substantial without including these nations which probable account for about half the global population.



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