With oil moving past $135 a barrel, several Asian countries have moved to rescind domestic subsidies meant to keep retail prices down. Taiwan, Malaysia, and Indonesia have each announced plans to cut back on increasingly expensive price controls, a move that may be mirrored soon by much larger economies. Oil analyst Peter Gastreich said, "it is probably more affordable for a country like China to subsidise than Indonesia. But if oil prices keep going up, it is simply not in any country's best interest." Beginning June 1 Taiwan will abolish diesel and gas subsidies, followed on July 1 by an increase in the country's electricity rates. Similar moves are in the works for Malaysia, while Indonesia plans to raise average oil prices by 28.7 percent. If the subsidy cuts move into larger economies like India, which imports 73 percent of its oil, unbalanced price increases occurring without complementary deregulation may send prices soaring as companies with squeezed margins seek to move costs along to consumers. Deregulation is unlikely, however, because most oil companies operating in Asia are state-owned. This leads us to another potentially damaging problem. Oil is priced in U.S. dollars, which haven't been doing to hot recently. The elimination of price controls combined with the slumping dollar may solidify what many already think is a growing inflationary cycle. That, in addition to Asian demand growth and some increasingly verbal concerns about declining production potential are most likely what's behind the surging oil price. This will not stop. And it will not be mitigating by domestic drilling. The Energy Information Administration released a report yesterday detailing the crude oil production potential of the Arctic National Wildlife Refuge. It doesn't look pretty. The EIA finds that ANWR production, if started today, will have no impact on global oil supplies until 2018. Under the mean resource recovery case, ANWR will peak at 780,000 barrels a day in 2027 - a pace it will maintain for three years - until production declines begin in 2030. Under this same scenario, the projected impact on global oil prices will be $0.75 at peak production, leading to an overall decrease in foreign oil expenditures of $202 billion between 2018 and 2030, or about $16.8 billion annually. That's about as much as we're going to spend in Iraq between now and the time you finish this sentence.