portland independent media center  
images audio video
newswire article reposts united states

energy & nuclear | imperialism & war

War Drives the Price of Oil

Iraq's oil production has reached 15 percent of its pre-war capacity. Americans only represent 4.5% but consume over 25% of the global energy reserves. The US empire wants its debts, its balance of trade deficit and its wars paid by the rest of the world.
WAR DRIVES THE PRICE OF OIL

By Volker Brautigam

[This article published in: Ossietzky, 5/9/2008 is translated from the German on the World Wide Web,  http://www.linksnet.de/artikel.php?id=3644.]


Crude oil cost $118 a barrel (159 liters) on April 22, 2008. Soon it will be $150. Market experts even consider $200 possible - if the dollar-based worldwide financial system doesn't collapse as the current Global Europe Forecast Bulletin already predicted for the end of 2008. George Soros who became a multi-billionaire through financial speculations told the Bloomberg television network he expects an inexorable fall of the dollar and US government bonds because the US has definitively lost its leadership role in the world economy.

That heating oil and gasoline are still affordable in Germany is due to the purchasing power of the euro. However petroleum was more expensive even calculated in euros. Its price rose almost five-fold since 2002. Market researchers offer many explanations: the war of the US against oil-rich Iraq, the conflict with Iran, the country with the third-largest oil reserves, the political conditions of the oil countries Venezuela and Nigeria described as "unstable," the enormously higher demand of the growth nations China and India (China achieve3d a growth of 11.9 percent in 2007 with a gross domestic product of 2.3 trillion euro), the profit mania of oil multinationals, stock market speculation and the flight from the dollar into oil, gold and other valuable raw materials.

While all this influences the price of oil, it does not explain its extreme rates of increase. Iraqi's oil production has reached 15 percent of its pre-ear capacity. On the other hand, Iran like all members of the Organization of Oil Exporting Countries (OPEC) has always raised its production according to demand and recently increased its export share so drastically that gasoline became scarce on its domestic market. Venezuela with a planned socialist economy will not increase its oil production. Plundered Nigeria is not in a position to step up production. Sufficient oil is on the market; an immediate shortage is impossible.

The industrial nations need less petroleum than in the past. They use more gas. Energy-savings for cost- and environmental protection reasons reduces the oil demand to almost the same extent as the use of renewable energy increased. When the US enters its recession, produces less and thus consumes less energy, this will affect the global energy balance. US-Americans only represent 4.5 percent but consume over 25 percent of global energy reserves.

Are oil multinationals forcing up the price of crude oil? No more than in the past. They already realize record profits. In 2007, Exxon-Mobil (US) raked in $40.6 billion and Shell (Netherlands) $31 billion. These enormous profits will not be reinvested in the oil industry. State-owned oil companies have more market power because they can increase prospecting in oil fields. For example, the state Petrobras together with Exxon, British Gas and Repsol discovered reserves in the last years on Brazil's Atlantic coast that could surpass Venezuela's reserves. The government in Sao Paolo has bought up the shares of US firms in its domestic market.

The speculation on the oil exchanges in New York and London also does not adequately explain the price development. For years the trade there has reacted more to the changes on the currency markets than to the relation of oil supply and oil demand. Stock brokers expect the value of the dollar to drop by the end of 2008 to 1.75:1 against the euro.

The US Empire tries to make the rest of the world pay for its debts, its balance of trade deficit and its wars by enlarging the dollar supply but with decreasing success. Crude oil is still notated in US dollars but oil producers react with markups to the increased dollar supply and the declining value of the dollar. Thus the imminent financial crisis is one of the price-drivers.

Another price-driver hardly considered up to now has an English name Peak Oil. It describes the peal when half the oil reserves of the earth have already been produced and consumed. Peak oil, it seems, will soon be behind us. Discoveries of massive new oil fields are considered impossible.

Many known and most presumed oil deposits can only be exploited with great difficulty and at staggering cost, as when they are a mile below sea level for example. Oil production out of oil sand and oil shale of the rich deposits of Canada and the northern US is also technically and ecologically very problematic and uneconomical at today's prices.

While there is still enough oil, it will soon be a scarce commodity. With this perspective, the market actors structure the oil price. Experts like Swiss geologist Walter Ziegler even hope that the economically inexpensive oil reserves will be consumed in 30 years because the world climate by then may not be irreversibly damaged. But they warn at the same time: What helps the climate brings catastrophic wars to humanity.

Fears of war drive the price of oil. George W. Bush, the most wicked warlord of our time, has restocked Washington's strategic oil reserve since the beginning of 2008. In February 2008, 96.2 percent was reached. The limit of the US capacity is a billion barrels. In the meantime, this quantity may have been stashed away. Bulk purchases alone did not drive the price but the developing aggressiveness. Since January 2008, the US has also massed troops around Iran, the next oil-Dorado after Iraq. The war over the remaining world's oil has begun. This war drives the price.

homepage: homepage: http://www.mbtranslations.com
address: address: http://www.informationclearinghouse.info


No shit, Sherlock? 13.Jun.2008 08:26

.......

Why do you think they want to stir it up in Iran?

Petrol is eight bucks a gallon in Europe. They want to get that from the US too, while supplies last and there are people alive to buy it.