The Price of Oil

Iraq oil embargo serves the interests of both US business and Saddam Hussein
opinion by Ruth Wilson

The price of crude oil climbed dramatically recently, briefly reaching a high of $34 a barrel this March, sending fear into the hearts of Humvee owners, and glee into the bellies of the big oil companies. No one proposed ending the oil-embargo against Iraq as a solution to the problem of worldwide under-supply, certainly not Energy Secretary Bill Richardson. Before he was last reshuffled, he served as American Representative on the United Nations Security Council, where it was his job to continue the sanctions against Iraq.

If Iraq was allowed to get back on its feet and pump oil freely, it could easily provide the extra two million barrels a day that Richardson telephoned OPEC to request on March 29. The crude oil reserves locked in Iraq are second only to those under the sands of Saudi Arabia, but one country suffers, so that the other can profit, together with best buddies Kuwait, United Arab Emirates, Britain and the U.S.A.

Keeping Iraq's oil flow down to a trickle is working fairly well. The Iraqis get a little food and medicine, which they should be grateful for. They should stop whining that 30 percent of their money is being taken to pay war reparations to Kuwait, corporations, and others. After all, they're lucky to get anything at all. Saudi Arabia and other U.S. satellites benefit by exporting more oil, and earning more petrodollars, the bulk of which they promptly dump into American and British banks and companies.

With Iraq partially out of the way, the Saudi rulers and their allies hold a bigger slice of the OPEC pie, and can exert more leverage over oil prices. This means to a first approximation, that Saudi Arabia can choose to send the price of oil either up or down depending on the needs of corporate America. When the Asian crisis of '98 hit, Saudi Arabia cut back on oil exports and persuaded other countries to do the same. Thus, the price of crude oil crashed to $10-$15 dollars a barrel. The reason presumably was to give Japan, and other Asian countries, which pay heavily for oil imports, a chance to recover economically. From the point of view of the oil companies, and the host of corporations who feed at the Saudi trough, of which Citibank is one example, higher oil prices are good, so long as they don't reduce consumption.

One can speculate that the reason for letting prices rise this February was simply to test the waters, to measure directly how high the price of oil can go before it begins to slow the U.S. and the world economy, and lessen demand.

Meanwhile the U.S. continues to bomb Iraq virtually every week, in a long-running campaign to kill random civilians, and terrorize ordinary Iraqis into thinking that Saddam Hussein is on their side. Readers of the Washington Free Press are familiar with the evidence that the United States has repeatedly supported Saddam since the Gulf War, and that he, in turn has been helping to prolong the oil embargo. At some point Hussein might move to end the UN "oil-for-food" deal, thereby restoring essentially all of Iraq's oil quota to its rightful owner Saudi Arabia, and ensuring even greater profits for corporate America, and renewed hunger in Iraq.