Book Reviews | Gordon Campbell | News Flashes | Scoop Features | Scoop Video | Strange & Bizarre | Search

 


Blood In Beirut: $75.05 A Barrel

Blood In Beirut: $75.05 A Barrel


The failure to stop the bloodletting in the Middle East, Exxon's record second-quarter profits and Iran's nuclear cat-and-mouse game have something in common -- it's the oil.
By Greg Palast
July 26, 2006

I can't tell you how it started -- this is a war that's been fought since the Levites clashed with the Philistines -- but I can tell you why the current mayhem has not been stopped. It's the oil.

I'm not an expert on Palestine nor Lebanon and I'd rather not pretend to be one. If you want to know what's going on, read Robert Fisk. He lives there. He speaks Arabic. Stay away from pundits whose only connection to the Middle East is the local falafel stand.

So why am I writing now? The answer is that, while I don't speak Arabic or Hebrew, I am completely fluent in the language of petroleum.

What? You don't need a degree in geology to know there's no oil in Israel, Palestine or Lebanon. (A few weeks ago, I was joking around with Afif Safieh, the Palestinian Authority's Ambassador to the US, asking him why he was fighting to have a piece of the only place in the Middle East without oil. Well, there's no joking now.)

Let's begin with the facts we can agree on: the berserkers are winning. Crazies discredited only a month ago are now in charge, guys with guns bigger than brains and souls smaller still. Here's a list:

-- Israel's Prime Minister Ehud Olmert's approval rating in June was down to a Bush-level of 35%. But today, Olmert's poll numbers among Israeli voters have more than doubled to 78% as he does his bloody John Wayne "cleanin' out the varmints" routine. But let's not forget: Olmert can't pee-pee without George Bush's approval. Bush can stop Olmert tomorrow. He hasn't.

-- Hezbollah, a political party rejected overwhelmingly by Lebanese voters sickened by their support of Syrian occupation, holds a mere 14 seats out of 128 in the nation's parliament. Hezbollah was facing demands by both Lebanon's non-Shia majority and the United Nations to lay down arms. Now, few Lebanese would suggest taking away their rockets. But let's not forget: Without Iran, Hezbollah is just a fundamentalist street gang. Iran's President Mahmoud Ahmadinejad can stop Hezbollah's rockets tomorrow. He hasn't.

-- Hamas, just days before it kidnapped and killed Israeli soldiers, was facing certain political defeat at the hands of the Palestinian majority ready to accept the existence of Israel as proposed in a manifesto for peace talks penned by influential Palestinian prisoners. Now the Hamas rocket brigade is back in charge. But let's not forget: Hamas is broke and a joke without the loot and authority of Saudi Arabia. King Abdullah can stop these guys tomorrow. He hasn't.

Why not? Why haven't what we laughably call "leaders" of the USA, Iran and Saudi Arabia called back their delinquent spawn, cut off their allowances and grounded them for six months?

Maybe because mayhem and murder in the Middle East are very, very profitable to the sponsors of these characters with bombs and rockets. America, Iran and Saudi Arabia share one thing in common: they are run by oil regimes. The higher the price of crude, the higher the profits and the happier the presidents and princelings of these petroleum republics.

This Thursday, Exxon is expected to report the highest second-quarter earnings of any corporation since the days of the Pharaoh, $9.9 billion in pure profit collected in just three months -- courtesy of an oil shortage caused by pipelines on fire in Iraq, warlord attacks in Nigeria, the lingering effects of the sabotage of Venezuela's oil system by a 2002 strike... the list could go on.

Exxon's brobdingnagian profits simply reflect the cold axiom that oil companies and oil states don't make their loot by finding oil but by finding trouble. Finding oil increases supply. Increased supply means decreased price. Whereas finding trouble -- wars, coup d'etats, hurricanes, whatever can disrupt supply -- raises the price of oil.

A couple of examples from today's Bloomberg newswire are:

"Crude oil traded above $75 a barrel in New York as fighting between Israeli and Iranian-backed Hezbollah forces in Lebanon entered its 14th day... Oil prices rose last month on concern for supplies from Iran, the world's fourth largest producer, may be disrupted in its dispute with the United Nations over its uranium enrichment ... [And, said a trader,] 'I still think $85 is likely this summer. I'm really surprised we haven't seen any hurricanes.'''

In Tehran, President Ahmadinejad may or may not have a plan to make a nuclear bomb, but he sure as heck knows that hinting at it raises the price of the one thing he certainly does have -- oil. Every time he barks, 'Mad Mahmoud' knows that he's pumping up the price of crude. Just a $10 a barrel "blow-up-in-the-Mideast" premium brings his regime nearly a quarter of a billion dollars each week (including the little kick to the value of Iran's natural gas). Not a bad pay-off for making a bit of trouble.

Saudi Arabia's rake-in from The Troubles? Assuming just a $10 a barrel boost for Middle Eastern mayhem and you can calculate that the blood in the sand puts an extra $658 million a week in Abdullah's hand.

And in Houston, you can hear the cash registers jing-a-ling as explosions in Kirkuk, Beirut and the Niger River Delta sound like the sleigh-bells on Santa's sled. At $75.05 a barrel, they don't call it "sweet" crude for nothing. That's up 27% from a year ago. The big difference between then and now: the rockets' red glare.

Exxon's second-quarter profits may bust records, but next quarter's should put it to shame, as the "Lebanon premium"and Iraq's insurgency have puffed up prices, up by an average of 11% in the last three months.

So there's not much incentive for the guys who supply the weaponry to tell their wards to put away their murderous toys. This war's just too darn profitable.

We are trained to think of Middle Eastern conflicts as just modern flare-ups of ancient tribal animosities. But to uncover why the flames won't die, the usual rule applies: follow the money.

Am I saying that Tehran, Riyadh and Houston oil chieftains conspired to ignite a war to boost their petroleum profits? I can't imagine it. But I do wonder if Bush would let Olmert have an extra week of bombings, or if the potentates of the Persian Gulf would allow Hamas and Hezbollah to continue their deadly fireworks if it caused the price of crude to crash. You know and I know that if this war took a bite out of Exxon or the House of Saud, a ceasefire would be imposed quicker than you can say, "Let's drill in the Arctic."

Eventually, there will be another ceasefire. But Exxon shareholders need not worry. Global warming has heated the seas sufficiently to make certain that they can look forward to a hellacious -- and profitable -- season of hurricanes.

*************

Greg Palast is the author of the just-released New York Times bestseller, ARMED MADHOUSE: Who's Afraid of Osama Wolf?, China Floats Bush Sinks, the Scheme to Steal '08, No Child's Behind Left and other Dispatches from the Front Lines of the Class War. Go to www.GregPalast.com.

© Scoop Media

 
 
 
 
 
Top Scoops Headlines

 

Werewolf: Living With Rio’s Olympic Ruins

Mariana Cavalcanti Critics of the Olympic project can point a discernible pattern in the delivery of Olympics-related urban interventions: the belated but rushed inaugurations of faulty and/or unfinished infrastructures... More>>

Live Blog On Now: Open Source//Open Society Conference

The second annual Open Source Open Society Conference is a 2 day event taking place on 22-23 August 2016 at Michael Fowler Centre in Wellington… Scoop is hosting a live blog summarising the key points of this exciting conference. More>>

ALSO:

Buildup:

Gordon Campbell: On The Politicising Of The War On Drugs In Sport

It hasn’t been much fun at all to see how “war on drugs in sport” has become a proxy version of the Cold War, fixated on Russia. This weekend’s banning of the Russian long jumper Darya Klishina took that fixation to fresh extremes. More>>

ALSO:

Binoy Kampmark: Kevin Rudd’s Failed UN Secretary General Bid

Few sights are sadder in international diplomacy than seeing an aging figure desperate for honours. In a desperate effort to net them, he scurries around, cultivating, prodding, wishing to be noted. Finally, such an honour is netted, in all likelihood just to shut that overly keen individual up. More>>

Open Source / Open Society: The Scoop Foundation - An Open Model For NZ Media

Access to accurate, relevant and timely information is a crucial aspect of an open and transparent society. However, in our digital society information is in a state of flux with every aspect of its creation, delivery and consumption undergoing profound redefinition... More>>

Keeping Out The Vote: Gordon Campbell On The US Elections

I’ll focus here on just two ways that dis-enfranchisement is currently occurring in the US: (a) by the rigging of the boundary lines for voter districts and (b) by demanding elaborate photo IDs before people are allowed to cast their vote. More>>

Ramzy Baroud: Being Black Palestinian - Solidarity As A Welcome Pathology

It should come as no surprise that the loudest international solidarity that accompanied the continued spate of the killing of Black Americans comes from Palestine; that books have already been written and published by Palestinians about the plight of their Black brethren. In fact, that solidarity is mutual. More>>

ALSO:


Get More From Scoop

 
 
 
 
 
 
 
Top Scoops
Search Scoop  
 
 
Powered by Vodafone
NZ independent news