Oil, the ultimate weapon 



Wonder why the price of oil is so low? Are we using that much less? In November oil imports fell about 7% and are off for the last quarter by about the same percentage. Could this be the reason for oil prices falling by nearly 75%

($147 to $38) over the last 4 months?

Cui Bono? That’s the question - it means who benefits and is asked when one is seeking a motive. Saudi and the Gulf States oil production remained high through December. Cuts are discussed and even approved but, so far, the world supply has stayed about the same. January future prices are equally low. No one seems to have any confidence that petroleum prices will increase dramatically in the near term.

So who does this hurt the most? Why don’t the big players really cut production? The answer to the first question is clearly Iran, Venezuela and Russia where the costs of production, due to antiquated infrastructure and other factors, are higher by far than Saudi Arabia and the Gulf States. The answer to the second question is a little more complicated and perhaps one has to have a somewhat devious mind to suss it out. Could it be that production remains high because the US Government somehow “influenced” the Saudis and other Arab producers?

Consider this; Russia has used about a third of their reserves trying vainly to prop up their failing economy. Iran is happily on the ropes, the Iranian government is increasingly unable to fund even basic services. They have little money to pay for terrorist activities and little Hugo in Venezuela is equally broke and not talking anymore about turning the Latin world into a soviet style arsenal against America.

 Is this “pay-back” time for Russia over their invasion of Georgia and increased expenditures on military expansion and adventures? Is this a way to break the back of the Iranian Government to force some kind of regime change?  Is this a way to shut the mouth of the despicable little Fidel wantabee in Caracas? The answer to these questions is a very quiet, “maybe!”

 When you consider “who benefits” the most from the inexplicable precipitous drop in oil prices the “maybe” becomes perhaps a little more definitive. America uses more oil than any other country and any reduction in cost has an immediate benefit to the US economy which today needs all the help it can get. But, there is another side to the issue of who is benefiting, who isn’t and why?

 The Arab Gulf States, Kuwait et al, owe their very existence to the US. We saved them from death at the hands of the idiot Sadism and are the only buffer between the nutty Iranians who are seeking regional domination. You can imagine that they would be most willing to help out if asked.

 Saudi Arabia is a feudal monarchy run by 7,000 princes protected by the United States. The death of King Fahd, and the accession to the throne of his 81-year-old half-brother Abdullah, provoked a lot of nonsense in the Western media about the possibility of democratic change and women's rights in Saudi. In fact, Abdullah has run the kingdom for the past decade as de facto monarch since Fahd was sidelined by a serious stroke.

 Though an absolute monarchy, decisions in Saudi are made by consensus. Simmering rivalries between various senior princes have now broken into the open. The powerful defense minister, Prince Sultan, became Crown Prince, but he's also 81. Princes Nayef (interior minister) and Salman (governor of Riyadh) are vying for the line of succession.

 Younger princes are jostling for second-tier power slots, notably Turki, the wily former head of Saudi intelligence, and Bandar, who just resigned as longtime ambassador to Washington. While personal, family and clan rivalries will roil Saudi Arabia over the coming months, major changes in political or oil policy seem unlikely. That is, unless the uprising against the royal family that has simmered for the past decade flares up.

 For the moment, made up of  al-Qaida, other Islamist nut-cases, democratic reformers, and anti-American nationalists, the Saudi underground resistance is fragmented and not terribly effective. However, they have terrified the ruling family. Osama bin Laden, a Saudi, declared war on the royal family, accusing it correctly, of corruption, greed and monstrous malfeasance- stooges of the U.S.

 The Bush administration knows that Saudi royal family, without our help, would not be able to hold the lid on an Islamist rebellion much longer. A military coup appears improbable since the army is denied ammunition and watched by a Bedouin tribal militia known as the White Army. The bottom line- U.S. armed forces are ready to protect the royal family.

 Several American Administrations have tried ( superficially)  to "promote democracy" in Saudi. The royal family relies for legitimacy on the ultra-conservative Wahhabi faith, a narrow-minded, totally irrational Islamic cult that views even other Muslims as infidels. A prime tenet of Wahhabism --much like medieval Catholicism or communism --is total loyalty to one's rulers. For the moment, the Saudi royals are safe, with the Wahabs on one side and the US infidel army on the other. As Shakespeare said in ‘The ‘Tempest,’ politics makes strange bedfellows.

 The Saudi royal family and many U.S. Republicans are joined at the hip. A  network of private business relationships tie the Bush family, Washington's powerful Carlyle Group, and the military-industrial complex to the Saudi royals.

 Princes Turki and Bandar are have cooperated with the CIA for decades. Turki was the liason between the Saudis and Osama bin Laden during the 1980s war in Afghanistan. Years ago the Saudis, at Washington's behest, fuelled Iraq's aggression against Iran during the same period, to the tune of $27.5 billion US, as well as Saddam Hussein's abortive nuclear program. Of course, in this effort it has to be remembered that the Saudis have no love for the Iranians whom they view as enemies and did not want to see them grown more powerful.

 Saudi's military buys advanced arms it can't use, but which keep US arms plants humming and American’s employed. Saudi bases also quietly serve the Pentagon's wars in Iraq and Afghanistan. There have been instances of Saudi money being funneled into Republican campaign coffers. So don't expect Washington to risk real change in Saudi. We'll see only window dressing, like empty elections and gushy U.S. prime-time TV about Saudi women finally learning to drive.

 This old deal will likely continue.The royals will keep selling oil cheap in exchange for U.S. protection.  But a note of caution. the last really respected Saudi ruler, wise King Faisal, who was assassinated in 1975, warned that the way the royals were squandering the nation's oil wealth, the next Saudi generation might be back riding camels.

 Whoa! Wait a minute. If the US can engineer lower oil prices, why did they allow the prices to hit the roof last year? Good question. Again, we have to use supposition and think like a ruthless global chess master. Could it be that we allowed prices to rise so dramatically only to “smoke” out our enemies, letting them have a little play to show their true colors - getting them ”hooked” on the big bucks, jacking up their spending habits only to make the fall all that more painful? Well, it’s a little far fetched but certainly possible.

 Of course, once their oil runs out or we don’t need it anymore, you can be certain that no one in America will give a damm about whether the Saudis or any Arabs ride camels or tie goats to their Rolls towing it down the vacant streets of Riyadh.

 Meanwhile, enjoy the suffering of the anti-American petro-states and, when you blow by the tree-huggers with their puny electric cars in your 12 cyl, 600 HP  Hummer, tell the attendant to “fill-er-up with hi- test” on your way to the big game.  

 Robert firth

Jan 2009

Boca Raton