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Oil Price Rise Causes Global Shift in Wealth

"But there is very little publicity about it -- you don't see many headlines saying, 'Oil at all-time record high,' " said Chris Skrebowski, editor of Petroleum Review, a published by the Energy Institute in London. "It's different from the United States. Here, everyone has just accepted that it is expensive."

While British drivers are feeling the pinch, the government is gaining revenue, Skrebowski said, because about 80 percent of the cost of gas is tax. Because Britain produces almost all the oil it consumes, its economy has been cushioned against increasing oil prices, Skrebowski said.

But Britain's North Sea oil production is dwindling, having peaked in 1999 at 2.6 million barrels per day. Today, production is 1.4 million to 1.6 million barrels per day, Skrebowski said, while domestic oil consumption is about 1.7 million barrels a day. Prime Minister Gordon Brown, who took office in June, has made energy independence a priority.

Meanwhile, analysts said, Europeans buying oil priced in dollars are finding the rising prices somewhat cushioned by the strength of their currency. The value of the dollar has been sliding to record lows against the euro and the British pound.

Argentina has tried to keep fuel prices for consumers at artificially low levels.

President N¿stor Kirchner in recent years has leaned heavily on energy companies to keep prices down, going so far as to call for a public boycott of Royal Dutch Shell when the company raised pump prices. Individual suppliers -- wary of attracting the ire of the government -- have adopted a policy of raising prices gradually and by small amounts.

As the market pressures have mounted, Kirchner has signed a series of agreements with Venezuelan President Hugo Ch¿vez. This year, the two created a project called Petrosuramerica, a joint venture designed to promote cooperative energy projects and provide energy security to Argentina.

In Brazil, the region's largest economy, high oil prices have had a different political effect. Last year, the country became a net oil exporter, thanks to major increases in domestic oil exploration and the country's broad use of sugar-based ethanol as a transport fuel.

But new oil wealth can trickle away even more easily than it comes. Last month, Standard & Poor's downgraded Kazakhstan's credit rating after the country's banks lost billions on purchases of subprime mortgages.

Correspondents Peter Finn in Moscow, Blaine Harden in Tokyo, Ariana Eunjung Cha in Shanghai, Kevin Sullivan in London, Craig Timberg in Johannesburg, Stephanie McCrummen in Nairobi, Monte Reel in Buenos Aires and Faiza Saleh Ambah in Jiddah, Saudi Arabia, and special correspondents Aminu Abubakar in Kano, Nigeria, and Alia Ibrahim in Beirut contributed to this report.


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