Revised with additions
Two short news report video clips from Al Jazeera and the Real News Network cast some light on why the price of oil is so high at the moment, and how it is affecting ordinary Saudis even in the world’s largest oil exporting country, as it is affecting ordinary people everywhere.
In short—and notwithstanding the basic demand outstripping readily available supply—it is speculators, not Saudis, who are tipping the price up according to what these news clips suggest.
Aside from market manipulation, other important factors that weigh in on the high price of oil include geopolitical tensions (in the main, belligerent Bushmert noises against Iran) and government taxes. (Video h/t: Informed Comment)
Who’s to blame for price of oil? (3 minutes)
Who profits from Gulf oil revenues? (2 minutes)
Just Added:
Ron Paul on Iran & Energy (C-SPAN 6/26) (6 minutes)
F. William Engdahl (‘Perhaps 60% of Today’s Oil Price Is Pure Speculation‘ 2 May 2008) writes that:
As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price. . . . Since the advent of oil futures trading and the two major London and New York oil futures contracts, control of oil prices has left OPEC and gone to Wall Street. It is a classic case of the ‘tail that wags the dog.’
OPEC President Chakib Khelil has himself cited the US dollar’s decline and political conflicts in his prediction that the price of oil will climb to US$170 a barrel before the end of the year:
“Oil prices are expected to reach US$170 as demand for fuel is growing in the US during the summer period and the US Dollar continues to weaken against the Euro.”
Political pressure on Iran and the depreciation of the US currency have caused a surge in oil prices, Khelil said.
In Why We’re Suddenly Paying Through the Nose for Gas, Michael Klare writes:
… But the Administration’s greatest contribution to the rising oil prices is its steady stream of threats to attack Iran if it does not back down on the nuclear issue. The Iranians have made it plain that they would retaliate by attempting to block the flow of Gulf oil and otherwise cause turmoil in the energy market. Most analysts assume, therefore, that an encounter will produce a global oil shortage and prices well over $200 per barrel. It is not surprising, then, that every threat by Bush/Cheney (or their counterparts in Israel) has triggered a sharp rise in prices. This is where speculators enter the picture. Believing that a US-Iranian clash is at least 50 percent likely, some investors are buying futures in oil at $140, $150 or more per barrel, thinking they’ll make a killing if there’s an attack and prices zoom over $200.
For a view that places geopolitical tension rather than speculation squarely in the centre, from Xymphora’s blog:
Turning up the tension has been an ongoing process. Every few months there is a new baseless rumor about an American-Israeli attack on Iran, an attack which the oil markets know would result in an Iranian response which would lead to (at least) $300-a-barrel oil. It is this tension which is ratcheting up the price, not oil shortages or speculation. The Old American Establishment isn’t behind this, as it will be massively damaged by the kind of world recession that higher oil prices are leading us to.
ADDENDUM
See Also:
Related posts:
A better analysis:
Are They Really Oil Wars?
by Ismael Hossein-zadeh
6/19/08
http://www.thepeoplesvoice.org/cgi-bin/blogs/voices.php/2008/06/19/p26302
BTW
Michael T. Klare is an alarmist and a shill. He utilises outright deception and lies in each and every article.
Hi Atheo,
Thanks for coming by and for the link, definitely one to bookmark. I’m intrigued especially by Hossein-zadeh’s stated skepticism about Peak Oil. I also have reservations about Klare and quote him qualifiedly. Appreciate your comment.
Ann
Ann,
I appreciate that your quote from Klare was limited to a sensible and supportable segment from his article.
By the way, Ismael’s article got republished at atimes.com and has since hit all the oil industry and financial publications in Asia. An internet search on the title gets over 7,000 results.
Ann,
nice one for putting up Ron Paul – speaking sense as he generally does.
The price rise is mainly caused by the drop in the dollar’s value, with the pressure of further drops pushing speculation. The dollar is devaluing because they’ve created trillions of ’em out of thin air, to pay for their foreign adventures, amongst other things.
So the increasing cost of imperial military misadventures is to blame for a large part of the oil price rise, in addition to speculation. We should be squarely blaming the western war criminals (the Anglo-American Israeli regime axis of terror), then. Well described, thanks for that.
I see you replaced Judean with Israeli in the new phrase “Anglo-American Judean regime axis of terror” following my previous (unpublished) comment. I’m still curious why you originally chose the word Judean (I’m not accusing you of anti-Semitism or Judeophobia – I’m just plane curious).
As I said before, USrael or Bushmert are much more catchy than Anglo-American Israeli axis of terror. It’s too long. Maybe you should use an acronym like AAIAT?
Yes I did replace it and I inserted a comment thanking you for prompting the clarification, in which I also inserted your comment. Unfortunately I was revising it in two windows and closed the tab in which I had done so when I revised the comment. I’ll reproduce it as best as I can:
Emmanuel has just written:
Simple slip of the tongue, no special reason. Its not even because that’s how some Israelis would wish to be seen. I’ve replaced it with Israeli.