September 6, 2002 at 4:08 pm
Germany, facing general elections in september, will stay out of any war with Iraq. Both the candidates Schroder and Stoiber said they opposed military actions against Iraq. Bad news for the US, as the air bases in Germany are crucial for any military operation above Iraq.
A survey showed us that 65 % of the Europeans and 60 % of the Americans do not want a war with Iraq, unless backed by the UN. Both Bush and Blair are doing a political suicide if they go on like this. Especially Blair will have a hard time, convincing his own people. Many Brits see Bush as a danger for worldpeace, according to a recent poll (Times.co.uk).
Schröder leads chorus of EU war dissidents
By Roger Boyes in Berlin and Richard Beeston, Diplomatic Editor
TONY BLAIR’S robust support for President Bush’s plans to depose President Saddam Hussein widened the gulf yesterday between Britain and European critics of the United States’s proposed military action against Iraq.
Led by Gerhard Schröder, the German Chancellor, a number of European leaders distanced themselves from any action against the Iraqi regime that was not sanctioned by the United Nations and did not have the support of moderate Arab states.
And for the first time Mr Blair came in for the sort of criticism that so far has been reserved only for President Bush and hawkish members of his Administration.
Herr Schröder gave warning that the Middle East would be “set ablaze” by a war against Baghdad. “Under my leadership, Germany will not be part of an intervention,” he said.
“Friendship should not mean that one does everything a friend demands,” Herr Schröder added. “Anything else would be subordination, and that would be wrong.”
America immediately registered its anger. “The present policy of the Government is isolating Germany from mainstream opinion even within the European Union,” Dan Coats, the US Ambassador to Berlin, said.
The German leader, however, left a Cabinet meeting — during which Mr Blair’s comments on Iraq were discussed — firmer than ever in his opposition to war. He did not directly refer to the British Prime Minister, but his remarks were seen by many as a direct response. “The Chancellor does not want Mr Blair’s war talk to be seen as the single voice of Europe,” one highly placed German official said.
Yesterday Herr Schröder laid out what amounts to a dissenters’ charter for those European governments reluctant to toe the United States Government’s line. He advanced four arguments: the lack of a proper post-Saddam strategy; the lack of a Middle East policy after a war; the outstanding tasks in Afghanistan; and the devastating effects of a war on the world economy.
“It was a mistake to depart from the UN line and replace the goal of isolating Saddam Hussein with the goal of removing him from power,” said the Chancellor, who is faced with fighting a general election on September 22.
He said: “If you want to exercise political and economic pressure, then it is not rational to announce that you want to get rid of the regime.”
Javier Solana, the EU foreign policy chief and former head of Nato, accepted the possibility of using military force against Iraq — but only as a last resort. He said: “I do not want to exclude the need for a military threat when all other means of pressure have failed.”
Chris Patten, the EU External Relations Commissioner, issued a veiled warning to Washington and London that they should act only with UN approval and with the backing of a broad coalition. “Efforts to force Iraqi compliance are more likely to succeed if they are backed by a coalition of concerned parties as broad and effective as that which was put together with great diplomatic finesse in 1991 and which helped secure the expulsion of Iraqi forces from Kuwait after the unprovoked invasion of that country,” Mr Patten told the European Parliament in Strasbourg.
A French diplomatic source said: “We have not seen any serious information, be it French or from an ally, that would allow us to confirm or rule out the existence of weapons of mass destruction in Iraq.” Paris believes that Iraq is a matter for the UN Security Council.
A majority of Europeans appear to be against a unilateral attack on Iraq. A poll of 9,000 people indicated that 60 per cent of Europeans and 65 per cent of Americans were in favour of action if it was carried out as part of a coalition and had UN backing.
By: Geforce - 18th September 2002 at 06:23
RE: Iraq : who’s in?
Yeah too difficult to ignore you. I have way too much fun answering your posts. It’s like talking to Bush – I’m a poor lonesome cowboy and I’m far away from home – himself }>.
I recieved your email. Had a few laughs. Anyway I agree with the Marilyn Manson-part, and I also agree with the not giving charity to some crack-whores part. But that’s about it }>.
A liberal with a goal is more dangerous than a hells angel? (guess what I am ? }>) Well this was good. I still remember the images of hells angels riding with stars and stripes just after 9-11, behaving like good Americans. The fact that they commited some slaughters in the 60s and 70s makes them good Americans? Ohh boy.
You say “if the US finds out?” What ye gonna do? Attack us, your few remaining allies on this planet??? Well that will make you popular. Remember we have a few experiences here with war, it’s not like you’re going to encounter some bearded guys riding donkeys. Ever seen an East-German or Irish woman, that will be our weapon of mass destruction }>. And otherwise we’ll just bore you to death with our talks about “women and men should be treated equally”, “save the trees” and “at least we have a president for whom we voted for” (well actually we have a royal family).
By: Cyrus_666 - 17th September 2002 at 20:52
RE: Iraq : who’s in?
“why should we still feel afraid?”
Maybe you shouldn’t…but if we ever find out that you have given him any assistance (such as intel on how we obtained our proof of his guilt in developing WMD), thus causing us or our informants harm…may God have mercy on your souls because the U.S. sure won’t! x(
By: Cyrus_666 - 17th September 2002 at 20:44
RE: Iraq : who’s in?
Hmmmm…isn’t Belgium a suburb of Paris? 😀
By: Geforce - 17th September 2002 at 20:24
RE: Iraq : who’s in?
Yeah I’m belgian. But people like Cyrus don’t understand there’s a difference between Belgium and France, so i’ll just talk about ‘Europe’, eventhough there are thousands of differences. the man won’t even see the difference between Syria and France, how can one take him serious?
By: Arabella-Cox - 17th September 2002 at 20:17
RE: Iraq : who’s in?
I thought you’re Belgium?
By: JJ - 17th September 2002 at 19:57
RE: Iraq : who’s in?
Vortex, you and I both know that sooner or later the US will attack Iraq. The UN is just a way to make all those appeasers just a little bit calmer. I have no doubt whatsoever in my mind that any new inspection team will encounter just as much trouble as UNSCOM has. SH isn’t looking to give up his WMDs. And I’ll have to see if Iraq will really let the new team in unconditionally.
As for Saddam’s use of WMDs: he has used plenty in the past. On his own people and on its enemies. There is no reason to believe Saddam would hesitate to use them again if he finds the situation suitable. You know, whenever I hear about the world wanting to give SH anotehr chance, I cannot help to think about that song from Southpark the Movie: I Can Change, also sung by Saddam.
I’d say, move in now, because tomorrow may be to late. Just listen to Khidhir Hamza.
Shalom,
Jonathan
By: Geforce - 17th September 2002 at 19:35
RE: Iraq : who’s in?
If Saddam has such a nice buddies like France, Russia and China, why should we still feel afraid? I mean, you say it yourself that Saddam can threaten my country.
By: Cyrus_666 - 17th September 2002 at 17:21
RE: Iraq : who’s in?
“Bush only seems to give intelligence information to the Britons, but the other members haven’t seen much proof.”
Yeah, like we’d share it with all of Sadam’s buddies like the French, Germans, Russians and Chinese!!! All nations who are currently lining up to get a share of the economic pie once sanctions are lifted by portraying themselves as “the only nations who really cared about the poor, poor Iraqi people…not those evil, bad Americans.” (NOTE: HEAVY SARCASM)
“Aren’t the words “liberty, egalité and fraternité” written on the statue of liberty }> ?”
Yep…and where does the Statue of Liberty currently reside? In Paris or in New York harbor? Appropriately, its in U.S. care and not in the hands of the hypocritical French. 😛
By: Arabella-Cox - 17th September 2002 at 17:01
RE: Iraq : who’s in?
[updated:LAST EDITED ON 17-09-02 AT 05:02 PM (GMT)]hold on there JJ, i didn’t say attack Iraq irregardless. For one, the US isn’t like Israel and we HAVEN’T practice open preemtive wars, at least overtly. That is a lot of global responsibility to do so and that’s why the US opted to go to the UN first. And, Geforce, you either mis-typed or that’s exactly what you want but you said only if Saddam “use” WMD. Isn’t it a bit too late by that time? All the UNSC resolutions Saddam violated didn’t put the condition on only if he “use” it, but if he have or planning or thinking of having it….because by default we (as much of the world agree) know he will use it when his rage acts up again. No, if a terrorist can’t infiltrate and target the US, they’ll hit anybody else that let’s their guards down, and that includes Belgium….the question is, do you fell lucky? The idea is, don’t even let them pose the question. Remember what i said about propaganda, prestige, and scare the crap out of SH…
By: JJ - 17th September 2002 at 07:53
RE: Iraq : who’s in?
Nice that you bring up the Treatey of Munchen, Geforce, as such a kind of deal with Iraq is exactly what should be prevented. IOW, attack Iraq, today rather than tomorrow.
By: Geforce - 17th September 2002 at 07:13
RE: Iraq : who’s in?
<< I’ll answer your question GE, Pres Bush has only asked Russia to give Georgia some time and the chance to clean out the Chechyan terrorists from its soil for themselves… >>
GWB has said he will make no distinction between the terrorists and the nations who support terrorists. If Russia has got enough evidence, than Georgia should also be a “terrorist-supporting nation”. And like GWB you can’t limit the war on terrorism on just one or two men. I’m not saying Russia should invade Georgia, I’m only trying to get a better perspective on the “war on terrorism”.
<< I agree, Georgia is totally different and to suggest otherwise is totally ignorant. >>
Yes, totally different. But please keep one option open about that being ignorant.
<< The Georgian government openly opposes to the terrorists attacking Moscow. Not only that, they asked for US support in anti-terror trainings. Russian rationale was that some Georgian establishments, maybe local police, maybe a few politicians, maybe a mayor of a village is helping in secret. >>
Is there any evidence that Georgia is fighting (openly or secretly) those terrorists. Though being the most credible state in the Kaukasus, I still think there are lots of internal problems over there. What the president of Georgia says is not exactly what the generals are doing. Keep in mind, some of those Chechyans are probably family, and therefor feel very related.
<< That would include YOUR country GEFORCE. Saddam OPENLY defies all UNSC resolutions. >>
I think Saddam’s last concern is Belgium :7. But anyway, I do believe the UNSC should take its responsabilities (including France, Russia and China) IF, IF there’s evidence of SH using WMD. Bush only seems to give intelligence information to the Britons, but the other members haven’t seen much proof.
I do agree with the UNSC resolutions. But I don’t think the US is really thinking about letting in the inspectors without replacing SH. SH is an ‘evil’ man, no doubt about that, but there are more ‘evil’ men around, who seem to get “carte blanche” of the UNSC : just look at Zimbabwe, Rwanda …
<< but when YOUR leaders came back from NY after the US asked for a UNSC resolutions, you continued on to say something about how useless your leaders are. >>
I didn’t say they were useless (well some of them are actually but not the PM and the minister of foreign affairs), I said they were hypocrit. They made an agreement with France and Germany to do everything to prevent a military conflict (that would destabilise the region) and openly urge Saddam to let in the UNSCOM personel. Instead Europe was just bargaining with America like “OK you can have your war but then we want …” etc. Maybe it’s just because I’m too naive and had faith in politics and principles, boy, what a hangover. I hope Russia and China will make the right decission. Which one that is, I don’t know yet. First we got to see evidence.
Only Germany seems to be reluctant for a war, but I’m sure that will change after the elections this month, doesn’t matter who will win. The German public strongly opposes any military operation.
<< Why don’t you say, ok now the US plays by the rules, Saddam let the inspectors in. >>
That’s what I said. Saddam should let the inspectors in. Or otherwise military action is necessairy. But so far, Bush hus only adressed the General assembly saying that he wants to work through the UN. Good step, but what if Russia and China start whining and stuff, will Bush still go through the UN?
A war without the UN would give the west another bad image. Eventhough we may focus on those terrorists, I don’t think the local population in Iraq or A’stan understands the difference. Therefor I think we should first talk-the-talk (not with Saddam I mean, but within the UNSC) and than walk-the-walk.
<< NO, you simply make fun of your own leaders. >>
What I said was the bitter truth :-(.
<< Seems like it could’ve been Hitler…that’s exactly why JEWs got screwed over there… >>
Always the “Jews”. Did you know that Hitler also killed some 15 million other people like homosexuals, the handicapped, the gipsy’s, the “üntermensch” aka the Russians. And the reason why Hitler remained in power was because the UK and France were bargaining with the axis powers to overthrow the Soviet regime. At first the ‘allies’ supported Hitler and Mussolini, remember the treaty of Mûnchen?
<< Thank you…FINALLY…someone who understands where I’m coming from! >>
Aren’t the words “liberty, egalité and fraternité” written on the statue of liberty }>?
By: Cyrus_666 - 16th September 2002 at 22:43
Vortex
Thank you…FINALLY…someone who understands where I’m coming from! 🙂
By: Arabella-Cox - 16th September 2002 at 22:23
RE: Scooter
I agree, Georgia is totally different and to suggest otherwise is totally ignorant. The Georgian government openly opposes to the terrorists attacking Moscow. Not only that, they asked for US support in anti-terror trainings. Russian rationale was that some Georgian establishments, maybe local police, maybe a few politicians, maybe a mayor of a village is helping in secret. Saddam OPENLY gives money to terrorists. OPENLY praise any terrorists doing suicide bombings anywhere. That would include YOUR country GEFORCE. Saddam OPENLY defies all UNSC resolutions. You openly accused the US of doing something illegal for wanting to attack Iraq without the UNSC resolution, yet what happen to your reasoning for IRAQ? I understand that because the US is a world leader and should be responsible, but when YOUR leaders came back from NY after the US asked for a UNSC resolutions, you continued on to say something about how useless your leaders are. Sounds like you have an aggenda against the US there irregardless( and this is EXACTLY what some Americans here are talking about of anti-Americanism, it’s not what you can’t say but what you continue to say when we agree). Why don’t you say, ok now the US plays by the rules, Saddam let the inspectors in. NO, you simply make fun of your own leaders. Seems like it could’ve been Hitler…that’s exactly why JEWs got screwed over there…
By: Cyrus_666 - 16th September 2002 at 16:04
RE: Scooter
I’ll answer your question GE, Pres Bush has only asked Russia to give Georgia some time and the chance to clean out the Chechyan terrorists from its soil for themselves…or try to work together at doing so….failing that, then I think Pres Bush would say, “do what you must to defend yourselves”. Now, how does that relate to America and Iraq? Is America supposed to ask Sadam to work harder at getting rid of himself…failing that should we just work harder with him to get rid of himself? Georgia is NOT Iraq. Please try to use a rational argument.
By: Geforce - 15th September 2002 at 22:07
Scooter
[updated:LAST EDITED ON 15-09-02 AT 10:12 PM (GMT)]Why always your country?
Than you didn’t read my post.
I said both Europe and the US are responsible for it.
I even gave you the example of Italy and mentioned I can give you examples of my own country.
Criticism on the US is seens as a bias, OK for me, as that is what you think.
Fact is, Europe (exept Britain) is not threatening Iraq, does not have any important military installations/bases in the ME, in other means, can do no #####.
A military weak Europe which can not make decissions on its own because we need the US to take care of our own problems (Yugoslavia, I’m not arguing if this war was right or wrong, just gave an example).
As long as Europe remains a military midget, the European gov’ts have to cooperate with the US.
Saddam is a dictator, a massmurderer, I agree with this, but without the full support of the UNSC I think any action undertaken by “coalition forces” is illegal, wheter they are American, British or European.
I’m disappointed in our own policy-makers who assured the people here they will do everything to prevent a new Gulf War from happening, but when they returned from NY, they have changed their stance on a war with 180°.
This has nothing to do with the US, it’s the hypocrisie of our own heads of state and gov’t leaders.
You say the US is not dependent on oil from the ME. Possible, but imagine what advantage they would have if they could controll the oil fields in Iraq, raising the oil prices tremendously. They could sell oil to Europe, India … earning billions with it. This is just a theory, but oil is always important, has always been and will always be. And Europe could also survive on its own without oil from the ME. There are still reserves in the North Sea + we could make a deal with Russia to drill oil and gaz over there.
And you still haven’t answered my question on Georgia.
By: Arabella-Cox - 15th September 2002 at 21:32
RE: Don’t mention the O word
I did not say that the US had no oil interests. Just that Europe was more effected by it! The US doesn’t get the majority of its oil from the Middle East but, would still be impacted by any major disruption in its supply. (thereby effecting the worldwide price of oil) As I have said many times in the past I believe you have a double standard. You went to great pains to write a lenghty reply to my earlier posting. Yet, you only criticize the US? As always your bias toward the US is showing! Your country would be much more effected by a disruption of oil from the Middle East than mine. Yet, I don’t hear you criticizing your country or the EU for its policies? Why, is that? Why is it that my countries “interest” are always bad and your countries are always good? You condemn the US for policies that your country and the (EU) practice everyday………….
By: Geforce - 15th September 2002 at 20:03
Don’t mention the O word
Iraq’s oil
Don’t mention the O-word
Sep 12th 2002
From The Economist print edition
http://www.economist.com/displaystory.cfm?story_id=1325264
Reuters
If America goes to war against Iraq, what will become of all that oil?
Get article background
AMERICA’S chief interest in going after Iraq’s president, Saddam Hussein, is doubtless to save the world from his actual or potential weapons of mass destruction. Another large consideration, secondary as it may be, has attracted less attention than it should have: the effects that would follow from the opening up of the country’s enormous reserves of oil.
Iraq’s reserves are the second-biggest in the world, after Saudi Arabia’s (see table). At present, thanks to UN sanctions and Mr Hussein’s attempts to evade them, the country is producing a fraction of its potential. If it were to produce oil at a rate to match its reserves, say some geopolitical strategists, it could end Saudi Arabia’s domination of world oil markets.
That would not come too soon for the United States. America is by far the world’s biggest oil-user, burning up a quarter of the total consumed. Its imports have risen in recent years, to more than half its total consumption. Since Saudi Arabia is the chief supplier of those imports, successive American presidents have gone to great lengths to cultivate the unsavoury and dictatorial House of Saud. They have also tolerated Saudi Arabia’s command of the Organisation of Petroleum Exporting Countries (OPEC), which keeps oil prices much higher than they would be if market forces prevailed. Now America’s leaders increasingly feel—as Winston Churchill remarked of converting the British fleet from coal to petroleum before the first world war—that “safety and certainty in oil lie in variety, and variety alone.”
In hopes of finding such variety, George Bush is now changing American policy. He has openly embraced Vladimir Putin’s goal of expanding Russia’s oil industry, with talk of increased exports and a big ministerial conference on energy planned for Houston in October. Another opportunity, openly acknowledged or not, is the present showdown with Iraq. Rumours of war are likely to dominate the meeting of OPEC ministers on September 19th in Osaka, in Japan.
The fear premium
Conventional wisdom says war drums are good news for OPEC and the Saudis today, but bad news in the longer term. Talk of war always heats up the oil price, giving producers an instant windfall. Yet tomorrow, if America succeeds in toppling the bully-boy of Baghdad, the world could be awash in Iraqi oil. Look closer, and matters are more complicated.
In the short term, jittery traders are already handing oil producers a handsome windfall profit. Last week, on ill-founded rumours of a huge air strike by American and British planes in western Iraq, prices shot to their highest level in a year, passing $30 a barrel for West Texas Intermediate, America’s benchmark crude. Daniel Yergin, head of Cambridge Energy Research Associates (CERA), an industry consultancy, estimates that the “fear premium” on each barrel of oil is now $3-5.
As war gets closer, prices seem bound to go higher. During the Gulf war, a decade ago, prices spiked past $40 a barrel in nominal terms. Phillip Ellis of the Boston Consulting Group, who has analysed the history of oil shocks and their impact on prices, argues that prices fall into two ranges. The peace curve, as he calls it, “forms around an average of about $22-24 in today’s money. The war curve forms around a price north of $50.”
Some would put it higher. Sheikh Zaki Yamani, Saudi Arabia’s oil minister during the shocks of the 1970s, gave warning last week that if America invades Iraq, Mr Hussein could attack Saudi Arabia and Kuwait and so send oil prices to $100 a barrel. Iraq’s vice-president, Taha Yassin Ramadan, stirred the pot further this week by goading fellow Arabs to strike American targets in the Middle East if Iraq is attacked.
High prices are clearly a nightmare for consumers. Paradoxically, and here is where the complications begin, they are bad news for producers, too. Prices much above Mr Ellis’s “normal” range act as a brake on economic growth. There are signs of this happening already, especially in Asia. Some economists worry about an oil-induced global downturn. As the earlier oil shocks have taught OPEC, prolonged periods of high prices only kill the goose that lays the golden egg.
Another reason why sky-high prices are bad for OPEC, and especially for Saudi Arabia, is that they spur oil production from uneconomic places. In a genuinely free market, most of the world’s oil would be produced by Saudi Arabia and its neighbours, where the cost of exploration and production is a dollar or two a barrel. In contrast, trying to force drills through rocks in the Arctic or beneath deep water can heap up costs to $10-12 a barrel.
Getting round the Saudis
Because OPEC’s “price-defence” strategy has kept prices above $18 a barrel for three years, argues the Petroleum Finance Company (PFC), an industry consultancy, projects in non-OPEC regions—the frozen wilds of Russia, the turbulent Caspian basin, the deep waters of the Gulf of Mexico—have attracted many billions of dollars in investment. High prices have already inspired the development of 2.6m barrels per day (bpd) of non-cartel oil, besides investment in projects that promise to deliver another 5.2m bpd from alternative sources by 2008. This new supply, says the PFC, “has and will continue to eat up all the increase in global demand, leaving OPEC no room to expand its own output and making the cartel’s price-defence strategy increasingly difficult to maintain.”
However, the pain is not equally shared among cartel members. It is felt mostly by Saudi Arabia, the self-appointed “swing” producer. That is because higher prices have also encouraged some of the smaller fry in the cartel, such as Nigeria, Algeria and Libya, to develop new production capacity and to bypass existing production quotas set by OPEC. John Mitchell, an energy analyst at Britain’s Royal Institute of International Affairs, offers a more fundamental reason to suppose that the cartel’s “aggressive collusion” will not endure: the ratio of production to reserves varies greatly among cartel members, and so the incentive to increase output rather than keep it flat also varies greatly.
The result, according to estimates by Deutsche Bank, is that new supply could outstrip expected demand by as much as 1m barrels a day by 2004. The only country that has historically been willing to reduce its own output—and revenue—by such a large volume to “balance” the market and prevent a price collapse is Saudi Arabia.
Reuters
With years of graft and heaps of money, they may be a force again
All this explains why Saudi Arabia has long advocated a moderate stance on prices. Yet when ministers meet in Osaka next week, they face a dilemma. Thanks to fears about war with Iraq, prices are high and the markets are anxious. Winter is on the way, and with it a seasonal upturn in demand for oil. On September 11th the International Energy Agency (IEA), a quasi-governmental watchdog set up by the world’s biggest oil consumers, said that stocks of crude were “uncomfortably low” going into the winter, and the whole situation “every bit as precarious” as in 1999, before a notably volatile spell for oil prices.
This being so, the Saudis might argue at Osaka for a modest increase in quotas. On the other hand, as Venezuela and Iran point out, the greatest risk facing the cartel is not high prices but a price collapse. That could happen if OPEC releases oil into a weakening global economy. It did precisely that in the run-up to the Asian economic crisis a few years ago, and oil prices fell to around $10 a barrel.
Even if Saudi Arabia somehow smooths over the meeting in Osaka, some argue, the longer-term picture for the cartel is bleak. The expulsion of Mr Hussein, which looks likelier than not, could turn the oil market upside down. This is because Iraq, with its vast reserves, is the only country that could challenge the Saudis by throwing open the taps.
If a post-Saddam regime did that, Saudi Arabia’s strategy of keeping OPEC prices between $22 and $28 a barrel would be under threat. If the flood of Iraqi oil continued indefinitely, goes the argument, the Saudis would have no choice but to abandon price (and, with it, their allies in OPEC with higher costs and smaller reserves) and go for volume instead. Though politically difficult, that need not be economic folly: Deutsche Bank calculates that Saudi Arabia could maintain oil revenues at $60 billion or so either by producing 6m bpd at around $30 a barrel, or by cranking out 10m bpd at about $17 a barrel.
Will the flood of Iraqi oil occur? It is possible. Any future government in Iraq, needing vast amounts of money to rebuild the country, will try to expand the oil sector as fast as it can. At least some oil executives believe that this bonanza could draw much foreign capital into Iraqi oil production. Even if the new government did not break ties with OPEC, as the United States might like, it would probably argue—bearing in mind the years of UN supervision of its oil exports—for a lengthy exemption from quotas.
OPEC, RIP?
It might seem, then, that knocking out Mr Hussein would kill two birds with one stone: a dangerous dictator would be gone, and with him would go the cartel that for years has manipulated prices, engineered embargoes and otherwise harmed consumers. Yet several factors suggest that the transition to a post-Saddam oil world will be messy—and that such a world could still have a forceful OPEC in it.
Consider again Sheikh Yamani’s fear: that Mr Hussein, in a desperate last act, may attack the Saudi and Kuwaiti oil infrastructure and bring the global economy to a halt. The oilfields could be set ablaze, as they were during the Gulf war. Refineries and terminals could be contaminated with radioactive or biological agents. With help from outsiders, Mr Hussein might be able to shut down shipping lanes such as those in the Straits of Hormuz, preventing Saudi Arabia from getting its oil to market.
On balance, though, the risks of a prolonged physical disruption seem small. One senior European oilman insists that it would be very difficult to engineer a complete shutdown of all Middle Eastern oil: “That’s a bit like thinking you could shut down all North Sea production by firing SCUD missiles from Germany.” CERA’s Mr Yergin says it is difficult to target all the oilfields, pipelines and export terminals that matter in the area. Saudi Arabia has plenty of spare capacity and transport options for its oil; besides, pipelines are pretty quickly patched up.
The world also holds emergency stocks of oil much bigger than those it held back in the 1970s. These should not inspire complacency; as the chart shows, they cover only a few weeks of disruption, and a prolonged war could still mean disaster. Yet the world at least has the IEA, monitoring oil markets and emergency stocks and engaging OPEC in “consumer-producer dialogues” (another one will take place in Osaka next week) to encourage stable prices. If oil supplies are suddenly threatened, as Robert Priddle, the IEA’s boss, explains, governments have even given him the extraordinary power to release oil stocks unilaterally.
Fears of a physical disruption to supply are therefore overblown. More worrying, however, is the possibility that Saudi Arabia will decide it does not want to get extra oil to market. Historically, the Saudis have always acted as the market’s guarantor of last resort. During the Iran-Iraq war, for example, they stepped into the breach and increased output to smooth prices. As they intentionally keep a whopping 3m bpd or so of spare capacity to hand, their country alone can easily compensate for the loss of Iraq’s current output.
But the Saudis do not like the way the Bush administration is setting about Iraq. The regime also faces great anger on the “street” for its cosiness with the American government. Add to that the Saud dynasty’s precarious grip on power, and the ruling family might find it politically impossible to crank up production to help the Americans. The result could be chaos in the world markets, and OPEC left firmly in control.
Another reason to doubt that an invasion would kill off OPEC is the state of Iraq’s oil infrastructure. Thanks to a dozen years of UN sanctions, and many more years of mismanagement and over-exploitation, the country’s petroleum industry is in pitiful shape. Even in its best times, the country produced only 3m-3.5m bpd: a third of Saudi Arabia’s peak and half of Russia’s. As one American oil executive says, “Under the very best scenario, Iraq might manage that peak again.” To do better, the country would need massive investment from the world oil industry.
Expect no miracles
That, says the same senior oilman, will be slow in coming until companies are sure that the new regime will be stable and will respect the rule of law. Realistically, experts say, it will take Iraq perhaps five years of hard work, western know-how and big money to turn its oil industry into a serious force again. CERA puts it bluntly: Iraqi output can only increase from today’s low levels, but that does not mean “a massive, rapid increase in production that will depress prices, displace other Gulf producers and render OPEC impotent.”
In short, a “regime change” of the sort that Mr Bush has in mind for Iraq might rewrite all the rules of the oil game—on paper. The president’s new friendship with Mr Putin also heralds an important change in the geopolitics of energy. In practice, however, the second Bush to take on Mr Hussein will probably be long gone from the White House before the oil markets are transformed by Iraqi oil. Don’t write off Saudi Arabia, or OPEC, just yet.
By: Geforce - 14th September 2002 at 21:03
Scooter;
<< Maybe because your a spoiled 18 year old something that thinks that knows it all? >>
I’m sorry to inform you but I’m not a spoiled 18 year old something. My father died when I was two years, so at home, things weren’t always that easy. I had to take care of a lot myself, my mother was too busy trying to earn the money. So next time you insult somebody, please get to learn the person first. And don’t come with the “Sorry, I didn’t know that”-crap, I won’t buy it.
Anyway, I asked a question, you didn’t answer it. Why is the US so concerned about a possible Russian military intervention in Georgia, while it got all support for their war against terrorism in A’stan^, using the “You’re with us or against us”-doctrine.
<< Than I would say that “most” Europeans and the rest of the World for that matter support the US view! >>
I’m sorry but I think it’s you who don’t know what you’re talking about. First of all the public opinion in Europe is not the public opinion of the rest of the world. A military intervention backed by the UN still seems to be acceptable amongst many Europeans, but I doubt the Arabs think that way.
Anyway, read some of the pan-European press and it will get clear. And not only BBC World, but also the French and German press (http://www.fr-aktuell.de/) (http://www.figaro.fr/)
Ipso facto.
<< So, unless you can prove that most Europeans countries are puppets of the United States or that there leader place no thought in what the majority want. >>
In some cases, yes. I’ll give you the example of Berlusconi (Il Duce), both the PM and minister of foreign affairs in Italy (didn’t know one could combine that job). Today, Thousands of protestors demonstrated against him, but Silvio doesn’t seem to care. In fact, his parliamentary majority just voted a new law which will make it impossible to prosecute him during his years in office. He also fired all judges from the suppreme court (so much for polarity), sended home the top of the RAI (state TV) and replaced them with his own people.
Now you say what has that to do with Iraq? Well, I think many leaders of democratic countries don’t seem to care anymore about what their people think. Not only in the US or Italy, I can give you some examples of my own country. Since 9/11 freedom has been restricted in a lot of countries, including Europe and North-America.
Some people might call this “Real politik”, I think it’s an assault on democracy.
By: Arabella-Cox - 14th September 2002 at 20:21
RE: Iraq : who’s in?
Abhaey- Oil has little to do with Americans interest in the Middle East! As a matter of fact the US only gets about 10-12% of its oil from that part of the world! Which, is and even a smaller percentage when you take into account that 50 % of America’s oil is produce domestically. Most of the Middle Eastern oil goes to Europe and Asia…………So, oil has a much bigger effect “politically” on Europe that it ever has on the US!!!! Many believe some in Europe are reluctant to support the US in a war with Iraq for economical reason and how a war could effect there oil supplies! (i.e. economies)So, the next time you try to play the oil card check your facts first! If, you want to blame oil on someone just look in the mirror. You may find a picture of your country looking back at you! Look at who’s calling the kettle black……..really!
By: Arabella-Cox - 14th September 2002 at 19:55
RE: Iraq : who’s in?
Geforce- As usual you have no idea what your talking about! You surely don’t know what “most” Americans think. For that matter I am not sure if you know what most Europeans think either. Maybe because your a spoiled 18 year old something that thinks that knows it all? I could spend hours wasting my time arguing with you. Though, it would be a complete waste of time! I’ll just say this…….When and if a war comes with Iraq most of the World and Europe will be with the US. So, unless you can prove that most Europeans countries are puppets of the United States or that there leader place no thought in what the majority want. Than I would say that “most” Europeans and the rest of the World for that matter support the US view! If, the US goes it mostly alone I will be happy to eat “crow” as us American say! Though, I doubt the I will be the one eating anything……….