Ten specious fallacies on current world's high oil prices (Chinese View)

[Tom Yossarian Joad]

From The People's Daily with a poor translation:

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Fallacy No. 6: China a pusher behind

Well at ease in their "catching-up" strategies, developing countries will surely go panic and suffer payment losses. Take China for example, this round of price hike proved again that China has been zigzagging in its external energy path, an exponent of which is the extremely uncertain oil market now.

Five years ago, the international oil price skyrocketed when China bought in a large amount; three years ago, it dropped as China cut its import. One year ago, the Iraq war led to price premium, and later, the reasonable price expected was finally swallowed by the prodigious need in energy aroused by the world's reviving economy.

At that time, international oil giants targeted on China, an expanding economy seeking oil suppliers and preparing to build oil reserve bases. As a strategic buyer, China will mind the price. It is characteristic in the international oil price that the price of futures determines that of goods. China lacks necessary oil futures and market practice, therefore, as international oil speculators see it, has to be trapped in building up strategic reserve at a high price.

China is an absolute victim of high oil price. What it will profit from the uncertainties in the international oil market is lessons to be drawn on and independence to be achieved.

Fallacy No. 7: Russia's counts only on oil for resurgence

Russia benefits from global oil contention: the daily oil output in July jumped from 6 million to 9.3 million barrels, a record since the post-Soviet Union period. Russian President Putin is now reshaping the nation's oil industry, consolidating the government's control over it, which can be on a par with the top producer Saudi Arabia. Russia also intends to recreate its image as a weighty power on the international stage.

However, Russia needs to take care not to be wrong footed by the huge profit in its development. Obsession will lead to unworthy deformation.

Fallacy No. 8: US-led war was not for oil

The US-led war on Iraq was laughably interpreted as defending the Western freedom and democracy. However, it was for the oil there. Just like Dr. Kissinger once said, oil is too important to be left to the Arabians.

It is a long-term national policy of the United States to control the Middle East for the sake of the global dominance. The White House once discussed the feasibility of sending forces "to protect the oil countries in the Middle East" upon the oil crisis in 1974 and 1975. As "Iran Revolution" broke out in 1979, President Carter uttered in the State of the Union Address in January 1980, that any country intending to control the oil in the Middle East will be regarded as infringing upon the interest of the United States, who will take all measures, including force, to protect it. In 1990, Cheney, then Secretary of Defense, said, the root why Iraq was not allowed to swallow Kuwait, was that the 20 percent of the world's proven oil reserves were not hoped to be left to Saddam, who is hostile to the United States.

The US policy is based on an important assumption: the one who controls the oil in the Middle East grips the economic throat of the United States.
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[dweller]

1. "The US-led war on Iraq was laughably interpreted as defending the

Western freedom and democracy. However, it was for the oil there."

nope, that's a pretty accurate translation.

dp