That looks like a tremendous spike between '90 and '91 – do you know what precipitated the drop?
Oh, just to be clear, I didn’t mean to suggest that if all was flowers and perfume in the buildup/post invasion strategy, gas would be $2.00. Nor suggest that India’s and China’s demand wouldn’t still be affecting the price, nor that the increase in prices is directly due to the invasion.
I am suggesting that if things went better in the pre/post stages of the war, we (and by including a large diplomatic effort in the pre-war stages, I mean the West) would be in a much stronger bargaining position than we are now.
Look at it pragmatically based on what we know of the administration, OPEC, and how things just work out there. One factor (of many) in the price of oil is the cartel’s artificial restriction on supply. Pardon my right wing-sounding terminology, but breaking the will of the cartel to keep production at a certain level is one possible path away from high prices. (Note, whether that’s a good thing environmentally or strategically is a different story–I’m going on the simplified notion that lower prices are good.) My question/suggestion was that with two or three, er, ‘aligned’ countries, working against the influence of others would have been much easier. Not having squandered the good will would have made preventing coalitions of very different nations easier to do. Again, think diplomacy.
If the Iraqi war had been the driving factor behind world oil prices, the price would have peaked in 2003 and would now be coming down. Here is a graph of Iraqi oil exports over the last thirty years. Note the trough in 2003 (in the immediate aftermath of the invasion) and subsequent rise.
The graph ends in 2006. Since then, Iraqi exports have risen dramatically, mostly due to better security, and now exceed pre-war levels.
Of course, in comparing this to what exports would have been without the invasion, we are making a guess. We can’t know how Saddam Hussein would have behaved in the meantime, how the UN might have modified sanctions, and how successful Saddam would have been in evading the sanctions. (more evasion=lower prices). Saddam’s record wasn’t one to inspire optimism, since he was responsible for two of the most calamitous disruptions in oil industry history (the Iran-Iraq War and the Kuwait invasion).
In any case, Iraqi exports account for only 2 million barrels per day, relative to world consumption of 87 million barrels per day. Looking at the graph of world consumption on the linked page, one cannot escape the conclusion that the driver behind higher prices has been higher world demand.
I’m thinking you’ve confused Argentina with Venezuela. I also think Americans have enough problems at home that they could work on first instead of hatching up schemes to kill the rest of us and putting us into their gas tanks.
I think you’re looking at the wrong metric. As you said, the output of Iraq’s oil industry doesn’t exactly have a grip on world oil prices. Rather than prices being driven by an objective rationalization of demand vs supply, I think a good part of the rise in oil prices is driven by the perception of instability not only in Iraq but many oil producing nations. If something is perceived to be at risk, the higher the risk, the higher the price.
So what risk am I talking about? There have been instances of Al Qaeda types promising attacks on Saudi’s oil infrastructure. More generally, I think there’s more concern about terrorist attacks on the oil supply chain. Some people are still worried about the situation WRT Iraq, Iran, and the US and the potential for conflict.
Then of course outside the Middle East, the African oil producing nations haven’t exactly been a model of stability and moderation, to say nothing of Venezuela.
I think these worries, which in the Middle East stem from the war, at the same time other oil producing nations have had problems, are generally perceived to increase the risk to oil supply, so prices have been driven up.
What, this isn’t a thread about the Falkland Islands? My bad. We haven’t been to war in South America lately, so my geography is a bit rusty (thanks Mr. Bierce) – I meant [del]Ecau[/del] …er… [del]Chil[/del] … Venezuela. Sorry 'bout the confusion.
Oh, and do note I personally think the invasion was a knuckleheaded idea in the first place. I don’t mean to suggest the above as a justification, but as the second greatest tragedy/missed opportunity of the whole thing.
This war was largely instigated by Project for a New American Century, and part of the PNAC plan is securing Iraqi oil as a reserve for us, and to deny it to China or any other potential rival. It didn’t work that well, because the Iraqis aren’t mindless sheep willing to submit to us.
The fact that the invasion was originally called "Operation Iraqi Liberation ( O.I.L. ) ? The fact that Cheney’s “energy task force” was studying maps of Iraq ? The fact that our troops bypassed armories ( and let them be looted ) in order to get to the Oil Ministry first ? The fact that we’ve been trying to pressure the Iraqis into handing over much of their oil income money to us ? Because the people behind it had been saying for years they wanted to grab Iraqi oil ? And as pointed out, we were told again and again that the war would pay for itself with oil money.
Everyone knows this war was largely about oil; it was obvious from the beginning. And all the denials aren’t going to convince anyone. Americans as a group may be greedy, amoral, ruthless, corrupt thieves and killers, but most lack the guts and self honesty to admit it, so we have denial of the obvious like this.
Why ? What makes you think Bush and Cheney and so on want to cut into the profits of their oil industry buddies ? High prices are what Bush and friends want; I’m sure they consider high petroleum prices a victory. A war for oil isn’t the same as a war for low prices.
If the US wanted to control the oil, it would have been much simpler and cheaper to simply purchase the crude and store it inside US borders. Crude doesn’t go bad, it pretty much sits there for millions of years until you refine it.
There’s nothing to stop the US government from buying large amounts of crude, that’s what we currently do with the Strategic Petroleum Reserve.
If you follow that logic, if the aim is to control the oil, then it makes no sense to spend a trillion bucks to try to control oil in a manner that is less assured of success than simply purchasing the oil.
Gas is $4.50 now because of short term thinking. People believe they can enrich themselves by voting for the guy who promises lower taxes. What they don’t realize is that the rich folks got most of the tax breaks. Also, the cost of wars devalues our currency, so we end up enpoverished.
The wise course of action would have been to follow a responsible fiscal policy and retire the national debt, but the last guy who did that was the “blowjob” guy and a lot of folks couldn’t stomach voting for someone associated with the “blowjob” guy, so now everybody has to suck it up and pay.
You’re confusing your pronouns there. When people say “we” invaded Iraq to control (not steal) the oil, they mean “we” the U.S. government and particulary the Bush Administration. “We” the people just went along with it, most of us, because the Administration had pumped up Iraq as a threat that it was not. But Administration’s goals had nothing to do with holding down the price of gas for the average consumer. Read the links in post #29, both of them.
What difference would it make if it was Iraqi oil or North Sea oil or whatever oil? As long as Iraq is selling into the open market, it benefits the consuming countries.
I’m going to go with…probably not $4.50 but probably not that much cheaper than it is today either. Perhaps gas would be hovering in the mid-$3.00 range instead of the upper $3-4 limit.
I think the US dollar was due for an adjustment regardless of Iraq, and that if we hadn’t invaded Iraq we may have been more forceful with Iran, which could have lead to the same kinds (or worse) perceived instability in the ME anyway…which is pretty much what is driving speculation atm.
It’s conceivable in fact that things could be worse today had the US really pushed Iran or perhaps decided to launch limited (or more than limited) strikes at Iran’s nuclear program…which we may have done had we not been bogged down in Iraq (and had the Iraqi conflict not been so unpopular).
The reason oil prices keep going up is that we put so many restrictions on the oil companies to keep them from drilling for new supplies. Lower supply always leads to higher prices. Likewise if we want prices to drop we have to increase supplies … or reduce demand…or both. It’s not that complicated.
I’m pretty sure that gas prices always go up in the spring and fall in the fall, and that’s because people drive more in the summer. Of course, this is great for the paranoids who see the price drop before the elections as confirmation of some great conspiracy theories.
But we didn’t want them to sell to anyone we didn’t like, and we wanted most or all of the profits for ourselves, not the Iraqis. The last thing we wanted was for anyone but us to benefit.
