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Oil on Margin
Ever since the blackouts rolled through California in 2000, talk of energy crises have become almost de rigeur. Oil and natural gas prices in particular have been volatile. So to hear that Energy Secretary Spencer Abraham was summoned to the Capitol today comes as little if no surprise. Abraham refused to release oil from the Strategic Petroleum Reserve as an attempt to drives prices down. His motivation is subject to a high amount of interpretation.
Some have suggested, as does CNN, that President Bush will wait until war breaks out to release the SPR and cause a dramatic drop in spot market prices. Nevertheless, Abraham seemed convinced that the situation in Venezuela was resolving itself and that OPEC might seek to cut production if the SPR was tapped. While it’s an interesting concept, it would also cause a margin crash that would not far well for energy firms.
There is no doubt of course that war speculation has caused oil prices to rise, but the ultimate question will be just how comfortable will the US government be in allowing energy prices to stay high. Oil exporters like the currently high prices to protect unbalanced economies. Oil consumers like cheap products. However, the consumers in the US tend to be individuals, in the form of car owners. Producers in the US tend to be corporations who really would favor demand to meet supply. At this point, petroleum companies apparently have reason to be happy, but the amount of oil in reserve is growing. Could it be then that the firms just hope to use international problems to hide other concerns? Stay tuned.

posted by Thomas at 11:53 PM 0 comments

 

The Last Hajj

It appears that “Unpaid” has to apologize. You see, it seemed for the longest time that military maneuvers in Iraq had much more to do with Israeli expansionism under the Sharon regime than with “weapons of mass destruction”. But alas, this turns out to be at least partially not the case. A shocking NY Times article on Friday reveals that Saudi Arabia is very eager to have the US Army leave…once Iraq is no longer the home of Saddam Hussein. Sound confusing?
The House of Saud wants to have its cake and eat it too. The Saudi royal family is eager to have the US vacate its positions in the Kingdom, but it does not want them to leave until Saudi hegemony in the Arab world is assured. Iraq is the only nation (Iran too for that matter) that could challenge the royals for their righteous place in the Gulf. In a sense, Israeli hawks are likely to enjoy the idea of Iraq being eliminated as well, but the current system of Iraq, Saudi Arabia, and Iran being pitted against each other is attractive. With Iraq mollified, Iran could focus more on Hezbollah while the Saudis too could focus more on internal measures.
However, there is reason to think that an Iraqi invasion is exactly what the nefarious Al-Qaeda types want. As stated before, Saudi oil will become crucial during the period of reorganization after the invasion is successful. But furthermore, the use and extension of troops into the Fertile Crescent would stretch US forces to the limit. Bin Laden might simply order a coup in the Kingdom once American troops are busy fighting house to house in Baghdad. This would force Central Command to divert an attack south and into Saudi Arabia. Of course, this is exactly what bin Laden would dream of doing. Defend Islam’s holy ground from crusaders who would attempt to wipe him out. He would assume that act of Gentile troops marching into Mecca would incite the Arab world to expel the West once and for all. Militarily of course, the US would still likely complete the job and destroy Islamism once and for all.
But before one gets too excited about this option, remember that the world’s energy rubric is awfully dependant on these countries that would likely protest. Even though the US would win the battle, it could find itself in a permanent energy crisis with more moderate Arab countries refusing to pump oil out of the ground. Hypothetically of course, the current regimes in nations like Kuwait or Qatar would be forced to continue selling oil on the world market. Nevertheless, these regimes, if the Americans invade Saudi Arabia, might be overthrown and with most of the Arab’s world heaving masses not enjoying the benefit of petrodollars….
Also intriguing is that Al Qaeda continues to make chatter to believe that the target of their activities is somewhere in the United States. Yet it would appear that the next wave of attack is supposed to begin with “assassinations” which considering how cephalized succession lines are in the US seems a little overwrought. However, this could also apply to the royal family in Saudi Arabia and could be exactly how bin Laden seeks to lie with the truth. With the FBI and CIA hunting shadows, it would allow the murder of the princes to occur and set the stage for Al Qaeda’s endgame, and the last Hajj.

posted by Thomas at 2:57 AM 0 comments

 
Reagan’s Revenge


It turns out that “Unpaid” is being vindicated from all comers, and the most recent of this was Khidir Hamza, the original head of Iraq’s nuclear programme. Hamza appeared Friday on CNN’s Crossfire and stated blithely that Iraq began to develop WMD with the purpose of counterbalancing Israel’s nukes in the late 70’s. He also confirmed that a preemptive Israeli attack on an Iraqi facility in 1986 hardened Saddam’s stance. He supported an American military invasion. He said that Hussein wanted merely one bomb to use as an ultimate deterrent. All of this appeared to be in line with conventional Bush administration thinking.
What was shocking though, is what else Hamza said. He proceeded to say that the French were totally willing to help Iraq with the program all throughout the 80s in exchange for economic back-scratching. He also said that the whole point of building a nuclear weapon was to gain more leverage in a future negotiation. In other words, Hussein recognized that he would get a far better shake if he had a bomb of his own.
After seeing the response to nations like Pakistan and North Korea, it turns out that Hussein was marvelously prescient. Nevertheless, as an authoritarian dictator Hussein could save himself if only he patterned himself after someone like Pervez Musharraf. If Hussein had soft pedaled the Israelis instead of arming, he wouldn’t have his problem all together. He would get to survive as Hosni Mubarak and Anwar Sadat did for so many years. But for all the remorse Hussein might feel about the wrong course of action, President Bush might want to point the finger at the nonagenarian Ronald Reagan for not brokering an Iraq/Israeli nuclear resolution in the 80s when both countries were US allies.

posted by Thomas at 2:01 AM 0 comments

 
Black History Month Becomes History?

First and foremost, a little bragging is in order. Joe Klein in this week’s issue of Time confirms what “Unpaid” has been saying all along.

“…a stronger Israel is very much embedded in the rational for war with Iraq. It is a part of the argument that dare not speak its name, a fantasy quietly cherished by the neo-conservative faction in the Bush Administration and by many leaders of the American Jewish community…The maddening thing is, the outlines of a Middle East peace are obvious: Israelis abandon most of the settlements; Palestinians abandon the right of return.”

However, what is more interesting of note is the fact that perhaps the real loser in the Columbia tragedy is Black History Month? It does seem odd does it not that not less than two months after Trent Lott’s gaffe no one is banging the drums for more blacks in prominent positions? Could it be the high profile presence of Colin Powell in the news? Is this going to be the month that Black History is actually made with his stirring declaration to the UN Security Council? It is only worth nothing because in the face of Guttinger v. University of Michigan approaching the steps of the Supreme Court one would think that a special on Brown v. Board of Education might be waiting in the wings. But has Black History month become just that?

posted by Thomas at 10:49 PM 0 comments