|| -----Original Message-----
|| From: Doug Henwood
||
|| Chris Doss wrote:
||
|| >Hmmm. How's the US gonna control Russian oil (second-largest
|| supplier after
|| >SA)? Put baes in Vladikavkaz?
||
|| What kind of "control" are we talking about, anyway? I think Cyrus
|| Bina is right - that oil has been thoroughly commodified, with prices
|| set by spot and futures markets, and all the old mechanisms of
|| control (the Texas RR Commish, OPEC) withered or withering. And as
|| for the physical flow - what does that mean? If the U.S. wanted to
|| deny some country oil imports, it could blockade its ports or bomb
|| the pipelines.
||
|| Doug
Saudi fixing of oil pricing isn't what it used to be since Saudi gave up being a swing producer in 85, but with a quarter of world reserves, and the highest quality, lowest cost product on the market, it still packs quite a wallop, as witnessed by the latest faceoff with Putin which ended with Russia partly bowing to OPEC pressure to reduce output. Saudi can usually win a price war with any competing producer. The US occupation of Saudi and the embargo on Iraq mean that US oil conglos get first say about Saudi oil policy, and Iraq can't use its huge reserves to rock the boat.
With oil imports carrying such a huge ticket since 73, US and G7 pressure to conform oil prices to economic policy is a matter of course.
After determining the price - in US $, which only the US can print and others have to work for - comes the question of what happens to all the Saudi profits. Having Iraq as an enemy encourages them to buy arms, and the US occupier makes sure most of those come from the US. The US also builds and runs bases, trains the Saudi troops, trains security and intelligence staff, etc. When Saudi still had a current account surplus, that was being used by the US as well, to finance the deficit.
This is pretty much the fate that awaits Nursultan Nazarbayev, as he lets the US military in to "protect" him against wahhabist rebels, who become all the more rebellious for it. The Enduring US bases and accompanying CIA stations popping up in Central Asia are signs that the emerging oil dictators are being roped in one by one to be milked.
Bina is really naive for believing that all those US bases and CIA staff are simply passive spectators of the oil market and don't have their hands in the till. The oil market is basically a big pile of cash that the US plunders.
Hakki