The Real Oil Arguement


#1

So we all know it’s about oil, but what is the underlying motivation in dollar and cent terms.

Currently, as a result of UN sanctions, Iraq is the world’s 9th largest producer of oil. It sits on known reserves slightly less than that of Saudi Arabia and is estimated to have twice Saudi Arabia’s reserves as yet untapped.

The US predicts that a successful invasion of Iraq will allow it to take over oil production in Iraq’s oil fields. This will have a dual benefit. The first being the insurping of French oil giant ELF and installing of US and British Oil interests. But this is small fry compared to the benefits expected from the collapse in the oil price. The US estimates that a fall in oil prices from 25 USD/Barrell of Brent crude to 19 USD will raise US GDP by 75 Billion dollars a year.To put that in perspective that’s a gain of the entire New Zealand or Phillipines economy per year in extra income.

The more likely outcome is a price well below that of 19 USD per barrell as running Iraq’s current oil fields at full capacity would place them 4th in world production. This would give the US cartel breaking capacity and control over the world’s oil production and price. The price of oil under such a scenario could fall as low as 9 USD per barrell or lower. The wind fall profits for the US economy are stupefying at this price as was the case in the late 90’s.

This is the critical issue here. Support from Middle Eastern Oil producing allies will never be forthcoming under this scenario, they stand to lose all. Most of these States were under huge pressure when the price of oil was low in the late 90’s just to stay in power. It is a brilliant strategic move on the part of the US administration and that is why it will go ahead no matter what people feel about it.

In fact, it really is a rounding out of what Bush senior started. He at that time was concerned about the the invasion of Kuwait and Saddams desire to take over Kuwaiti oil fields which were producing oil at such a rate of knotts the price of oil was falling to historically low levels. Saddam’s concern then and it was a legitimate one (as legitimate as the US’s current concern) was that he was losing between 6 and 7 billion dollars a year in the State coffers as a result of the crappy oil price.

If you think it’s about weapons of mass destruction then there’s this bridge I’ve got for sale in Sydney Harbour. I think you’ll really like it.


#2

Oh god, this is getting so tired and old. Why start a new thread about the same old shit? Oil, money, power. Bush wants it so he’s going to have it, so why bother with all this hot air?


#3

Well Sandman thanks,

That kind of cynicism “Bush wants it so that’s what we get” is about as low and pathetic as the human spirit can get. My advice to you is give away Segue and segue your way into a life cause if you care just that much to make a post that means just that much than really you should consider some slightly more enterprizing pursuits.


#4

Sure he’s a cynic but he’s got a point about a topic that’s already been thrashed out to its death. :x


#5

Thank you, Sodom. We already have an Iraq invasion thread that covers this topic (and covers it and covers it…). Enough, already!

I’m not a cynic … no, wait, when it comes to US policy, I am most certainly a cynic … I’m just sick of seeing the same tired old arguments, slights and slurs going round and round ad nauseam.


#6

Don’t read it.

Sandman,

Who cares what you are sick of really? If you don’t like it get together with your moderator buddies and have it removed or moved. Otherwise just don’t bother to waste you precious time commenting on things you couldn’t give two hoots about.


#7

If you had bothered spelling the thread topic correctly, your post might have some credibility. However, you didn’t, so it doesn’t.

Also, you might want to reconsider the spelling of words such as insurping, barrell, enterprizing, and Phillipines. Your atrocious spelling reflects poorly on your written contributions. :smiling_imp:


#8

Can’t argue with the facts, so argue about the spelling mistakes, eh Stickler?
I wonder if forums like this had been around in Hitlers time, what would we now be saying about posts like Sandman’s and Stickler’s? Now that I think of it, what will people say in 60 years time after Bush sends in his storm troopers and takes over the oil fields? Let’s hope he gets his ass kicked and it doesn’t happen anyway.
Anyone catch the news today on the massacre of Afghan POW’s in US controlled area?


#9

uh, how can one argue with facts where the original post was full of tired theories that have been regurgitated 100 times before? let me guess, someone read an article regarding the “oil theory” and decided to start a new topic on it to make himself feel like he’s brilliant for pointing it out. i assume that’s where you got those oil numbers from…unless of course you’ve been analyzing commodities pricing and the macroeconomic impact of market changes on the world economy yourself. :unamused:

and busting out the hitler comparisons already, 54? a tad early, don’t you think? shouldn’t you wait until someone actually bothers to disagree with you before you degrade them with a hitler reference?

you DO realize that sandman is not exactly a pro-us lackey, right? but of course, he’s a nazi because he had the audacity to point out how pointless this thread is.


#10

I believe I referred to Bush as Nazi-like, not any of the posters on here.


#11

As a former petroleum landman, I would say that there are many flaws in the argument for lower oil prices should the US invade Iraq. Prices will, in fact, rise.
The following is a link that, although quotes a rather odd source, is typical.
I’d write more, but apparently this thread has been thrashed to death elsewhere, so I will stop.

www.telegraph.co.uk


#12

US$75bn… uh-huh.

So, roughly equivalent to a fall of 1% in the S&P500.

In other words.

SO WHAT?


#13

Quite right Flipper. The article I read was a lead article in the Australian Financial Review making the oil arguments as they saw it. I would have posted the link, but couldn’t find the article when I went to search for it last night so I thought I’d rewrite it myself again.

Sorry for the spelling errors Stickler baby, I’m sure you wouldn’t of had to suffer them had you read the article in the AFR.

Perhaps Sandman, Soddom and co. ought start writing off to CNN, The Guardian, The Wall Street Journal and any other imaginable media outlet and letting them have it.

You sqealling sissies. How pathetic is it to be policing threads and making brain dead comments like, “What a waste of a thread!” as if there were to be no more space left in cyber space. No wonder Bushy babies got it over you babies. You poor little fellas.


#14

Nice one, Fox. I bow before your superior wit and sparkling intellect.

What’s the matter, Fox? Why the childish whining and personal slurs just because someone doesn’t agree with you? It makes you sound almost as half-witted as that warmongering prick in the White House!


#15

Thanks Sandman,

I graciouly accept. (I hope I got the spelling right there) And what’s more this argument is becoming so silly and slippery we could well be having the real oil argument.

And also dastardly the way you went back and edited that whimper above.

Hey why don’t you use that google search field to answer my “Who said it?”


#16

And that’s another thing. I couldn’t find it :blush:

I bet you chose it on purpose just to make me look bad. :imp:


#17

Never mind lets just kiss and make up. Hey but I’m still not having a bar of that Soddom. Are you?


#18

I find flawed the argument of the original poster that Bush wants to invade Iraq to get cheaper oil.

Specifically, the poster says oil production will be increased after the US takes over Iraq, thus lowering prices and giving a boost the US economy.

First, oil prices are high now because of the fear that the US will invade Iraq. The price for November delivery was US$30 a barrel as of Monday. Analysts say this ``war premium’’ is anywhere between US$5 to US$10 a barrel. Clearly the war premium could be reduced if the US were to do one of two things: A. Announce that it has no intention to invade Iraq or B. Invade Iraq and get it over with as soon as possible.

Why doesn’t Bush just call off the invasion if that also leads to cheaper oil? That would get the benefits to US GDP as claimed by the poster. Keep in mind that we have been paying this war premium only because of US saber rattling in the aftermath of Sept 11. So perhaps the US has other reasons to invade Iraq other than oil.

The poster also forecasts that increased production from Iraq will lead to prices as low as US$9. I find it difficult to argue with that forecast, given that the poster fails to say just how many additional barrels of oil would be put on the market.

How much is produced now and what would be Iraq’s share of the market after US invasion? The poster never says, but expects you to believe that with Iraq’s oil on the market prices would fall from US$30 to US$9 a barrel.

Even if you factor out the war premium, the poster would still have you believe that additional output from Iraq would lead to a 50 percent drop in prices. Although increased output would definitely lead to lower prices, I doubt it would cut oil prices by half.

Finally, the poster says Bush Sr also invaded Iraq because of the desire for cheaper oil. A little market history: Before Saddam invaded Kuwait, prices were below US$16 a barrel. Prices then climbed to more than US$38 a barrel.

But the boycott of Iraqi and Kuwati oil doesn’t explain the more than doubling of oil prices. The reduction of supply – ie market conditions – couldn’t account for the huge increase in prices.

What does is the war premium. After it became clear that the war would be quick, prices fell to about US$20 a barrel – even in the absence of Iraqi and Kuwati supply.

Simply put, I don’t think the US wants to invade Iraq to increase oil supply, because the economic benefits of doing so would be limited. Clearly, the costs of invading Iraq – as someone else on this thread has already noted – is higher prices, at least in the short term until it becomes clear that the war will be over.


#19

Yawn :shock:

Only half a dozen replies and most of those typical Segue finger pointing and catty remarks.

Conclusion: Sandman’s first response was right.


#20

[quote=“stickler”]
Also, you might want to reconsider the spelling of words such as insurping, barrell, enterprizing, and Phillipines.[/quote]
How do you spell ‘insurping’ then? Couldn’t find it in any dictionary…

Sorry

Oh, maybe Fox’s idea is that Bush has a long-term plan up his sleeve to drop the price of oil by increasing Iraqi output, after the dust has settled, with the his hand on the pump?

I don’t think he has that much foresight. But, frog’ods sakes don’t mention it to any firkin aides.