Are they really oil wars?

[Heimdallr]

A widely cited factor behind recent United States wars of choice is oil, opponents of the conflicts citing, conflictingly, both Washington's desire for cheap fuel and Big Oil's wish for high prices and profits. Even as speculators and the Peak Oil theory are thrown into the mix of explanations behind recent record prices, it is evident such views fall short of reality.

AsiaTimes >>> Are they really oil wars?

[Heimdallr]

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This article is not a short read, but it is a GOOD one...

It identifies not only the culprits of crude oil price escalation but also effectively eludes to how those same culprits are profiting from it in the New York and London futures markets and hedge funds...

In short, the world energy markets are being manipulated for excessive profits (an oil bubble) while at the same time advancing the agenda of militarist policies in the Middle East...

Probably as realistic an explanation of what's REALLY driving the escalation in energy prices you'll find in print, and you won't find it on CNN, NBC, ABC, CBS or Fox News...

I've included some exerts below for the available-time-deprived...

Contrary to the claims of the proponents of Peak Oil and champions of war and militarism, the current oil price shocks are a direct consequence of the destabilizing wars and geopolitical insecurity in the Middle East, not oil shortages. These include not only the wars in Iraq and Afghanistan, but also the threat of a looming war against Iran. The record of soaring oil prices shows that anytime there is a renewed US military threat against Iran, fuel prices move up several notches.

...US crude oil inventories are now higher than at any time in the previous eight years. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and high crude oil prices .... In fact, during this period global supplies have exceeded demand, according to the US Department of Energy.

The fact that the skyrocketing oil prices of late have been accompanied by a surplus in global oil markets was also brought to the attention of President George W Bush by Saudi officials when he asked them during a recent trip to the kingdom to increase production in order to stem the rising prices. Saudi officials reminded the president that "there is plenty of oil on the market. Iran has put some 30 million barrels of oil that it can't sell into floating storage. 'If we produced more oil, it wouldn't find buyers,' says the Saudi source. 'It wouldn't affect the price at all.'"

And why would producing more oil not "affect the price at all"? Because what is driving the soaring oil prices is not shortage but speculation: "with so much investment money sloshing around in the commodities markets, the Saudis calculate they have no hope of controlling short-term price fluctuations. They blame the recent price run-ups on speculation and fear of shortages [not real shortages], factors they say are beyond their control."

To the extent that competitive oil markets and/or prices are occasionally manipulated, such subversions of competitive market forces are often brought about not so much by OPEC or other oil producing countries as by manipulative speculations of financial giants in New York and London. Wall Street financial institutions have accomplished this feat through "innovative" financial instruments such as establishment of energy hedge funds and speculative oil futures markets in New York and London.

Producers' policy to sometimes curtail or limit the supply of oil, the so-called "limited flow" policy, is designed to raise the actual trading price above the market-determined price in order to keep high-cost US producers in business while leaving low-cost Middle East producers with an above average, or "super", profit. While for low-cost producers this limited flow policy is largely a matter of making more or fewer profits, for high-cost US producers it is a matter of survival, of being able to stay in or go out of business - an important but rarely mentioned or acknowledged fact.

In today's economic environment of giant corporations, many of the major industries try and often succeed in controlling supply in order to control price. Take, for example, the automobile industry. Theoretically, automobile producers could flood the market with a huge supply of cars. But that would not be good business as it would lower prices and profits. So, they control supply, just as do oil producers, in order to manipulate price.

OPEC members also know that inordinately high oil prices could precipitate economic recessions in oil importing countries that would, once again, lower demand for their oil.

Big Oil interests also know that not only is war no longer the way to gain access to oil - it is an obstacle to gaining that access. Exclusion of US oil companies from vast oil resources in countries such as Russia, Iran, Venezuela, and a number of central Asian countries due to militaristic US foreign policy is a clear testament to this fact. Many of these countries (including, yes, Iran) would be glad to have major US oil companies invest, explore and extract oil from their rich reserves. Needless to say, US oil companies would be delighted to have access to those oil resources. But US champions of war and militarism have successfully torpedoed such opportunities through their unilateral wars of aggression and their penchant for a Cold War-like international atmosphere.

During the past few decades, major oil companies have consistently opposed US policies and military threats against countries like Iran, Iraq, and Libya. They have, indeed, time and again, lobbied US foreign policy makers for the establishment of peaceful relations and diplomatic rapprochement with those countries. The Iran-Libya Sanction Act of 1996 (ILSA) is a strong testament to the fact that oil companies nowadays view wars, economic sanctions, and international political tensions as harmful to their long-term business interests and, accordingly, strive for peace, not war, in international relations.

It is no secret that the major force behind the Iran-Libya Sanction Act was the America Israel Public Affairs Committee (AIPAC), the main Zionist lobby in Washington. The success of AIPAC in passing ILSA through both the Congress and the White House over the opposition of the major US oil companies is testament to the fact that, in the context of US policy in the Middle East, even the influence of the oil industry pales vis-a-vis the influence of the Zionist lobby.

Alas, Washington's perverse, misguided and ineffectual policy of economic sanctions for political purposes - often in compliance with the wishes of some powerful special interests - continues unabated. "Even with the increased pro-trade lobbying efforts of the oil industry and groups like USAEngage, whose membership ranges from farmers and small business owners to Wall Street executives and oilmen, the lack of support from Washington and the Bush administration could not allow them [major oil companies and other non-military transnational companies] to overtake or counteract the already rolling momentum of AIPAC's influence on Middle East policy or the renewal of ISLA."

But the major reason for the persistence of this pervasive myth seems to stem from certain deliberate efforts that are designed to perpetuate the legend in order to camouflage some real economic and geopolitical special interests that drive US military adventures in the Middle East. There is evidence that both the military-industrial complex and hard-line Zionist proponents of "greater Israel" disingenuously use oil (as an issue of national interest) in order to disguise their own nefarious special interests and objectives: justification of continued expansion of military spending, extension of sales markets for military hardware, and recasting the geopolitical map of the Middle East in favor of Israel.

There is also evidence that for every dollar's worth of oil imported from the Persian Gulf region the Pentagon takes $5 out of the Federal budget to "secure" the flow of that oil. This is a clear indication that the claim that the US military presence in the Middle East is due to oil consideration is a fraud.