Thursday, 8 March 2007

US Oil : Whither Middle East - Welcome Africa

Recently found Ghadames oil Basin shared by Algeria, Tunisia and Libya
(C) Image courtesy of Rigzone 2007

It is possible that KSA is in terminal decline for it's oil production. Mexico quite certainly is in terminal decline (due to Cantarell oil field crashing). USA imports a lot of it's oil from these two regions.

Where does it go for alternatives? Why does the rest of the world need to even care?

Because where US goes, a trail of bodies follow.

That place is now increasingly Africa. Africa has overtaken Middle East as USA's top oil sourcing region, all without big fanfare. It is of course nothing new, as US has been in African oil producing countries for decades: financing coups, funding insurgencies and corrupting officials. However, not until late last year did Pentagon found AfriCom, which underlines the importance of the continent for US interests.

Currently US is already well entrenched in various African oil countries:

The list of countries targeted for further activities are all oil countries:
  • Equatorial Guinea. UK already tried a coup there in 2003-2004 by using an SAS office (and allegedly financed by son of Margaret Thatcher of all people)
  • Sao Tome & Principe. Has been fairly stable, if not a model state, but has now been rumored to be sliding into further unrest and perhaps into civil war, because commercially viable amounts of oil is being produced there by US companies
  • Algeria. Already on Rumsfeld's hit list of countries to be attacked. Their crime? Sitting on top of a sizable new oil reserve that recently surfaced in public. Unfortunately oil does not follow national borders, so Ghadames Basin is shared by Algeria, Tunisia and Libya. Expect to see a lot of IMF/World bank convoys, Rice visits and additional American troops there "securing freedom and democracy."
  • Sudan (esp. Darfur). Sudan has oil too, but isn't letting US or even UN into their country, so US and its allies attack them black propaganda campaign to justify intervention. Not that there isn't a crisis in Sudan, but the motivation to get into Darfur is surely not humanitarian intervention. It's preventing China from taking all the oil.
The lesson in all this?

If you got it, we will take it. We being not only US, but depending on situation UK, France, China, Russia and a handful of multinational oil corps.

Not only because oil is vital for transport, but because US wants to ensure their economic and military position against the rest of the world, especially towards China and even Russia (and vice versa).

From US pov this is part of the new American century, which includes ensuring US dollar remains as the default reserve currency, especially through oil trade. In plain English: letting the rest of the world finance US debt driven spending which in normal fiscal terms would have been labeled bankrupt a long time ago.

So, if you have plentiful natural resources on which the super powers are dependent on, you are cursed for life, unless you are able to make shrewd deals like the House of Saudi was. Or if you possess nukes, after which you gain additional bargaining chip.

Resource curse is a real thing. It's just not understood by most economists, who tout the market fundamentalism fallacy and believe that free markets really operate in strategically important commodities, such as oil.

So, oil is more than just about keeping the wheels turning literally. It's about geo-strategic domination and economic power over other nations. In this great game, might makes right.

And if you think you as an European (or other non-American industrialized nation) citizen can wash your hands from this, then by all means do, but please stop consuming oil first. Current global trade, price of oil and much of the power of the financial markets rests on the ongoing exploitation of poor oil producing nations by the rich oil consuming nations.

We have blood and oil on our hands, even if we didn't pull the trigger or activate the pump ourselves.

The question for us to ask ourselves is: do we want this to continue and will we allow it?