THE BLOG

OPEC's Agression Against the World's Economy

Jun 08, 2011 | Updated Aug 08, 2011

With prices for oil at or over $100 a barrel placing into jeopardy the world's feeble economic recovery, OPEC's malign rendition of Hamlet -- to pump or not to pump -- boggles reasonable understanding. It brings into clear focus something rarely touched upon, certainly not by the oiligopoly, nor of course the OPEC cabal and its oil industry allies -- what are the reasonable boundaries of sovereign rights as opposed to sovereign responsibilities?

For the OPEC cartel to go through the contortions of whether or not to increase production when the price is already far beyond what they dreamed of just a few years ago, and given the damage this price is doing to the world's economy, bespeaks of a fundamental abandonment of sovereign responsibly. It is tantamount to laying landmines through the length and breadth of the world's factories, threatening its workers and its economic well being, all the while hiding behind perverse interpretations of sovereign rights as if those rights vested them with no responsibilities other than to maximize their return in the knowledge we were stupid enough to permit them to proceed unhampered and unchallenged.

Then to combine it with the consummate hypocrisy, reported as received mantra by an unquestioning and comatose press; such as that heralding Saudi Arabia, for one, had increased its production "quietly" by "200,000 barrels a day in May and is on course to produce another 200,000-300,000 b/d this month taking its output over 9 million b/d for the first time since mid-2008". Of course there's no mention of the Saudi propaganda in January that they stood ready to fill the shortfall of some 1.6 million b/d placed into jeopardy by disruptions in Libya. A feat they could easily achieve from installed production capability of more than 12 million b/d. This especially in the face of runaway prices of more than $20/barrel above the $75/80 barrel price Saudi Oil Minister called 'perfect' in December of 2009 or the earlier expressed goal of achieving a $75/barrel price, categorized as 'fair' by none other than King Abdullah permitting Mr. Al-Naimi to dub the then efforts to reach that price level as a "noble cause".

By the way in case you are doing your sums, that $20 over the "perfect" price is costing the U.S. economy alone some $400,000,000/day more being transferred to oil interests given a national daily oil consumption of near 20 million barrels/day -- that's money from people who can barely pay their mortgages if they still have one, to oil companies and oil interests who are racking up an endless string of record profits.

To listen to the Saudis and their friends in the press, they are doing the very best they can and we should all be thankful. The sham is preposterous, and yet they are able to game us again and again. It is time the OPEC cabal and its minions are held to account by those throughout the world who are the economic victims of its policies.