Is it "dÈja vu all over again," as Yogi Berra, the great American baseball player once famously proclaimed? Will it be another war in the Gulf? Saddam need not take such stupid risk. He does not even have to forward-deploy his Republican Guard to intimidate the rest of the world--especially, the Kuwaitis and Saudis who are not exactly the bravest denizens of the desert to begin with. Today, Saddam's clout derives not from his military, but from the markets. The reason is simple. Iraq presently pumps 3 million barrels per day, of which half a million is allocated to domestic consumption. If he takes the other 2.5 million off the market, all of OPEC cannot presently cover the shortfall. Power is at its highest when you need not use it.

Its purpose is clear. Saddam wants to get rid of the sanctions. And it is just as clear that he wants to resume working on his weapons of mass destruction without those bothersome UN inspectors. So the Gulf War coalition might usefully dwell on its timidity and miscalculated realpolitik that allowed Saddam to escape unscathed in 1991.

Is the world Saddam's hostage again? Not quite. The industrial nations belonging to the Paris-based International Energy Agency currently possesses reserves worth almost half a year of imports. To open up these strategic reserves would be the most important signal right now. As a flanking measure, the U.S. and Britain, which are conducting an on-and-off low-level bombing campaign against Saddam, might remind him of his military vulnerability. A special meeting of the G-8 plus their central bankers might consider stand-by liquidity measures if the markets keep dropping; that would be good for global confidence-building. But in the longer run, it is back to the key lesson of the oil shocks of 1973 and 1979. It is wiser to raise the price of oil at home in order to reduce dependence on this drug than to fall prey to the rogues of this world.