SPEAKING
FREELY US
throws itself over an Iranian
barrel By Ardeshir Ommani
Speaking Freely is an Asia Times
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Risks to global oil
output, once confined to Iraq and Syria, are now
spreading to Africa. Recent Intelligence data show
that the inventories are low and the Saudi Arabian
promises to make up any shortfall are in question.
The state of oil supply is reflected in
the price difference between the prices for
immediate delivery and the contracts for longer
delivery dates. The short-term oil contracts for
Brent crude has jumped $7 a barrel this month to
more than $118/bbl and on Feb. 15 it rose to as
high as $120/bbl. From all signals sent by the
international oil market,
the US plans to limit Iran's oil revenue by
pressing the European countries - especially those
suffering from debt crisis like Spain, Greece and
Italy - to boycott the purchase of the Iranian oil
will be neutralized by higher prices. The shortage
of oil supplies has pushed the prices so far up
that higher oil prices are compensating for lower
amounts of oil sold.
According to a
commodity analyst at Citi, "There is little
redundancy across the whole system: inventories
are really low, and there is low spare capacity
and supply risks…" The tightness in oil supply is
primarily caused by the US war drive and
interference in the domestic affairs of other
countries. The damage is felt not only by the oil
producing countries but also the European
countries in recession and the consumers in the
developed and developing countries through higher
prices at the pump stations and heating their
living spaces, not to mention the commercial
enterprises.
The US and North Atlantic
Treaty Organization helped to break Sudan into two
parts. Currently, South Sudan is engaged in a
dispute over transit revenues with Sudan which
deprives the market of about 300,000 barrels per
day. The US invasion of Iraq damaged that
country's oil installations pipes, ovens and
refineries. Today, Iraq has a production and
refining capacity less than half of what it was
before the US invasion.
In Yemen, the US
and Saudi Arabian military intervention and the
resultant support for the ancien regime has
blocked the path of a revolution that could see
the establishment of a people's democracy and the
wheels of the economy put back in motion. The
foreign powers imposed civil war in Yemen, along
with labor strikes halting oil output at the
country's oil field at Masila, where total
production has fallen drastically.
In
Syria, the political condition is aggravated by
US-Gulf Cooperation Council's intervention and oil
exports are blocked by Western-imposed sanctions.
While the Western oil corporations have rushed to
plunder Libya's oil wealth as fast as possible,
its oil production and exports remain way below
the pre-conflict levels.
According to
Barclay's Capital calculations the social unrest
in Sudan, Yemen and Syria put together curtails
over one million barrels a day of output - or 1%
of global supply - from the world market. All this
is compounded by the looming US European sanctions
on Iranian imports, which will deepen the chronic
recession of the European economies by depriving
them from 600,000 barrels a day of crude oil.
In addition to receiving higher prices for
its oil, Iran will be able to find alternative
buyers for the majority of those barrels. To show
its animosity and destructive power, the US
political pundits used to say that the upcoming
US-EU sanctions will force Iran to sell its oil at
a discount. But it seems Iran not only is not
forced to sell at lower prices, but on the
contrary is being freed from some long-term
contracts, enabling Iran to begin selling the
barrels at the spot for higher prices. It seems
once again, the US has shot itself in the foot.
Goldman Sachs in a current research note
writes that OPEC spare capacity is "approaching
dangerously low levels" and this condition is
reaching dominance "just as world economic growth
is beginning to strengthen." Such a situation
would make the world oil market increasingly
vulnerable to sharp price hikes in 2012. Could it
be that in the wake of US imposition of the latest
sanctions on Iran, the Saudi Arabian assurances
that it possesses the spare capacity to make up
for the shortfalls was simply a bluff whose
function was to make the task of passing the
Congressional resolutions 'a walk in the park'.
The path of least resistance for prices is still
to the upside", says Barclay's Capital.
Pursuing its own strategic and geopolitical
interests, the US pressured the European
countries, especially Portugal, Spain and Greece
to impose sanctions on their importation of
Iranian crude oil. To show that the US, the United
Kingdom and France are not the only countries that
can carry out pre-emptive strikes, the Islamic
Republic of Iran decided pre-emptively to shut
down its oil export to the most aggressive
imperialist countries behind the US: Britain and
France. To deceive the European and American
public, US and British publications began
immediately spreading false data with regards to
world oil supply and deliberately underestimated
world oil consumption.
While the oil and
gas stock markets told sharply different stories,
the pundits tried to blame Iran and not the
shortage in supply for higher oil and gas prices.
Furthermore, they connected the story of oil and
gas to Iran's civilian nuclear industry, confusing
the American and European public as to the real
causes for paying higher prices at the gas
stations.
Ardeshir Ommani,
president of the American Iranian Friendship
Committee (AIFC), is a writer and political
analyst with a background in Political Economy.
AIFC was created in 2004 to promote peace and
dialogue between the US and Iran, and prevent any
NATO instigated war on the Iranian people.
Speaking Freely is an Asia Times Online
feature that allows guest writers to have their
say.Please
click hereif you are interested in
contributing. Articles submitted for this section
allow our readers to express their opinions and do
not necessarily meet the same editorial standards
of Asia Times Online's regular contributors.
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