- 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.
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- 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.
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- 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.
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- 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:
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- -- 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.
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- 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.
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- 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.
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- 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.
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- A couple of examples from today's Bloomberg newswire
are:
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- "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.'''
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- 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.
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- 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.
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- 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.
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- 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.
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- 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."
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- 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.
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- *****
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- 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.
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