Oil: Power Has Changed Sides

[marmar]

from Le Monde, via Truthout:




SUNDAY 25 MAY 2008
Oil: Power Has Changed Sides
Monday 19 May 2008

»
by: Jean-Michel Bezat, Le Monde



In the beginning of the 1970s, when a barrel of black gold cost less than $2, no one imagined that one day an American president would be reduced to begging the king of Saudi Arabia for an increase in the Organization of Petroleum Exporting Countries' (OPEC's) production to bring down prices. Yet the West has reached that point. After an initial rebuff in mid-January, George W. Bush was at it again on Friday, May 16, during his meeting with King Abdullah in Riyadh. With no more success than the first time, unless one counts a limited and temporary increase.

The time is long gone when Standard Oil of New Jersey, Anglo-Persian, Gulf Oil and their four other "sisters" dominated the world market. When President Roosevelt got King Ibn Saud to open Saudi wells to foreign companies in exchange for American military protection (1945). When Iranian Prime Minister Mossadegh - guilty of nationalizing hydrocarbons - could be overthrown with impunity (1953). When one could pretend to believe that oil is an inexhaustible cornucopia.

Market power has changed sides. It has slipped away from consuming countries and from Big Oil (Exxon, Chevron, Shell, BP ...). The development of the price per barrel ($128), is being determined behind the scenes in the Kremlin and in the meanders of the Iranian government, in Nigerian mangroves and on the banks of the Venezuelan Orinoco, in OPEC's Viennese corridors and in the halls of the New York Mercantile Exchange. And, above all, in Saudi palaces.

The world is experiencing a third oil shock - slower than those of 1973 and 1980. The barrel, the price of which has increased six times in as many years, is more expensive in constant dollars than it was in the beginning of 1981. Its price may ebb by some $10 or $20 in coming months, but nothing is less certain. Analysts as respected as those of investment bank Goldman Sachs see the price going to an average of $141 in the second half of 2008 and to $148 in 2009. OPEC no longer rules out $200. ......(more)

The complete piece is at: http://www.truthout.org/article/oil-power-has-changed-sides

[Bosso 63]

1. If only someone could have seen this coming.

:sarcasm:

[GOPBasher]

6. LOL! Yeah, why didn't anyone ever tell us that oil is finite? n/t

[bronxiteforever]

2. Kick & R

[yurbud]

3. that begging was pro forma, like ''round up the usual suspects'' in Casablanca

[bluesmail]

8. agreed, a 'show' for the people of Amerika

[robinlynne]

9. exactly. The article assumes that Bush really wanted an increase in oil production.

Isn't he spending our entire treasury and killing hundreds of thousands of Iraquis to make sure oil prices stay high?

[Baby Snooks]

12. Ah, but you see, "Amerika" has lots of oil...

What it comes down to with regard to the oil and gas industry in this country is that if you tell a lie enough times, you believe it along with everyone else.

Everyone knew what was coming and knew by the end of the 1950s and certainly knew by the end of the 1970s. But then Ronald Reagan arrived. With Georgie Porgie. If you look back at the history of this nation for the past 100 years, any time there has been a disaster in policy, there has been a Bush around somewhere. Usually stuffing their pockets.

My great-uncle served in the Eisenhower Administration in what became the Department of Energy and was one of the co-founders of Texas Eastern. Hubbert wasn't the only one who knew the reality of what was coming in this country. And then worldwide. I'm surprised we've made it this long without major price increases and shortages. But they are coming. What we're seeing now is nothing compared to what's coming.

But "Amerikans" will continue to deny the reality. They will blame the Democrats, the Arabs, the communists, and anyone else they can think of as they sit in line to pump their ration of $10 a gallon gasoline.

We have lots of oil. We just can't drill for it. And then they will start blaming the environmentalists as they begin to pump their $10 a gallon gasoline. And then they will rush to the grocery store to buy their ration of milk and bread and produce and maybe some meat if there is any. And then they will rush home before 4 pm when the temperature is expected to hit 125 degrees although of course it will cool off after the evening thunderstorm arrives with the super tornadoes. Dinner of course will be in the storm cellar. As it is every evening.

[unblock]

4. fortunately, if oil ever gets over $30/bbl, dubya will just jawbone the saudis

and make them open up their spigots!

oh, wait.....

[The River]

5. I Sure Hope Obama

makes a "Manhattan" style Green/Renewable Energy project
an immediate priority.

[leveymg]

7. What you pay at the pump has little to do with the spot market price for crude.

The Seven Sisters (actually, today, there are just four) still have a lock on refining and retailing. They buy crude in long-term contracts at a price set two or three years ago. Some of this, they sell on the NYMEX at spot market price to raise extra cash.

Buy low - sell high.

That's why they're making multi-billion dollar profits.

Oh, yes, the U.S. is still the world's third largest producer, 8.7 mbbl/day. Canada is our largest source of imports, and we could do without Saudi imports, altogether, if we had to. See below.

A strong Executive that wasn't in their pocket would have the oil company executives up against a wall with their pockets turned inside out.

Canada remained the largest exporter of total petroleum in March, exporting 2.303 million barrels per day to the United States, which is a decrease from last month (2.464 thousand barrels per day). The second largest exporter of total petroleum was Saudi Arabia with 1.542 million barrels per day.
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html


Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
Country Mar-08 Feb-08 YTD 2008 Mar-07 YTD 2007

--------------------------------------------------------------------------------

CANADA 1,727 1,920 1,863 1,780 1,825
SAUDI ARABIA 1,535 1,614 1,541 1,216 1,325
MEXICO 1,232 1,231 1,220 1,621 1,475
NIGERIA 1,138 982 1,097 1,290 1,156
VENEZUELA 858 945 980 1,036 1,033
IRAQ 773 780 697 523 464
ANGOLA 375 341 429 696 570
ALGERIA 232 191 264 501 484
ECUADOR 231 169 217 191 214
BRAZIL 188 169 175 209 174
KUWAIT 178 261 225 288 208
COLOMBIA 120 220 169 108 107
RUSSIA 108 80 68 193 92
CHAD 101 89 103 66 74
UNITED KINGDOM 95 60 80 77 90

[Arctic Dave]

11. Canada may be our largest supplier at the moment

but for how much longer? Once the Canadian public becomes completley fed up with the enviromental problems the oil sands projects are creating I would venture to say that their exports will have a fairly steep decline. After that we will be right back on SA door step with hat in hand begging for forgiveness like a unfaithful spouse.

[MasonJar]

10. I remember when the high oil prices were used to defeat Carter plus

the ignominious Iran secretive so-called agreement. I hope we can turn the tables on them this time; by November Americans will be desperate...except for Bush's alleged short term agreement.

[Baby Snooks]

13. The shadowy figure behind it all....

Bush was not only behind Iran-Contra but behind the movement to depose the Shah and course the hostage situation is what defeated Jimmy Carter in the end. Was it really just coincidence that the hostages were released the day Ronald Reagan was inaugurated? Of course not.

The Bushes are evil. As are those who have supported them along the way.

?

April 24, 2008

[cliss]

14. The balance of power has shifted ~

from the oil Consuming nations to the Oil Producing nations. They hold all the cards.
At this moment, there is a staggering transfer of wealth going on. There is a massive amount of money leaving the U.S. and going to OPEC and other countries.
I read somewhere in the area of $2.6 BILLION PER DAY. This is weakening our country, and making us more vulnerable.