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Re: [casi] Oil and War

Thanks for the very good article by Milan Rai.

List members may have seen corroborative evidence in the article in last
Sunday's Observer (UK) by Faisal Islam and Nick Paton Walsh titled "US buys
up Iraqi oil to stave off crisis -- Seizing reserves will be an allied
priority if forces go in"; sample paragraphs --

> But  the  prospect  of  British  and  US  commandos  claiming  key oil
> installations  around  Basra  by force has pushed global oil diplomacy
> into  overdrive.  International  oil  companies  have  been  jockeying
> position to secure concessions before 'regime change' ...

> The  US  economy will announce zero growth this week, prolonging three
> years  of  sluggish  performance.  Cheap  oil  would  boost an economy
> importing half of its daily consumption of 20m barrels.

> But a cheaper oil price could have been reached more easily by lifting
> sanctions  and  giving  the  US  oil  majors access to Iraq's untapped
> reserves.

> Instead,  war  stands to give control over the oil price to 'new Iraq'
> and  its  sponsors,  with  Saudi Arabia losing its capacity to control
> prices by altering productive capacity.

As Milan pointed out, ultra-cheap Middle East oil is not necessarily a good
thing for the US, and certainly not for domestic oil-production; but
"control over the oil price" through the 'new' Iraq would be very welcome to
the Rulers of the Universe.

It may just be worth adding that, if Milan's analysis is correct, it is no
surprise that oil-company executives are unenthusiastic about the war. As
someone said on the list recently, they prefer stability to upheaval. They
want to concentrate on their short-term goals and can't afford to entertain
long-term adventures aimed at securing future benefits (any capitalist
enterprise that neglected securing today's profits because it was
manoeuvring for profits a decade hence would soon be out of business).
However large sectors of the economy which on the face of it have little to
do with oil production also have a big interest in MidEast oil -- eg the
financial sectors who will be recycling the petrodollars.

So even though the Bush administration is richly peopled with oil-industry
nominees, they will probably see it as their job to make decisions that will
(in their view) benefit the system as a whole long term, -- even if those
decisions conflict with the short-term interest of oil corporations. (Of
course, now that a war may be imminent, the short-term interests of US oil
corporations also include getting to the head of the queue when the Iraq oil
concessions are re-organized after the conflict.)

But these are just my guesses. Someone who knows more about the economics
and diplomacy of oil could confirm or refute it for us.

Andrew Goreing

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