President George W Bush made two(!) personal(!) Middle East “peace tours,” virtually back to back. Both more or less an ineffectual chaos resulting in a string of embarassments for US standing in the region. In addition to having as his primary peace message pressure to join US aggressiveness against Iran, both tours culminated in a begging session with King Abdullah for more oil. Both times President Bush walked away from King Abdullah with arms full of bling, looking like a rapper in a pawn shop, but both times not a drop of oil.
King Abdullah told President Bush that he is doing all he can.
Why then is the Kingdom suddenly able to increase oil output within the same month that he just rejected President Bush for the second time in a row?
Saudi King Abdullah, center, British Prime Minister Gordon Brown, right, and Chinese Vice President Xi Jinping, left, seen during the Saudi Oil summit in Jiddah, Saudi Arabia, on Sunday, June 22, 2008.
From The Times
June 16, 2008
Saudi Arabia increases oil output after UN pressure
Miles Costello and Leo Lewis, Asia Business Correspondent
Saudi Arabia has offered to increase oil production, as the world’s biggest oil exporter moves to address global fears that prices are spiralling out of control, it emerged yesterday. The Kingdom, an influential Opec member and a huge force in world oil production, is prepared to raise output by 200,000 barrels a day next month in response to requests from customers, according to Ban Ki-Moon, United Nations Secretary-General.
1 comment:
Increasing oil output is unlikely to appreciably affect the high gasoline prices we are experiencing, or even the price of oil. While the price of oil may be high, the cost of production is also high. This is because the dollar is experiencing a pronounced devaluation. Producers cannot give the oil away, i.e., sell it for less than the cost of producing it. The purpose of pummeling producing nations to increase their output is merely an attempt to divert blame from the real cause, a global collapse of currencies, led by the dollar. There is a rush to the doors, as investors exit dollars and put their money in commodities such as metals, oil and agriculture. While these investors are often called "speculators," they are just doing what any rational person would--attempting to hold on to the value of their assets.
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