EU-DIGEST

Myth - That Offshore Drilling Would Lower Gas Prices Gets Boost from Major Media

The media has played a significant role in convincing Americans that offshore drilling for oil in the United States could significantly lower the price of gasoline, according to an analysis released today by the Center for Economic and Policy Research. Even though the U.S. Department of Energy’s Energy Information Agency has stated that the benefits from such drilling would be too small to have any significant effect on oil prices, the media has overwhelmingly conveyed the impression that it could. Media coverage of the issue may have influenced public opinion, with a majority now favoring expanded drilling, as proposed by presidential candidate John McCain.

Labels: offshore drilling, Oil

Can Russia Block Georgian Energy Sales? - by Steve Levine

Washington has spent more than a decade of diplomacy and arm-twisting to erect what it calls an East-West Energy Corridor connecting the countries of the Caspian Sea with NATO ally Turkey. The result has been a network of oil and natural gas pipelines, ports, and tankers that can feed a million barrels a day to the world market. Washington has sought to expand and link that network directly to Europe, where Russia is currently the dominant supplier. But Russia's vigorous assault on Georgia—a key stretch of the energy route—has made the strategy seem less reliable, analysts say. Black Sea oil tankers that normally would be filling up with Baku crude, for example, were reported on Aug. 11 to be anchoring 15 miles offshore from the Georgian port of Batumi, where there was a rumor of a bombing by Russia.

Washington has spent more than a decade of diplomacy and arm-twisting to erect what it calls an East-West Energy Corridor connecting the countries of the Caspian Sea with NATO ally Turkey. The result has been a network of oil and natural gas pipelines, ports, and tankers that can feed a million barrels a day to the world market. Washington has sought to expand and link that network directly to Europe, where Russia is currently the dominant supplier. But Russia's vigorous assault on Georgia—a key stretch of the energy route—has made the strategy seem less reliable, analysts say. Black Sea oil tankers that normally would be filling up with Baku crude, for example, were reported on Aug. 11 to be anchoring 15 miles offshore from the Georgian port of Batumi, where there was a rumor of a bombing by Russia.

All the current lines will continue to operate. Russia won't interfere with them directly, analysts say. Its larger economic-political strategy of cementing its dominance of Europe's energy supply depends on not spooking the Europeans, who could then be encouraged to back the construction of more non-Russian energy pipelines, and thus dilute Russian power. But an expansion of Western influence—proposed trans-Caspian oil and natural gas lines from Turkmenistan or Kazakhstan, and a proposed natural gas line from Turkmenistan to Europe called Nabucco—may now be effectively dead. No Caspian President would gamble his survival by embracing such a project, analysts say. NOTE EU-Digest: This might finally get the EU to develop a single EU energy strategy whereby they can be on equal footing with the Russians when dealing on the issue of energy and eliminate the US influence in this area..

Labels: EU, Georgia, Oil, Russia

EU-Digest Special Report - Russia, Georgia and US: "The infernal logic of mutual escalation"

The blogosphere has been buzzing with comments about the escalating conflict between Georgia and Russia. Based on these circulating reports the following picture seems to emerge.

It is clear now that Georgia 'invaded' South Ossetia first to reclaim what they consider to be their territory. According to Reuters - they have also attacked Ossetian separatists with jets and troops. Also pretty certain now is that the pro-US Georgian leadership, which has ambitions to join NATO, had some sort of assent from Washington before it invaded South Ossetia. Georgia's accession to NATO would commit other NATO countries to defend Georgia's borders, even as independence movements in South Ossetia, Abkhazia - both of which have declared themselves separate from Georgia - and Ajaria take off.

The bottom-line seems to be that the escalation of violence in the area has also become a battle between Washington and Moscow over political control of the oil and gas rich Central Asian territories. It is clear to most observers that the US Administration used the opportunity supplied by 9/11 to position military bases across the region, encircling Russia's southern flank with their own "iron curtain" thereby giving the US crucial military leverage against potentially hostile popular movements.

In respect to Georgia, the Bush administration has always supported the so-called "rose revolution" of the pro-US Mikhail Saakashvili. The US National Endowment for Democracy was heavily involved in Mikheil Saakashvili's political campaign for the Presidency, while at the same time the US State Department halved aid to the country before the elections, in order to apply financial pressure to Saakashvili's oponent. Unfortunately, like the other color-coded 'revolutions', the Georgian one also represented a superficial change in leadership with a new global orientation towards Washington, not a substantial change in the society. In the meantime Saakashvili popularity dropped from an astonishing 94% in the autumn of 2003 to 23% two years later. Washington has consequently repeatedly bailed out the floundering "rose" leadership with aid, and grants, purportedly rewarding it for what they called 'democratic' reforms. These so called democratic reforms including Georgia sending troops to Iraq and allowing US forces to be stationed on their territory and train their military. In 2006 alone former Soviet states have received $565 million in aid programs courtesy of the US Senate, to protect them from "authoritarian Russia". Obviously given the pro-independence separatists trends in Georgia, which benefit the policies of the Putin-Medvedev government, the US is eager to stop this deteriorating situation.

Observers also have concluded that Russia is really not doing anything surprising here: its control of gas and oil in the region is one of its few strengths, and it is exploiting it in the same way the Pentagon does with their military strength. Russia's other strength has been its nuclear arsenal, which it has firmly tucked in its back pocket as a deterrent to other nuclear powers.

As to the conflict with Georgia, Russia can look at the US and refer to Kosovo, where the roles were reversed. South Ossetia has held independence referendums in 1991 and 2006 with no consequences on the ground in either case. Kosovo too did hold a referendum in 1992 without diminishing the apartheid-like Serbian power on the ground. On the other hand, internationally coordinated and recognized independence of Kosovo in February 2008 came through no referendum but by Nato Force. This clearly shows that what people on the ground wish for does not by itself make much of a difference at the end of the day. A factual difference between the two situations are the small population of South Ossetia with 70,000 people versus that of Kosovo with over 2 million.

Russia also knows and fears that the US government's policy seem to be focused on 'neutralizing' Russia's nuclear advantage in the region by aiming to develop a 'missile defense' system around the latter's perimeter, Russia consequently is working aggressively to escalate itsown weapons systems (which are still dwarfed in comparison to the American systems), intimidate rivals, and build up local support - forging new relations with Turkmenistan for example, with a new pipeline to import gas from this country, thus increasing its hold on supplies of energy to Europe.

As it stands now Washington could easily escalate the situation. Looking further into the future one can also see a potential new Brzezinski-advised Obama Administration focussing far more intently on shoring up US power in Central Asia than continuing to fight the costly Iraq insurgency. Present and future US Administrations, in pursuing a "new Cold War strategy", will continue to introduce an infernal logic of mutual escalation, so that even if this present Georgian crisis simmers down, a new one is bound to emerge somewhere soon. The much-vaunted new world order is increasingly resembling the old one, but with more nuclear weapons and less stability for the world.

The position of the EU in all this is negligible. Probably the only positive action some of its members took was to force a delay by the NATO to accept Georgia as a member. Unfortunately, by their own choice, and lack of long term vision by many of its leaders, the EU has no physical force or "spine" to back-up whatever they might decide. Unfortunately this weakness also means that most of the time the Europeans are relegated to follow policies established by Washington, which so far has had more negatives than positives for Europe.

Labels: EU, Georgia, New World Order, Oil, Russia, US

US has political, economic stake in far-flung spat

There's more than meets the eye to the frantic U.S. efforts Friday to talk Russia and U.S. ally Georgia out of war over an obscure mountain tract most Americans have never heard of. A look at the map and your gas credit card bill shows why.The pipeline that crosses Georgia can pump slightly more than 1 million barrels of crude oil per day, or more than 1 percent of the world's daily crude output. The 1,100-mile pipeline carries oil from Azerbaijan's Caspian Sea fields, estimated to hold the world's third-largest reserves. Its potential vulnerability was already in the spotlight after it was sabotaged this week, apparently by Kurdish separatists.At the Pentagon, a senior defense official said Georgian authorities have asked the United States for help getting its approximately 2,000 troops out of Iraq. The request is apparently related to the fighting in South Ossetia. Georgia has been the third-largest contributor of combat troops after the United States and Britain. The official, who spoke on condition of anonymity because the discussions have been private, said no formal decision has been made on whether to support the departure, but said it is likely the U.S. will do so.

Labels: Conflict, Georgia, Oil, Russia, US

Record profits for big oil companies - by John Harding

Exxon Mobil Corp., the largest publicly listed company in the world, reported the highest quarterly earnings for an American company in history Thursday.Exxon, which owns about 78 per cent of Canada's oldest oil company, Imperial Oil Ltd., said profit in the second quarter climbed 14 per cent to $11.68 billion US. Exxon's net income was $2.22 US per share compared to $10.26 billion US, or $1.83 US per share last year. Excluding an after-tax charge of $290 million US related to an Exxon Valdez legal settlement, Exxon's second quarter earnings were a whopping $11.97 billion, or $2.27 a share.

The results from the Irving-Tex.,-based company mirrored those of other integrated players as upstream profits surged but downstream earnings plummeted, driven by lower worldwide refining margins. Exxon's upstream earnings in the quarter were a company record $10 billion, up from about $6 billion in the same quarter last year while downstream earnings of $1.55 billion fell by $1.9 billion compared to last year. Exxon rival Royal Dutch Shell also released earnings Thursday, saying net income rose to $11.56 billion US, or $1.87 a share, from $8.67 billion, or $1.38, a year earlier. Earnings from both global super majors fell short of analyst expectations, a result of falling production.

Labels: Oil, Oil Industry

The US has warned Iran to stop missile testing if it wants to gain the trust of the world, after "war games" in the Gulf today that Iranian officials said were a response to US and Israeli threats. Iran demonstrated its military force when it test-fired nine long and medium range missiles in the strategic Strait of Hormouz, through which 40% of the world's oil passes.Television reports said the missiles fired included a new version of the Shahab-3 missile, which officials have said has a range of 1,250 miles and is equipped with a conventional warhead weighing a tonne. Such a missile could reach Israel, Turkey, Afghanistan or Pakistan. Israel's military has also flexed its muscles in recent months as tensions with Iran have risen, sending warplanes over the eastern Mediterranean in June. US officials described that incident as a possible rehearsal for a strike on Iran's nuclear program, which the west fears is aimed at producing atomic weapons. Israeli government spokesman Mark Regev today said Israel "does not desire hostility and conflict with Iran". "But it is clear that the Iranian nuclear program and the Iranian ballistic missile programme is a matter of grave concern," he said.

Note EU-Digest: these tests by Iran are mainly in reaction to the provocative Israeli warplane exercise around and over the Mediterranean. Military experts agree that if Israel audacity to attack Iran the defeat they suffered in Lebanon will be nothing in comparison to the damage that Iran would do to Israel, not only with their rockets, but also with their"proxy" militia surrounding Israel.

Labels: Iran, Israel, Oil, US

Oil Price Off the Rails - by Richard Martin

Obscenely high earnings reports from Big Oil, and the prospect of $4 gas during the US summer driving season has led to some rampant silliness, including the proposed “gas-tax holiday” being backed by candidates Hillary Clinton and John McCain. Congress plans to get into the act, pledging to bring forth legislation to offer low-income Americans relief from high prices at the pump – legislation that US President Bush will almost certainly veto.

Labels: Oil, Oil Exploration

Oil Can't Ruin Europe's Party - James McKeigue

European stocks closed on a high as optimism prevailed following surprisingly good earnings from European giants like Ericsson, Volvo and Man, and a strengthening dollar. Even a late spike in oil sparked by news of an impending refinery strike in Britain and an incident between Iranian and U.S. ships in the Persian Gulf couldn't ruin the party.

Labels: EU, Oil

For the complete report from the New Statesman click on this link

The Netherlands - May it please Your Majesty - Is Curaçao used by US to spy on Venezuela and possibly invade? - by Hugh O'Shaughnessy

In open letter to the Queen of the Netherlands about Curaçao Hugh O'Shaughness writes:"I have the sinking feeling that Your ministers are not giving You the facts about one or two of Your possessions beyond the seas which, as the weeks tick by, take on the aspect of so many kegs of gunpowder. The reason for a possible conflagration is the increasing political and military pressure Washington is piling on the elected government of Venezuela from Your island of Curaçao. In Your gracious speech last Thursday (10 April), at the banquet you gave for President Lula of Brazil in The Hague, You recalled, “a part of the Kingdom of the Netherlands is closely involved with events in South America”. And it is from this part, principally Curaçao, a few miles off the Venezuelan coast, that, by courtesy of Your ministers, that the US military pressure is coming. US officers have called Curaçao a “forward operating location”.

Note EU-Digest:It would be one of the most grave mistakes the US could make if they attacked Venezuela with the direct or indirect assistance from any other EU state. Mr. Chavez should be left to eventually disappear from the scene by his own incapacity to provide leadership to his people, not by a US led invasion or US inspired coup.

Labels: Curaçao, EU, Oil, The Netherlands, US, Venezuela

Iraq cuts oil price to Europe, ups US - Energy - by Simon Webb

Iraq has cut the official selling price of its Basra Light crude for April loading by $2.20 a barrel to European buyers and raised prices for the US, an Iraqi oil official said on Thursday. The April Basra Light price for European buyers was set at BFOE minus $6.25 versus $4.05 in March.

Labels: EU, Europe, Iraq, Oil

EURO versus DOLLAR: Iraq, the US trump to avoid a dollar collapse - by Alberto Cruz

With an exchange rate over US$1.51 against the Euro and a continuing depreciation against the Yen, the dollar is close to collapse. This is a theory that has been repeated for some time now (1) although it doesn't mean we are in the twilight of the current economic system nor in the antechamber of a crisis in capitalism's nerve centre. But we are witnessing a progressive weakening of the United States and this provokes movement, sometimes small but still significant, in what is really important : the progressive reduction of various countries' dollar reserves (right now 64.8% of the world's monetary reserves are held in dollars) and their transfer into other stronger currencies like Euros or Yen. That means fewer dollars in circulation and less financing for the US external debt of about 9 trillion dollars. In fact the dollar as the main currency for international trade and as the main reserve currency for different countries' Central Banks has lost almost 7 percentage points since 1999, dropping from 71% of all reserves that year to the current 64.8% now, which indicates that more and more countries are reducing their dependency on the US currency.

For the US to staunch this constant financial bleeding only one life raft remains : Iraq. That means increasing oil production in that country at all costs, ensuring its definitive return to OPEC on the same terms as OPEC's other members - since Iraq was paralyzed by the UN during the government of Saddam Hussein following the sanctions the country was subjected to - and above all, with Iraq's presence, reinforcing Saudi Arabia, which is under more and more pressure from the oil cartel's other member countries to stop using dollars as the only currency for oil transactions. When Ahmadinejad and Chavez made their proposal, the Saudis were the most reluctant to accept it or even to discuss it and managed to avoid even a tangential reference to the issue in the final declaration of that OPEC summit. But the reality is much more obstinate. Maintaining the alliance with the US is ever more costly in political and economic terms. In Saudi Arabia current inflation rates are the highest since 1980, running currently at 7%. In the United Arab Emirates, inflation is even higher at 9.3%. (3) The reason is none other than the weakness of the dollar in economies completely dollarized as those countries' are. That is what has led the Saudis finally to let their arm get twisted and to accept now a discussion about the dollar in the terms proposed by Venezuela and Iran.

Labels: Dollar, EU, euro, Iraq, Oil, Opec

Oil prices near $104 a barrel as dollar falls to historic low against euro - Jad Mouawad

The price of oil rose Monday to nearly $104 a barrel after the dollar fell to a historic low against the euro, setting a record and exceeding the inflation-adjusted high reached in the early 1980s during the second oil shock.The immediate catalyst for the spike in energy prices is the drop in the value of the dollar. Currency traders are selling dollars and buying euros to take advantage of the difference in interest rates between the United States and Europe. The dollar weakened, continuing its steep decline of last week, and the euro rose to a record $1.5274 in early New York trading. The dollar also fell to its lowest level in three years versus the yen."The question for oil is where is the dollar going," said Roger Diwan, a managing director at PFC Energy, a consulting firm in Washington. "That's going to be the main market mover in the short term." Since 2000, oil prices have more than quadrupled as strong growth in demand from the United States and Asia outstripped the ability of oil producers to increase their output.

The Saudi Arabian oil minister, Ali Al-Naimi, said crude prices were unlikely to fall below $60 a barrel because the cost of developing alternative fuels, like tar sands, is rising. "Therefore, a line has been drawn below which the price cannot fall," Naimi said during an interview which was published over the weekend by Petrostrategies, a Paris-based industry newsletter.

Labels: euro, Oil, World Economy

EU-Digest: special report on the US economy - data collected from recent media reports

Nine large banks in the US have been asked by the Government Office of the Controller of the Currency to provide detailed information on mortgage delinquencies every month to a federal regulator. It is requiring this information initially from Citigroup Inc.; Bank of America Corp; Wells Fargo&co; JPMorgan Chase & Co;US Bancorp; National City Corp; HSBC PLC and First Horizon National Corp. The agency said it is looking at all loans, not just sub-prime loans made to borrowers with poor credit. Information will also include detailed reports on loan modifications, credit scores, foreclosures and delinquencies. Fannie (FNM), the largest buyer and backer of U.S. home loans, said Wednesday it lost nearly $3.6 billion in the fourth quarter of 2007, and $2.1 billion for the year, amid mounting home-loan delinquencies and soured bets on interest rates. "This loss exceeded our expectations and represents a significant deterioration of surplus regulatory capital," Moody's said in a statement. Moody's said it expects Fannie to have sizable losses in the first half of 2008 and possibly a net loss for the year due to the continued deterioration in the residential mortgage sector.FNM also said it has received a subpoena from New York's attorney general seeking information about the types of loans the company offers. Some financial resources are now also indicating that several smaller banks with limited capital reserves could be going under as a result of mortgage delinquencies and bad loans.

On Tuesday: a government report showed wholesale prices climbed 7.4 percent in the past year. That was the biggest annual leap since 1981. People have started cutting back on their spending as they are stung by rising prices and shriveling wages. Businesses, also socked by rising costs and declining demand from customers are clamping down on their hiring and capital investment. Some economists, like Mark Zandi, chief economist at Moody Economy believe the economy already fell in a recession in December.

Can we expect the powerful globe-spanning multi-national US corporate giants to come to the rescue of the U.S. economy and if necessary the world economy? Don't count on it. The top 150 U.S-based non financial multinationals, which include Hewlett-Packard (HPQ) , Pfizer (PFE) , eBay (EBAY), and Sara Lee (SLE), had more than $500 billion in cash and short-term investments at the end of 2007, but they are not spending it in the US. Multi-national corporations probably do not need to worry about this political rhetoric. It is pretty sure, neither one of them, or whoever eventually wins the election for President is unlikely to keep their promise to the voters to renegotiate NAFTA. Politicians never bite the hands which feed them.

Figures collected by the Bureau of Economic Analysis suggest the multinational sector has in some ways been a drag on the U.S. economy since 2000. From 2000 to 2005, the last year for which full data are available, U.S multinationals cut more than 2 million jobs in the US, even as employment in the rest of the private sector grew and there is no sign the trend has significantly reversed. U.S. multinationals have been decoupling from the U.S. economy in the past decade. They still have their headquarters in America, they're still listed on U.S. stock exchanges, and most of their shareholders are still American. But their expansion has been mainly overseas.The US as a whole is not benefiting from the much heralded Global marketplace. Multi-National companies have been given the freedom by the political establishment to shift their tax payments to low tax countries driving up their net profits, which in most cases they are not investing at their original home base. Since 2001, gas prices are up 109 percent, and home heating prices are up 222 percent. Over the same time period, oil company profits are up 313 percent. In fact, the big five Multi-National oil companies recently reported record profits for 2007, with ExxonMobil earning $40.6 billion — the largest corporate profit in American historyAn economics professor at the Harvard Business School said: "Greed seems to be common denominator of the slippery multi-national corporate community."

Today, March one, the price of crude oil stands at: 101.79 per barrel and one euro equals US$ 1.51.52. The average price of gas at the pump is US$ 3.39 per gallon.

Labels: Multi-National Corporations; World Trade, Oil, recession, US Economy

Oil: Venezuela threatens to cut off oil supplies to US

Venezuela’s President Hugo Chavez has threatened to cease supplies of oil to the US, in retaliation for the court move by US oil giant Exxon to freeze Venezuela’s assets. The news sent the crude oil price racing higher for the third day in succession, despite worries over a possible economic slowdown dampening demand for oil. Crude oil for March delivery hit an intra-day high of $94.72 in New York before easing to close at $93.59. News that Valero Energy had temporarily shut down its Delaware refinery because of a power failure on Sunday also boosted sentiment.

Labels: Chavez, Oil, US Economy, Venezuela

King Abdullah Saudi Arabia: Ranked 5th among the World's Worst Dictators

Because King Abdullah and the Saudi royal family control the world’s largest reserves of oil, the U.S. government has not acted to oppose the repressive and intolerant actions of their regime. In Saudi Arabia, it still is possible to be executed for witchcraft and flogged for being alone with an unrelated person of the opposite sex. It is illegal for a Saudi citizen to practice a religion other than Islam. According to a 2006 report by the Center for Religious Freedom, Saudi school textbooks continue to be virulently anti-Christian and anti-Semitic. Last year, the U.S. State Department judged Saudi Arabia one of the top eight offenders of religious freedom.

Omar al-Bashir retains his position as the worlds worst dictator because of his ongoing deadly human-rights abuses in the Darfur region of Sudan. Over the last four years, at least 200,000 people there have been killed by pro-Bashir forces. Nationwide, 5.3 million have been driven from their homes, and more than 700,000 have fled the country. But at the UN last September, Bashir blamed international aid groups for exaggerating the problems as a ploy to raise money for their organizations. And in November, he argued that war-related deaths in Darfur were less than 9,000. Despite agreeing to a 60-day ceasefire last month, he has been accused by his people of ordering troops to continue their attacks.

Labels: Dictatorship, King Abdullah, Oil, Saudi Arabia

The Epic Battle over Crude Oil and the US$ - by Gary Dorsch

Why are Ahmadinejad and Chavez laughing? Oil prices are up 56% this year, after nearly reaching $100 per barrel. At the same time, the US Dollar is mired at a 20-year low, with the US economy teetering on the verge of a recession. The US dollar has fallen over 50% versus the Euro since 2002, and oil prices are nearly five times higher over the same time period. Increasingly, the US dollar’s reserve currency status is looking very fragile. Perhaps, all that’s left supporting the greenback is America’s military might. “They get our oil and give us a worthless piece of paper,” Ahmadinejad told OPEC ministers in the Saudi capital of Riyadh, insulting the US dollar.The Federal Reserve has allowed the MZM money supply to expand by $850 billion this year, up 13% from a year ago. The broader US M3 money supply is 15.8% higher, it’s fastest in history, monetizing the prices of crude oil and gold, key hedges against inflation, to all-time highs.

Explaining the Fed’s reason for ignoring sharply higher food and energy prices, on October 20th, Federal Reserve governor Frederic Mishkin said, “Changes in price indexes without food and energy provide a clearer picture of underlying inflation pressures. If the monetary authorities react to headline inflation numbers, they run the risk of responding to merely temporary fluctuations,” he said. At the same time, Mishkin said it was the Fed’s job to “counteract negative shocks to the economy,” from high oil prices, suggesting a further expansion of the money supply.

Clearly, the US Treasury expects a quick fix to the Global “Oil Shock” from King Abdullah to cap global oil prices, by boosting Saudi oil output next month. That would permit the Fed to lowers its lending rates and inject more dollars into the hands of Wall Street dealers, while keeping the “crude oil vigilantes” at bay. But a move by the Saudis to knock oil prices lower could also inflict damage on its own stock market, which is just starting to shake off a nasty two year hangover.

Labels: Dollar, EU, euro, Oil

World Economy - Opec: Oil prices could reach $100 a barrel ``soon''. - by Mark Shenk

``OPEC can't do anything about the price,'' Venezuela's oil minister Rafael Ramirez said today in Riyadh, Saudi Arabia, where OPEC is holding a heads-of-state summit this weekend. Oil prices could reach $100 a barrel ``soon,'' he said. The December futures contract in New York expired today.

Saudi Arabia, the world's largest oil exporter, won't discuss pricing oil in currencies other than the U.S. dollar, Saudi Foreign Minister Prince Saud Al-Faisal said, speaking at a meeting of OPEC oil and finance ministers today. Venezuela and Iran have pushed for discussions on pricing oil in currencies other than the dollar. ``As for the monetary aspect and the dollar I would like to ask his Excellency, the minister of Iran, to leave this question to the appropriate party, the ministers of finance, without mentioning that we gave them this task so that there won't be negative impact from OPEC,'' Al-Faisal said today, speaking in reaction to an Iranian proposal to discuss the currency.

Labels: Oil, Opec

King Abdullah of Saudi Arabia, the "Capi Di Tutti Capi" of the Oil Emporium" visits Britain

For the complete report from the Telegraph click on this link

King Abdullah of Saudi Arabia visits Britain - Oil is king  but for how much longer? -

>Some of the Oil industry's biggest hitters made their way to Buckingham Palace last Tuesday. The occasion: a state banquet in honor of King Abdullah of Saudi Arabia.On the royal guest list were Jeroen van der Veer, the chief executive of oil giant Royal Dutch Shell, Sir Michael Bishop of BMI and Dick Olver of BAE Systems, the defence giant. Business was off the agenda but the first state visit to Britain by a Saudi monarch in two decades was fortuitously timed. King Abdullah couldn't have asked for a better way to remind the western world of his country's importance than last week's record oil price. Daniel Yergin, an industry veteran and the chairman of Cambridge Energy Research Associates, agrees. "Oil prices are becoming increasingly decoupled from the fundamentals of supply and demand," he told a conference last week. "With prices over $90 a barrel and strong anticipation of $100, the oil market is showing signs of high fever, stoked by fears of clashes in the Middle East and resulting disruptions of supply. A weakening dollar and anticipation of further weakness add further fuel to the fever."

With western Europe about to head into the winter months, the supply situation could get worse before it gets better – which could propel the price of oil past the magical $100 mark.The voracious appetite of emerging countries, in particular China, has been the main driver behind the huge surge in demand. The Organisation for Economic Co-operation & Development (OECD), for example, estimates that China contributed more than 24 per cent of additional oil demand between 1995 and 2004. There is a growing consensus, however, that by next spring prices will be on a downward trend. Goldman Sachs, which has been the most bullish Wall Street investment bank on the commodity, last week recommended clients to take profits, predicting that the price of oil could fall back to $80 a barrel by next April – although it admitted that, until then, anything could happen. Says Oppenheimer's Gheit: "It's a bubble. The $64,000 question is, when will the bubble burst?"

Labels: Britain, EU, Oil, Saudi Arabia, World Economy

Alternative energy use 'can check oil-related inflation' - by Saifur Rahma

The use of alternative, or 'green' energy could help oil importing countries tackle oil-related inflation, analysts say, as oil prices hover well above $80 per barrel. In the short to medium term, prices are likely to touch the psychological $100 mark. "Most oil importing countries need to seek alternative energy and ensure lesser use of energy to sustain growth," said an analyst, requesting anonymity.

The world oil supply increased by 415,000 barrels a day in September, to average 85.1 million barrels a day, according to the International Energy Agency. Of this, the Organization of Petroleum Exporting Countries (Opec) produces about a third, while more than 50 million barrels are produced by the rest.Although global oil product demand remains virtually unchanged at 85.9 million barrels in 2007 (a rise of 1.5 per cent over 2006) and 88 million barrels in 2008 (a rise of 2.4 per cent), the speculative elements in the international oil trade are going to use any excuses to push the prices up - something analysts feel, needed to be fixed.

Labels: Alternative Energy Resources, Oil, World Economy

Iran says oilfields 'too attractive' for France to quit

Iran on Saturday rejected the possibility of a French investors' pullout of its oil and gas sector amid calls by Paris for tougher sanctions on Tehran over its nuclear programme, the ISNA news agency reported. "Iran's resources and market are too attractive for the French to give up," deputy oil minister Gholam Hossein Nozari said.

France has called for European sanctions against Iran for its refusal to suspend uranium enrichment, which could be used to make atomic weapons.

It wants European firms not to bid for new business in Iran and for financial institutions to scale back investments, in a drive to pressure Tehran parallel to UN Security Council sanctions.

Labels: EU, France, Iran, Oil, Oil Exploration

The coming Oil crunch - As world production peaks and then declines, the energy culture must change

Each time there’s a significant jump in gas prices, oil company executives give simplistic excuses for the reasons they make $20 billion to $40 billion in profits per year. It’s a bad enough situation. But what is rarely discussed is that in less than a decade, the issue will not be the price of gasoline — it will be whether gasoline is available at the pump at all.

The world is heading toward a “peak oil” situation. What this means is that in 2012, world consumption of oil will reach the peak capacity of existing oil resources. Available resources in the Gulf of Mexico already reached that peak in 2005.

Labels: Oil, Oil Exploration

Russia Enters the Race for Africa's Riches - by Owen Matthews

Today, emerging-market giants are fighting for oil, gas and metal ore in Africa as energetically as 19th-century European colonialists grabbed land on the continent. Recently, the Chinese have been the most aggressive, with more than 700 companies active in 50 countries, according to Standard Bank of South Africa. China is now Africa's second largest aid donor and trading partner, behind the United States, with trade up fourfold to $40 billion since 2000. But Russia, the second most active emerging-market power in the area, is gaining. While trade with Africa is only $3 billion a year (up threefold since 2000), Russian companies flush with cash have sunk over $5 billion into buying up African assets since 2000— and that's not counting $3.5 billion of oil exploration deals that will come online before the end of the decade.

Labels: Oil, Oil Exploration, Russia

Alan Greenspan claims Iraq war was really for oil - by Graham Paterson

In his long-awaited memoir, to be published tomorrow, Greenspan, a Republican whose 18-year tenure as head of the US Federal Reserve was widely admired, will also deliver a stinging critique of President George W Bush’s economic policies. However, it is his view on the motive for the 2003 Iraq invasion that is likely to provoke the most controversy. “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,” he says.

Britain and America have always insisted the war had nothing to do with oil. Bush said the aim was to disarm Iraq of weapons of mass destruction and end Saddam’s support for terrorism.

Labels: Greenspan, Iraq. War, Oil

Oil Wars: Fueling Both U.S. Empire & Ecocide - by Dan Brook

Dripping, spilling, spreading, burning. Welcome to the New World Chaos, what the Bush administration is now calls “the long war”.

The cost is mounting: over 3,700 Americans and perhaps three-quarters of a million Iraqis, as well as over 100 British and over 100 people from other countries — not to mention over 1,000 privatized “contractors”, whose outsourced jobs were formerly done by soldiers — now dead from this latest oil war, in addition to the tens of thousands (or more) with physical and mental injuries, each one a human being with a family and friends; more international ill-will and terrorism, due to U.S. aggression and arrogance, as well as a raging civil war; fewer civil rights, due to the so-called Patriot Act and the Military Commissions Act; less privacy, due to domestic spying; hundreds of billions of dollars, perhaps even a trillion dollars, in public tax money gone and at least $2 billion more each week; and hundreds of billions of dollars in private profits for giant corporations (ExxonMobil, the world’s largest oil company, announced soaring profits of $36 billion for 2005, exceeding any corporation in U.S. history, based on revenues of over $1 billion per day, which include continuing subsidies from the U.S. government).

Labels: Oil, US Economy

Iran warns US again

"In case of an American attack against Iran, the interests of this country around the world and in the region will be endangered," Mohammad Baqer Zolghadr, a deputy Interior Minister for security affairs, was quoted as saying. "Today, all American bases in the region are within the reach of our medium-range weapons," said Zolghadr, former deputy commander of Iran's Revolutionary Guards.

"Today, if the slightest disorder in the region's security and in the security of the Strait of Hormuz and the Persian Gulf is created, oil prices will reach $250 a barrel and this will lead to the death of European countries and America in terms of economy and security," he added.

Labels: EU, Iran, Oil, USA

National security consequences of oil dependency - Ariel Cohen, Ph.D.

The United States is the largest oil importer in the world, bringing in 13.5 million barrels per day (mbd), which accounts for 63.5 percent of total U.S. daily consumption (20.6 mbd).[1] Oil from the Middle East--specifically, the Persian Gulf--accounts for 20 percent of U.S. oil imports, and this dependence is growing. By 2017, the U.S. will be importing approx­imately 68 percent of its oil needs. Oil consumption represents 40 percent of America's energy needs, pri­marily used in ground and air transportation. The dependence of the U.S. and the global economy on oil is growing, which can have dire consequences for the economic well-being of the United States, its national security, and the American way of life.

The EU, including its Brussels appa­ratus, is split, since Germany is already deferential to Russia's energy interests. German companies such as E.ON are in partnerships with Gazprom to develop gas fields and downstream operations in Russia and Europe. It is also possible that the U.S. State Department may intervene with Bucharest to prevent a proposed Gazprom pipeline from Tur­key from crossing Romanian territory. Clearly, the two small U.S. military bases in Romania and Bul­garia and the proposed missile defense base and radar in the Czech Republic and Poland are not going to stop Russian expansion. Pipelines are much more effective tools of foreign policy than missiles.

Labels: Energy, Oil