Mideast in Crisis: Impact on Economy, 2012 Election

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Gas prices have already reached $4 and even $5 a gallon in some parts of the country.

Oil prices have risen due to the fighting in Libya and that could mean even more financial pain at the pump in the weeks ahead.

Fierce fighting continues in the eastern part of Libya. Leader Moammar Gadafi's warplanes have launched new air strikes. They bombed an area near a strategic oil field -- the second largest in the north African nation, now controlled by anti-government forces.

Our panel of experts – including CBN News Washington Correspondent John Jessup, CBN Terror Analyst Erick Stakelbeck, CBN News Sr. Editor John Waage and Karen Miner Hurd of the Virginia Tea Party Alliance -- explore the impact of the changes in the Middle East on the U.S. economy and its affect on the 2012 elections, on the CBN News Midday News, March 3.

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After the air strikes, the rebels deployed themselves around the area to protect it.

"In many parts it's just a mess," said Seif Gadafi, Moammar Gadafi's son. "Chaos."

Also, with Libya's army fractured, analysts predict security problems in the Arab country that could last for weeks or months.

The fighting and uncertainty have also affected the American economy.

This week, the price of a barrel of oil topped at $102. That's the highest level that oil has attained since the fall of 2008.

The average price for a gallon of regular unleaded gasoline is $3.42. That price is up 32 cents from last month and 72 cents from last year.

"Unrest in Libya has caused an increase in oil prices because of potential supply disruptions," said Liz Sonderse, investment strategist for Charles Schwab Corp. "It hits right to the consumer wallet and has a direct and immediate impact on confidence."

In states like California, where gas prices are highest, more people are using public transportation.

"Our ridership now is up 4.6 percent over a year ago," said Marc Littman, the spokesperson for the Calif. Metropolitan Transportation Authority.

However, not everyone can avoid paying more at the pump.

"It's too expensive," said Dayna Sheriff, a Compton, Calif. resident. "Four, almost $5. That's a lot of money. Especially when you don't have a job."

The extra expenses add up quickly.

"I still I have to get where I'm going, so I can't do anything about it," said Laura Personick, a Chicago, Ill., resident. "My credit card statement sees a difference."

Oil prices may also cause food prices to go higher. A United Nations food agency reported that global food prices reached new highs last month.

Some American businesses are already feeling the economic effects.

"Our costs has gone up 40 percent in the past two weeks -- from produce to meats," said George Athanasiou, of Georgio's Pizza. "Everything has gone up.

As the economy slowly improves, there are indications that businesses will start passing the cost increases on to their consumers, even though many Americans are still struggling to get by.

"I've even noticed there are a lot of smaller tips," Athanasiou said. "A lot of people are economically challenged as you would say."

The challenges will likely continue as long as turmoil persists in the world's oil rich nations. 

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