The Price of Oil (and thanks, Jim H)

Henry C.K. Liu hliu at
Tue Dec 29 17:10:03 PST 1998

Check out a BBC report on Iraq oil smuggling through Turkey. There are all kinds of reasons why Clinton bombed Iraq, oil prices is very low on the list. If Iraq oil re-enters the world market, OPEC will reduce production quota, so the real impact on prices would be minimum, most market analysts estimated the price movement to be less that one dollar. Many of the Arab producers will curb production and make up the loss of revenue from a reduction of under the table aid to Iraq. There is no price economics in oil. It all politics.

Henry C.K. Liu

DamonMac at wrote:

> Henry Liu,
> If Iraq were allowed to sell oil on the open market, don't you think there
> would be a harmful collapse in prices? Isn't Iraq only second to Saudi Arabia
> in the amount of oil it has? You can't buy the administration's line about
> preventing Saddam from acquiring equipment to build weapons of mass
> destruction. This may be a part of the sanctions policy, but at most a minor
> one. You think keeping the embargo in place has NOTHING to do with the
> current low price/barrel? I know this sounds sinister (that 6-7,000 children
> must die a month to keep oil prices stable) but I think this may part of the
> reason for the sanctions. One of the main reasons Russia is having problems
> is because of low prices, and there has been near panic about Primakov and
> crew in the media and elite circles (calling him a "spymaster" and a
> Communist). Elites must be just as nervous about Saudi Arabia where there are
> anti-American Islamic fundamentalist challenges to the monarchy that could
> gain even more prestige in the public eye if the country starts suffering from
> a further price falls. The political instability argument is a legitimate
> one.
> Damon Mac Fodge

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