KUALA LUMPUR -- The installation of a friendly regime in Baghdad does not necessarily mean it will be advantageous to the United States as far as oil production is concerned, Azam Aris, managing editor of the Edge, Malaysia's leading business weekly, told IRNA here.

Without Saddam Hussein and a friendly regime installed in Baghdad, Azam said the general assumption is that oil will flow freely into the international market.

However, citing an example, he said that Shah Reza Pahlavi, the toppled dictator of Iran, was a strong ally of the U.S. but in 1976 he was a strong proponent of controlling production to get a higher oil price.

To substantiate his contention that oil was underpriced, Azam said the Shah made a comparison with Coca-Cola.

At that time, a 12oz bottle of Coke from vending machines cost 20 cents or $2.13 a gallon.

"Had coke been sold by the barrel (which is equivalent to 42 gallons), it would have cost $89.46. The price of oil -- which powered the world economy -- at that time was only $11.65 a barrel.

"To the Shah, $100 a barrel was not unreasonable," Azam explained.

He said that although Iraq itself is a member of the Organization of Petroleum Exporting Countries (OPEC)-- once a mighty cartel -- a U.S.-dictated regime will help to loosen OPEC's grip on supply, especially that belonging to the world's largest exporter, Saudi Arabia.

At present, the 11 OPEC members -- Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Iran, Qatar, Nigeria, Libya, Algeria, Indonesia and Venezuela -- produce 24.5 million barrels of oil per day (bpd).

He said that although world consumption is estimated at 75 million BPD, OPEC still controls more than half of the world's crude oil export.

"What is more significant is that OPEC controls two-thirds of the world's proven oil reserves--the future lifeline of industrialized nations," Azam explained.

He noted that while some world leaders see OPEC as an economic irritant, the cartel claims itself as a stabilizer that guarantees the world with enough supply but at a "fair" price to producers.

OPEC's pricing mechanism seeks a price range of $22 to $28 a barrel.

If the price drops below $22, it will reduce production and the opposite if the price exceeds $28.

To help ease the current upward pressure on price, it will increase production capacity by 1.5 million BPD this month.

Azam said cheap oil will help power economic growth in the U.S. and industrialized countries, spurring consumer demand.

He said a sustained price of $35 to $40 a barrel will likely push the economy into another round of recession.

So, for the U.S., he said the equation is simple: "Let's go to war, secure oil supply, let cheap oil flow and help boost the economy.

"This equation is, indeed, simple if everything falls into place," he said, adding that the assumption is that with the U.S. and UK's massive arsenal of weaponry, the war will be a short one.

But a war not sanctioned by the United Nations, even if it were short, might trigger long-term problems especially in the Middle East and the Islamic world .

He stressed that he expects an emotional protest and outburst from the Islamic world.

"War with Iraq could well be over in a short time, but war against international terrorism could be prolonged. Still, the impact on the U.S.-led world economy would be minimized if the war is a short one," Azam warned.

"But will cheap oil be available immediately? Will OPEC lose further control over its export markets and Iraq be a renegade member? The answers to most of these questions will be unlikely," Azam said.

The eight-year war with Iran in the 1980s followed by the first Persian Gulf war in 1991 and, since then, the continuing economic embargo has left the infrastructure of Iraq's oil industry in shambles.

Iraq's current sustainable production is two million bpd.

Azam quoted former Iraqi Oil Ministry official Fadhil Chalabi, now executive director of the Center for Global Energy Studies in London, as saying given sufficient time and money, Iraq's production could be ramped up to eight million bpd -- what Saudi Arabia is currently producing.

But it will take time -- anything between five and 10 years -- and with estimated investments of $35 billion.

Azam pointed out that money will flow fast if it were a stable, democratic Iraq but that investment risks would be high if the Kurds, the majority Shia, and the minority Sunni cannot find an amicable solution to power sharing.

And, he said, even if Iraq can produce up to eight million bpd, it will not be of much benefit to them if the oil market is flooded with cheap oil, said IRNA.

Azam reminded that no OPEC member or, for that matter, big non-OPEC producers like Mexico, Russia and Azerbaijan -- which need money badly -- will want to see the price drop to $10 a barrel as in 1998. "Such a price would not help in the reconstruction of Iraq nor will it encourage multinationals like Exxon Mobil, Shell and British Petroleum to invest money in exploration works," he added.