To those familiar with the ways of the cartel systematically raising crude oil prices to unbearable levels since 2002, the closure by Chevron of its onshore production facilities in Nigeria immediately after last week'sstatesmanlike gesture of Saudi Arabia to boost its daily oil production by 500,000 barrels came as no surprise. Had Chevron not acted in the outrageous manner that it did, oil prices may have begun to fall, thus affecting the trillion-dollar profits of the western oil majors. Because Nigeria is in effect a dependency of the oil giants functioning within the country, the government in Lagos has remained silent in the face of such a brazen action. It has also ignored the funding given to assorted groups of thugs and so-called ?rebels? by NGOs and individuals in western countries. The suspicion of responsible nationalist elements in Nigeria is that it is the western oil companies themselves that are ensuring the flow of funds to these groups, so as to garner an excuse for curtailing production from the Nigerian basin. Had the government in Lagos been free of control by western oil interests, it would have warned Chevron to resume production at the risk of expropriation, the way Russia has disciplined the western oil majors since Vladimir Putin took charge from Boris Yeltsin in 1999. Till then, Russia was what Nigeria is now, an economic colony of external interests.
Since they saw their opportunity with the coming to office of George W. Bush and Dick Cheney in 2001, some western oil companies have?in effect?been fuelling by their actions the greed of speculators in New York and London, who since 2004 have been making billions of dollars in profit by trading in oil futures. That US, UK and other troops are in missions designed to protect their interests, that US, UK and other citizens are at heightened risk of terrorism because of the effect of the occupation, or that the very future of the international economy is at risk by their selfish?even criminal activities?is of little concern to a cartel of speculators confident that in George W. Bush and Dick Cheney, they have friends in the top two positions in the US.
This columnist regards John McCain as a brilliant and courageous individual, blessed with his wife Cindy, a lady idealistic enough to adopt a helpless girl from Bangladesh who would otherwise have faced death. It is therefore sad to see the same war hero and fighter against privilege playing the same tune as Bush and Cheney, a song that can spell the end of four decades of the march of humanity towards international prosperity. Fortunately for the people of the US, Democratic presidential candidate Barack Obama has been blunt in warning that it is indeed the oil speculators who are responsible for the otherwise irrational price boosts witnessed since the invasion of Iraq five years ago. Small wonder that the anti-humanity commercial interests responsible for high oil prices are doing all they can to ensure that he is discredited and defeated on November 4 by John McCain, a candidate whom they regard as following the policies of Bush-Cheney, though the grievous harm such policies inflict on both their own people as well as internationally.
The rulers of Saudi Arabia know the international oil market well, and despite their closeness to the Bush family, they have been similarly honest in admitting that it is speculation that is driving up the international price of oil. Strangely, almost the entire opinion-building community in the US is in denial on this matter, repeating the false claim that ?market forces? are to blame for the rise in price from $22 just before the 2003 invasion of Iraq to $135 at present. If we are to believe Bush-Cheney and their friends elsewhere, it is the rise in demand from China and India that is responsible for this sixfold rise in prices. Has demand in these two giants been rising any faster than during the earlier period, when oil prices were stable? Admirers of the Churchill mindset (that regards only the peoples of European origin as complete human beings and the rest as inferior) are uneasy at the way in which China and India have been making economic strides, and apparently regard a higher price of oil as the means by which these two economies can be slowed down to the low annual growth rates of the US and the EU. However, in seeking to (1) link India with China and (2) hobble growth in both countries, these individuals are risking the collapse of the entire world economy.
On September 11, 2005, in these columns, the forecast was made that the price of oil would cross $100 and reach $150 a barrel. That forecast is just $15 a barrel away from coming true. Sadly, the policies being followed by those acting on behalf of the oil speculators are custom-designed to boost oil prices, with the result that oil prices may soon reach $300 a barrel, a figure that would destroy the international economy. By already pricing their product way beyond the capacity to pay of the international economy, western oil companies are killing the goose that has been laying golden eggs for them for the past century. However, as Chevron'sunconscionable action last week of arbitrarily stopping production in Nigeria has demonstrated, they do not care. Today, the western oil giants stand in opposition to the future progress of humanity. Interestingly, these days the international media play up each minor incident of disruption in oil supply, in order to create an image of chaos and scarcity that is helpful to their objective of a relentless upward climb of prices.
For reasons best known to them, US President George W. Bush and Vice-President Dick Cheney have since 2002 implemented a policy that has the effect of pushing up oil prices much beyond any increase dictated by market fundamentals. Had the market ruled rather than geopolitical chicanery, today'soil price would be $45 a barrel rather than $135. The additional cost is the result of speculative activity triggered by groups confident that the ruinous Bush-Cheney policies will continue. But what are these policies?
The first was the US-UK takeover of Iraq. The control that this pair exercises on that country was made clear a week ago. Although Indian, Chinese and Russian companies had made far higher bids, the hapless government of Prime Minister Nuri al-Maliki was ?persuaded? to award no-bid contracts to six western oil companies. No bid? No competition allowed? What has happened to the US-EU talk of ?free trade? and ?competitive markets?? It has gone the way of the huge farm subsidies that they give to a tiny handful of their own producers, and the non-tariff ways by which they block access to their markets. These days, the EU is busily engaged in seeking to impose ?carbon emission standards? on the big economies of Asia so as to ensure that their own industries get protected from Asian competition, even though this means higher prices paid by their own people. In the case of oil, exactly as they have secured a monopoly in the Kurdish region of Iraq (in defiance of law and Iraq'snational interest), these companies seek to gain permanent ownership of the immense oil resources of Iraq. Watching the way in which they are blatantly leveraging the presence of US and EU troops to secure concessions, it is clear that the Age of Colonialism has returned, for now in Iraq. But such selfish policies will finally harm their own countries. For who can forget that it was the US oil giant Unocal?through paid consultants such as Zalmay Khalilzad (now US envoy to the UN) and Clinton-era diplomats such as Assistant Secretary of State Robin Raphel?that helped the Taliban take over power in Afghanistan? Once a full accounting of Clinton's1994-96 is given, the shameless way in which the US government subordinated its foreign and security policies towards Afghanistan to serve an oil giant will become clear. What was deemed good for Unocal (the coming to power of the Taliban) was regarded as being good for the entire US, just as what is good for the western oil majors is regarded by the occupiers as being good for the innocent people of the US and the EU.
In Iraq, soon after their 2003 victory over the pathetic conventional forces of the late Saddam Hussein, sane voices within the Pentagon sought a swift transfer of authority into Iraqi hands. Unseen ?deciders? blocked this plan, as they wanted to ensure that control remained in US and UK hands for long enough to take control of Iraq'soil assets. Although they had ostensibly come as ?liberators?, the US-UK forces ensured that control over Iraq would remain in the hands of Washington and London, abetted by a complacent UN Security Council. Thus it was that within weeks of the occupation, Paul Bremer imposed a colonial regime on the people of that land, a country with a civilisation contemporaneous with that of the Indus Valley. Since then, the main thrust of the Bush administration has been the securing of a western monopoly over Iraqi oil. Till then, they are clearly unwilling to countenance a substantial increase in oil production. Tellingly?and shamelessly?oil production in Iraq was till five months ago actually lower than it was during the sanction-ridden Saddam period. A small rise has taken place, masterminded by the nationalist Oil Minister Sharistani, who is seeking to protect his country'srights over rapacious western oil majors. However, he has been forced to cede ground repeatedly, and the consequence has been the subordination of the industry to western oil interests. Is the UN worried about such re-colonisation of Iraq? Apparently not. Is Prime Minister of India Manmohan Singh concerned? After all, he belongs to a political party that claims to be anti-colonial. Surprisingly, not at all, so busy is he and ?Madam? Sonia Gandhi singing the praises of George W. Bush, Conqueror of Iraq, Defender of Oil.
The people of the US are open-minded and?as is clear from the Obama phenomenon?mostly free of the prejudices still exist in Europe. They deserve better than their present leaders. The anger now upwelling in Iraq at the colonial actions of western oil companies has the potential to convert the country into a second Afghanistan, a factory for the nurturing of an anti-western jihad. As during the period when US policy nurtured the Taliban, the present is seeing a dangerous disconnect between the greed of western oil giants and the security of the western people. In Iraq, because of the occupation, an insurgency has raged. This, combined with the continued neglect of the oil infrastructure, has helped the speculators who are the cause of the unbearable rise in oil prices since 2003.
A year before the takeover of Iraq, in 2002, a mysterious coup attempt was launched against the democratically-elected President of Venezuela, Hugo Chavez. In the same way as strikes were fomented against Salvador Allende in Chile in 1970-73, during 2002 and 2003, a vigorous undemocratic campaign to Chavez out of office was launched, that was overcome at great social and economic cost. Since then, there has been a steady and covert squeeze on Venezuela'soil industry, with spares becoming harder to obtain and maintenance work made difficult by the non-cooperation of western oil companies. Had the US-EU policy been to encourage oil production in Venezuela rather than to oust Chavez and choke oil output, international crude oil prices would have at most been $ 45, rather than get pushed up by so much more, almost by $100. That lower oil prices would have benefitted the populations of both the US and the EU was clearly not judged important enough to warrant a policy change. The attempted coup, and the open hostility of some western governments to his continuance in office has made Chavez adopt a counter-productive policy of seeking to convert his country into another Castroite Cuba. Thanks to the economic incompetence of Fidel Castro, Cuba remains poverty-stricken, and this is where Venezuela is headed under Chavez.
And thus, oil production in Iraq has remained low, while the industry is slowly being strangled out of existence in Venezuela by denial of technology. A similar process is at work in Iran, a country that can produce 40 per cent more oil if given access to the most modern technologies. Fortunately for the speculators who are driving up prices to a level that will destroy the international economy, Iranian President Mahmoud Ahmedinejad is even more self-destructive than Hugo Chavez. His rantings against Israel are giving the speculators the public justification they need to ensure that the oil industry in Iran slowly chokes itself to death, Venezuela-style. During the coming months, what can be expected is either a military strike on Iran or fresh UN sanctions that would prevent Indian, Chinese and Russian oil companies from developing Iran'soil resources, the way they were barred in Iraq during the period of sanctions (1991-2003). Either way, oil prices would continue to climb.
Were President Ahmedinejad interested in the well-being of his people, rather than merely posturize, he would take steps to address the fact that his huge country generates less than 1 per cent of 1 per cent of significant inventions as a much smaller Israel does. That single country accounts for ten times as many patents as the rest of the region put together, including Egypt. Incidentally, Israel turns out ten times as many books each year as Egypt does. It will be remembered that Egyptian and Persian civilisation dates back as far as the Jewish civilisation does, and yet these days, it is only within Israel that modern knowledge flourishes. Egypt and Iran are intellectual deserts, ruined by a polity that places a premium on unthinking obedience to authority rather than initiative. By his empty rhetoric, Ahmedinejad has given ammunition to oil speculators intent on either a military strike against Iran or sanctions that would choke the country'soil industry. He is therefore tailor-made for the speculators, as is Chavez.
The next target of the speculators would be Russia, except that this major oil producer has no option but to rely on the European Union as its market. Were Moscow to team up with New Delhi and Beijing to build a fleet of oil tankers that could carry Russian oil to India and China, the oil speculators would ensure that their political friends in Washington and elsewhere discover some pretext for beginning a regime of crippling sanctions on Russia. Let it not be forgotten that since 1974, the world'sbiggest democracy, India, has been the victim of technology sanctions designed to cripple the country. Even in 2006, the infamous Hyde Act passed by the US Congress sought to constrain India in ways that would preclude energy independence. Sadly, Manmohan Singh and Sonia Gandhi have sought to barter away this freedom, for considerations that are opaque.
Once the new government comes into office after the 2009 elections, what the next Prime Minister needs to ensure is that (1) the thorium programme is given enough funds to speed up substantially (2) domestic uranium is mined at an accelerated pace and foreign sources such as Niger are tapped (3) re-processing takes place of all spent fuel, such as that from Tarapur. In case the IAEA and the NSG refuse to give India acceptable terms for resuming international nuclear trade, a programme of nuclear testing needs to be implemented, so that weapons systems get perfected. In the words of Rupert Murdoch to Paul Evans, ?If you treat me as an outsider, I will behave like one.? As for the US, a fresh agreement needs to be worked out with Washington, a capital that needs to be reminded that India is not an occupied country such as Iraq or Afghanistan, even though Sonia Gandhi and Manmohan Singh behave as though it were. A US-India partnership is essential for both countries, but this needs to be based on a formula that is equitable.
The anti-humanity activities of the oil speculators, who have been taking in billions of dollars in profit since 2003, need to be exposed and countered, including by the people of the US and the EU. The population in both is suffering at the expense of the greedy few who have placed their own financial gain above the future of the world. The government in Iraq needs to come out of the grip of the oil lobby, so that production can be increased substantially and on terms that do justice to the Iraqi people. Chavez needs to be countered by diplomacy with the objective of ensuring that Venezuelan oil production expands, while the suspense over Iran needs to be ended, so that a period of stable increases in production commences. Russia needs to develop ways of entering the Chinese and Indian market. The oil speculators believe that they are still in the era of Churchill, and that they can continue to push oil prices higher and higher, despite the malefic effect of such increases on human progress and prosperity. Ordinary people everywhere?in Europe, in the US, in Asia, elsewhere?need to ensure that they are proved to be wrong. The ?Oil Fever? raging since 2003 needs to end before the Bush term does on January 20, 2009.
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