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Old 05-22-2008, 01:31 PM
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Default Oil Politics | Oil Price Hits Record High

The price of oil has more than doubled since a year ago, hitting a record high of over $135 a barrel. The stockpiles in the US are falling; this and the downward trend of the US dollar are factors leading to the increased prices.

All countries consume oil, but only some produce the commodity in significant quantities. The U.S. is, I believe, the world's largest consumer, followed by other Western countries. The largest producers are the OPEC countries. OPEC is the Organisation of Petroleum Exporting Countries and consists of 11 members, who account for more than half the world's crude exports.

Most of the OPEC members are in the Middle East, including Iran, Iraq, Libya, Saudi Arabia, Qatar and the United Arab Emirates. With the exception of Venenzuela, the other countries (Algeria, Indonesia and Nigeria) are Islamic states or have large Muslim populations.

The West wants cheap oil, and feels that OPEC is squeezing for higher prices by limiting production and acting as a cartel. The OPEC countries in fact depend heavily on oil. "When the price falls it creates real pain. They have to feed and give welfare to their people, the same as Western countries," says Tony Scanlan, of the British Institute of Energy Economics.

So the scenario is that this one major commodity divides the West from the Middle East, the non-Islamic from the Islamic nations.

Some believe that oil politics underlie the overthrow of the Taliban in Afghanistan, though the invasion was triggered by 9-11. And had Iraq not invaded Kuwait over the latter's over-production of oil, leading to the Gulf War in 1990, and the strained relations with the U.S. thereafter, the invasion of Iraq might not have happened.

When one thinks about it, it seems politics finally comes down to fighting over food and fuel. All the other high-sounding principles - human rights, social welfare, education, justice and so on - may be no more than rationalisations of or derivatives from the primal struggle. And this is so between countries, and domestically within nations.

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