Oil
Prices And OPEC -
China Becomes The New Consumer. By Gabrielle Reilly
I wrote this article back in the 02/16/04
but feel it is important to rerun as oil prices hit new
highs as I expected after evaluating global strategies implemented
over the past year. This article presents the build up to
high oil prices and hopefully makes you VERY aware that
we should under no circumstances tap into our emergency
oil reserve unless it is an emergency.
As we head closer to the US Presidential elections,
a review of the global oil situation is in order. How is
OPEC manipulating the oil prices in an effort to oust President
Bush via the US economy? Included is a review of Saudi Arabia’s
and OPEC’s efforts to control oil pricing with countries
outside of OPEC. Of course a look into oil as the great
new terrorist target is essential to ensure a 1000-foot
view of our global oil situation. How is China impacting
the global petroleum market? It is important to understand
the impact of oil not from a point of view of either oil
good/oil bad, but why the impact of an oil shortage could
cause devastation to the global economy. Economies are dependent
on oil. A badeconomy means loss of employment, poverty,
and perhaps even starvation. As we hopefully implement policies
that will move us away from dependency on foreign energy
resources, we can simultaneously environmentally improve
energy consumption. This volatile decade may be the catalyst
that changes the way the world consumes energy in the decades
ahead of us.
China alone will, and is, reshaping the global oil relationships
in and of itself. This
year China has become the second largest user of oil outside of the
US surpassing Japan. This year China has become the second largest
user of oil outside of the U.S., surpassing Japan. As China’s
economy grows and technology improves, the Chinese are setting aside
their bikes for cars. Although it may still be two decades before
many of the peasants laboring in the manufacturing sectors become
consumers, with a population of well over 1 billion people, it would
only take a small percentage of the population to consume as much
as the U.S. does. Will this bring China into closer relations with
the Middle East in preference to the U.S.? Only time will give us
the sure answer to that question.
I am not sure why the headline news touts OPEC
Springs Surprise Oil Output Cut . If you review the global strategy
they have been implementing over the past year, it comes as no surprise.
In an article I wrote five months ago showing the buildup internationally
between Saudi Arabia negotiating with Russia and terrorist attacks
on oil supplies, you can get a glimpse of what they have been implementing:
“In the meantime Russia and Saudi Arabia
renew and sign a new oil agreement in an effort to regulate oil
prices.
The agreement coincidentally coincided with an agreementagreement
by Saudi Arabia to assist Russia with the “Muslim extremist”
state of Chechnya.
Putin had wanted the U.S. to recognize the “rebels”
as “terrorists” (and of course get assistance dealing
with the problem) for years. Cooperation with Saudi
Arabia would certainly be welcome. This is actually a big gift
for the Russians, considering much of the terrorist funding came
from Saudi Arabia. Well that is of course if the Saudis are not
just telling the Russians what they want to hear, which is the Saudis
favorite negotiation strategy.
What is concerning about this agreement between
Saudi Arabia and Russia on regulating oil prices is OPEC’s
simultaneous reduction in oil output to push prices up. OPEC can
manipulate prices momentarily before fiscal incentive is given to
start drilling elsewhere. Perhaps they can, and have incentive,
to control a price hike until right before the Presidential election.
If you consider Russia and Venezuela are the two largest oil suppliers
outside of OPEC, a price-regulating arrangement with Russia leaves
Venezuela, which is experiencing upheaval. Nigerian oil has been
sabotaged, as has Iraq’s, which does not leave as many immediate
solutions, although we do have the emergency supply that will only
be used in a genuine crisis. I suspect they are motivated to push
prices up to affect the U.S. economy leading up to the elections.
President Bush Sr. lost his re-election over what was perceived
as his focus on a foreign war (the Gulf War) rather than the economy
and jobs at home. It would be in the Middle East’s best interest
to affect our economy to oust Bush Jr. and replace him with someone
who is prepared to try and negotiate with a terrorist again. Life
must be all shook up on the terrorist front since Bush toppled their
regimes, cut off much of their money, and recruited assistance from
around the world on the war on terror.” For
full article
So the plan seems to have been developing well for OPEC. Hopefully,
this is where it ends without a large collision from terrorists that
could send the U.S. and global economies plummeting.
“However, after the attacks on the
World Trade Center and the Pentagon, symbols of U.S. economic and
military dominance, terrorist organizations of global reach like
al Qaeda have identified the world’s energy system as a major
vulnerability and a certain way to deliver a blow to America's oil-dependent
economy, as well as the global economy at large. With attacks against
transportation networks, military bases, and government installations
becoming more difficult to execute due to heightened security, terrorists
looking for a big bang might find oil, to quote al Qaeda, the "umbilical
cord and lifeline of the crusader community," the object of
the next major assault on the West, an assault that could wreak
havoc with America’s economy and way of life.”
This article is an essential
read..
“The list reads like an official registry
of Friends of Saddam across some 50 countries. It's clear where
his best, best friends were. There are 11 entries under France (totaling
150.8 million barrels of crude), 14 names under Syria (totaling
116.9 million barrels) and four pages detailing Russian recipients,
with voucher allocations of over one billion barrels. Many of the
names, transliterated phonetically from Arabic, are not well known
or are difficult to identify from the information given. Others
stand out. There's George Galloway, the Saddam-supporting British
MP recently expelled from the Labour Party, who has always denied
receiving any form of payment from Saddam. Other notables include
Indonesian President Megawati Sukarnoputri (also listed separately
as the "daughter of President Sukarno"), the PLO, the
Popular Front for the Liberation of Palestine, the Russian Orthodox
Church, the "director of the Russian President's office"
and former French Interior Minister Charles Pasqua. Some -- including
Mr. Pasqua, the Russian Church and Ms. Megawati -- have denied receiving
anything from Saddam. Patrick Maugein, a close friend of Jacques
Chirac and head of Soco International oil company, says his dealings
were all within "the framework of the oil-for-food program
and there was nothing illegal about it."“
The name that causes most concern on the list is a “Mr. Seven”
in Panama, which is the same name as the U.N. Assistant Secretary-General
Benon V. Sevan, the U.N. officer who Kofi Annan installed in1997 to
run the Oil for Food program.
Winston Churchill was certainly justified in his great hesitation
to convert his military from coal to oil. The efficiency and speed
gained by use of oil over coal against the worrisome prospect of being
dependent on a foreign, and often volatile, supply source has become
once again the great concern of this century. It is time for us to
agree politically and achieve real results. The ultimate target would
be reduction of energy consumption, cleaner consumption, and removal
of reliance on foreign oil supplies by utilizing our own resources.
These measures could ultimately assist towards a more stable world.
End.
ENTREPRENEURSHIP
The entrepreneur is essentially
a visualizer and actualizer...
He can visualize something,
and when he visualizes it
he sees exactly how to make it happen.
