BLOOD IN BEIRUT: $75.05 A BARREL

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Wed, 26 Jul 2006 04:23:15 -0400

" Greg Palast " <palast

Blood in Beirut: $75.05 a Barrel

 

 

 

 

 

BLOOD IN BEIRUT: $75.05 A BARREL

 

The failure to stop the bloodletting in the Middle East, Exxon's

record second-quarter profits and Iran's nuclear cat-and-mouse game

have something in common -- it's the oil.

 

By Greg Palast

July 26, 2006

 

I can't tell you how it started -- this is a war that's been fought

since the Levites clashed with the Philistines -- but I can tell you

why the current mayhem has not been stopped. It's the oil.

 

I'm not an expert on Palestine nor Lebanon and I'd rather not pretend

to be one. If you want to know what's going on, read Robert Fisk. He

lives there. He speaks Arabic. Stay away from pundits whose only

connection to the Middle East is the local falafel stand.

 

So why am I writing now? The answer is that, while I don't speak

Arabic or Hebrew, I am completely fluent in the language of petroleum.

 

More...What? You don't need a degree in geology to know there's no oil

in Israel, Palestine or Lebanon. (A few weeks ago, I was joking around

with Afif Safieh, the Palestinian Authority's Ambassador to the US,

asking him why he was fighting to have a piece of the only place in

the Middle East without oil. Well, there's no joking now.)

 

Let's begin with the facts we can agree on: the berserkers are

winning. Crazies discredited only a month ago are now in charge, guys

with guns bigger than brains and souls smaller still. Here's a list:

 

-- Israel's Prime Minister Ehud Olmert's approval rating in June was

down to a Bush-level of 35%. But today, Olmert's poll numbers among

Israeli voters have more than doubled to 78% as he does his bloody

John Wayne " cleanin' out the varmints " routine. But let's not forget:

Olmert can't pee-pee without George Bush's approval. Bush can stop

Olmert tomorrow. He hasn't.

 

-- Hezbollah, a political party rejected overwhelmingly by Lebanese

voters sickened by their support of Syrian occupation, holds a mere 14

seats out of 128 in the nation's parliament. Hezbollah was facing

demands by both Lebanon's non-Shia majority and the United Nations to

lay down arms. Now, few Lebanese would suggest taking away their

rockets. But let's not forget: Without Iran, Hezbollah is just a

fundamentalist street gang. Iran's President Mahmoud Ahmadinejad can

stop Hezbollah's rockets tomorrow. He hasn't.

 

-- Hamas, just days before it kidnapped and killed Israeli soldiers,

was facing certain political defeat at the hands of the Palestinian

majority ready to accept the existence of Israel as proposed in a

manifesto for peace talks penned by influential Palestinian prisoners.

Now the Hamas rocket brigade is back in charge. But let's not forget:

Hamas is broke and a joke without the loot and authority of Saudi

Arabia. King Abdullah can stop these guys tomorrow. He hasn't.

 

Why not? Why haven't what we laughably call " leaders " of the USA, Iran

and Saudi Arabia called back their delinquent spawn, cut off their

allowances and grounded them for six months?

 

Maybe because mayhem and murder in the Middle East are very, very

profitable to the sponsors of these characters with bombs and rockets.

America, Iran and Saudi Arabia share one thing in common: they are run

by oil regimes. The higher the price of crude, the higher the profits

and the happier the presidents and princelings of these petroleum

republics.

 

This Thursday, Exxon is expected to report the highest second-quarter

earnings of any corporation since the days of the Pharaoh, $9.9

billion in pure profit collected in just three months -- courtesy of

an oil shortage caused by pipelines on fire in Iraq, warlord attacks

in Nigeria, the lingering effects of the sabotage of Venezuela's oil

system by a 2002 strike... the list could go on.

 

Exxon's brobdingnagian profits simply reflect the cold axiom that oil

companies and oil states don't make their loot by finding oil but by

finding trouble. Finding oil increases supply. Increased supply means

decreased price. Whereas finding trouble -- wars, coup d'etats,

hurricanes, whatever can disrupt supply -- raises the price of oil.

 

A couple of examples from today's Bloomberg newswire are:

 

" Crude oil traded above $75 a barrel in New York as fighting between

Israeli and Iranian-backed Hezbollah forces in Lebanon entered its

14th day... Oil prices rose last month on concern for supplies from

Iran, the world's fourth largest producer, may be disrupted in its

dispute with the United Nations over its uranium enrichment ... [And,

said a trader,] 'I still think $85 is likely this summer. I'm really

surprised we haven't seen any hurricanes.'''

 

In Tehran, President Ahmadinejad may or may not have a plan to make a

nuclear bomb, but he sure as heck knows that hinting at it raises the

price of the one thing he certainly does have -- oil. Every time he

barks, 'Mad Mahmoud' knows that he's pumping up the price of crude.

Just a $10 a barrel " blow-up-in-the-Mideast " premium brings his regime

nearly a quarter of a billion dollars each week (including the little

kick to the value of Iran's natural gas). Not a bad pay-off for making

a bit of trouble.

 

Saudi Arabia's rake-in from The Troubles? Assuming just a $10 a barrel

boost for Middle Eastern mayhem and you can calculate that the blood

in the sand puts an extra $658 million a week in Abdullah's hand.

 

And in Houston, you can hear the cash registers jing-a-ling as

explosions in Kirkuk, Beirut and the Niger River Delta sound like the

sleigh-bells on Santa's sled. At $75.05 a barrel, they don't call it

" sweet " crude for nothing. That's up 27% from a year ago. The big

difference between then and now: the rockets' red glare.

 

Exxon's second-quarter profits may bust records, but next quarter's

should put it to shame, as the " Lebanon premium " and Iraq's insurgency

have puffed up prices, up by an average of 11% in the last three months.

 

So there's not much incentive for the guys who supply the weaponry to

tell their wards to put away their murderous toys. This war's just too

darn profitable.

 

We are trained to think of Middle Eastern conflicts as just modern

flare-ups of ancient tribal animosities. But to uncover why the flames

won't die, the usual rule applies: follow the money.

 

Am I saying that Tehran, Riyadh and Houston oil chieftains conspired

to ignite a war to boost their petroleum profits? I can't imagine it.

But I do wonder if Bush would let Olmert have an extra week of

bombings, or if the potentates of the Persian Gulf would allow Hamas

and Hezbollah to continue their deadly fireworks if it caused the

price of crude to crash. You know and I know that if this war took a

bite out of Exxon or the House of Saud, a ceasefire would be imposed

quicker than you can say, " Let's drill in the Arctic. "

 

Eventually, there will be another ceasefire. But Exxon shareholders

need not worry. Global warming has heated the seas sufficiently to

make certain that they can look forward to a hellacious -- and

profitable -- season of hurricanes.

 

*****

 

Greg Palast is the author of the just-released New York Times

bestseller, ARMED MADHOUSE: Who's Afraid of Osama Wolf?, China Floats

Bush Sinks, the Scheme to Steal '08, No Child's Behind Left and other

Dispatches from the Front Lines of the Class War. Go to

www.GregPalast.com.