Peoples Geography — Reclaiming space

Creating people's geographies

Who’s To Blame For The Price Of Oil? Speculators, not Saudis

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.


See Also:

Related posts:

7 comments on “Who’s To Blame For The Price Of Oil? Speculators, not Saudis

  1. atheo
    29 June, 2008

    A better analysis:

    Are They Really Oil Wars?
    by Ismael Hossein-zadeh

    Michael T. Klare is an alarmist and a shill. He utilises outright deception and lies in each and every article.

  2. peoplesgeography
    29 June, 2008

    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.


  3. atheo
    1 July, 2008


    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 and has since hit all the oil industry and financial publications in Asia. An internet search on the title gets over 7,000 results.

  4. Trooper Thompson
    3 July, 2008


    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.

  5. peoplesgeography
    3 July, 2008

    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.

  6. Emmanuel
    5 July, 2008

    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?

  7. peoplesgeography
    5 July, 2008

    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:

    I’m curious – why is it Anglo-American Judean and not Anglo-American Israeli or Zionist? Judean sounds connected to ancient Judea (if it were a reference to the religion it would be Jewish, not Judean), as if you suddenly accept the historical connection of the Jewish people to the land.

    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.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


This entry was posted on 28 June, 2008 by in Energy and Resources, News, Oil, Saudi Arabia, Video and tagged , , .

Timely Reminders

"Those who crusade, not for God in themselves, but against the devil in others, never succeed in making the world better, but leave it either as it was, or sometimes perceptibly worse than what it was, before the crusade began. By thinking primarily of evil we tend, however excellent our intentions, to create occasions for evil to manifest itself."
-- Aldous Huxley

"The only war that matters is the war against the imagination. All others are subsumed by it."
-- Diane DiPrima, "Rant", from Pieces of a Song.

"It is difficult
to get the news from poems
yet men die miserably every day
for lack
of what is found there"
-- William Carlos Williams, "Asphodel, That Greeny Flower"