1. Demand for OPEC oil is down and 2. OPEC is facing a price war. First, why is demand down across the world for OPEC oil? Yes its true the US is producing more of its own oil than it has in 70 years, however, this phenomenon by no means diminishes US dependence on foreign oil, particularly Middle Eastern oil. She mentioned Iraq as producing upwards of 40% more oil than ever before but she failed to mention that Iraq, whom the US gets as much oil from as they do from Saudi Arabia, is not a member of OPEC. And no country, especially Saudi Arabia is about to cut production. They care too much about their market share. The Saudi government is barely capable of maintaining its legitimate claim to rule over an increasingly recessive economy and rising unemployment. Saudi Arabia is a tender box for the match of social revolution, which would ultimately oust the royal familys iron-clad grip over the population. They cant begin to entertain the thought of cutting production. They need their customers and they need to ensure that the other OPEC nations, namely Iran and Venezuela, who poses the biggest threat to Saudi dominance of the global oil market, doesnt move in on Saudi Arabias customers. Saudi Arabia has to adjust to world demand. They are not in a position to exercise any authority over the global supply of oil. And yes, they are bitterly engaged in a price war to maintain their position at the top of the OPEC supply chain. Aside from this, Saudi Arabia no longer hosts the worlds largest oil reserves as it has throughout the last century. The single largest oil reserve on the planet was discovered in 2012-2013 in Australia, a Western ally. As far as Europe is concerned, their economies are still reeling from the Euro debt crisis, a weakened currency, corrupt central banks that conduct illegal and extremely lucrative investment deals with Ukrainian oligarchs and other East European gangsters. Europe is therefore too broke with some countries such as Spain, Ireland, and Greece currently facing over 50% unemployment and a potential national default on their sovereignty. Such economic conditions are the reasons behind the rise in right-wing fascist organizations threatening the social and political climate in Greece today. I hope I at least attempted to explain Europes drop in demand for oil on the global market. China, its true, has reduced its demand for OPEC oil, however, the news anchor didnt bother to even attempt to offer any word, let alone explain, Chinas reduced dependency. One reason for Chinas drop in demand for OPEC oil is that the Chinese are heavily investing in eastern and Southern Africa and literally transforming new economies overnight with Sinopec and PetroChina embedded in African oil industries which is fast becoming a faux Chinese colony, especially in areas like Sudan. The Chinese presence and influence in this region is one reason why the Darfur atrocities from rebel guerrillas and para-military armies displacing and killing masses of people is turned a blind eye to by the rest of the world. Everyone needs and competes for Chinese markets for cheap labor, products, and manufacturing hubs for foreign trade, investment, and the movement of industries, mostly western, to Chinese soil. Thus, regional genocide takes a backseat to international business. The point is that China has a reduced policy, part of the 5 year plan, to not fall victim to over-dependence on OPEC oil, as such dependence has tied the US to the middle eastern region not only economically but militarily as well, which has wreaked havoc on much of the US economy and dictated US foreign policy in the region for the last 40 years. Plus, regarding Chinas oil consumption, production, and importation, China is looking elsewhere, to Russia for natural gas and Chinas neighboring states and coastal waters for increased offshore drilling projects. away from the Middle East. The entire Middle East is a hot potato that nobody wants to burn their hands on. Its too unstable politically, socially, and the state of perpetual war is bad for business. Plus, nobody wants to be pushed around by OPEC. Ultimately, the world is cutting back on OPEC and Middle East oil dependence, exploiting more of their own domestic supplies or their neighboring country supplies or are simply investing elsewhere, because, investment in industries is a long-term commitment and the status of power and control changes far too drastically in the Middle East where the majority of OPEC countries are located.
Posted on: Sat, 27 Dec 2014 10:12:52 +0000
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