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by Alan Simpson

ComLinks Intelligence Magazine

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Oil Crisis Looms!

Washington, DC, Sept.15th, 2004 --- This time last year crude oil was at $26 a barrel. Today it is hovering around $48-$49 a barrel. Unless there is a windfall of supply it will break through the $50 a barrel before long.

During the invasion of Iraq I commented on the looming failure of the concept that the revenue from Iraqi Oil would be used by the United States to pay all the bills, and make a lot of Texans very rich.

The concept was flawed from the beginning as it envisaged the Iraqi population eagerly giving the US the rights to it's only natural resource, and revenue earner, and thanking them for the 10 years of crippling embargoes and enforced poverty through US sanctions.

The concept also relied on the production, and safe transit of a very volatile liquid, through a very volatile region and the ability of the US refineries to cash in on the windfall.

The Texas NeoCons forgot to factor in China and India. They continue to think of the world as one superpower and the rest as uneducated, third world countries who still burn sticks and charcoal.

But if you strip the production from US factories, and outsource it to China, and strip the IT, software and support infrastructure from US corporations, and send that to India, it stand to reason that they will need a lot more oil and natural resources to operate their new factories and technology based industries. Did the Texas NeoCons believe they would buy their energy from the USA at grossly inflated prices. China is not California!

On the ground the war, although fought brilliantly by the troops was a shambles of strategic planning by the leaders in the White House, and Pentagon.

Every leader in history has conquered a nation, then utilized their army and law enforcement forces to maintain order, enabling it to reduce the numbers of occupying troops required to maintain stability. For the benefit of the Pentagon Vichy France was not a brand of water, but a means of controlling a population under occupation.

The regional governors ensure contracts are handed out to keep local businesses working, and to make the population see the benefits of working with the occupying power.

VP Dicky on the other hand wanted Haliburton to do it all. Screw the Iraqis!

The war was being fought on the potential of sales from high jacked oil, and the dream was that the profits from Iraqi Oil flowing through Texas pipelines would offset the cost of the war, and pay down the huge debts incurred up front in this Texas Get Rich Quick Scheme.

The other OPEC countries, especially the Bush Buddies of Saudi Arabia told the world, or to be more exact US TV News, they would increase supply and keep their prices down, even lower them to below $35-$40 a barrel. Right, and if you believe that I have a bridge in Brooklyn for you!

Saudi Arabia is overspending and additional profits will go a long way to save their own hides. They want to accumulate as much as possible before the idea of democracy drifts across their own landscape. The Bush's are great family friends, but will be back on their small ranches either next January, or for certain in four years time.

When it comes to Oil, the worst in families, nations and terrorist acts come into play.

But the US public were promised cheaper gasoline by the end of the summer, the Saudi Prince said so on TV. President Bush also said that he would never ever use oil from the US Strategic Reserve for short term problems of supply. Wanna bet he does just that in October, before the election?

The election of course is in November and with that happy day comes colder weather. Higher demand for fuel oil, and natural gas, now at a premium with supply issues. Not to mention the continued Hurricanes hammering the US, and the Gulf oil producing areas.

The Iraqi "Insurgents" know they have the upper hand. For they can disrupt the flow of crude, anywhere, any time and watch the US squirm.

They also know that oil refining and storage facilities are now a more tempting target than nuclear power plants. And much, much easier to destroy. The majority of them are within an RPG range from a passing car, or a quick climb over a rusty fence from the nearby freeway.

Stop making Washington an armed fortress, concentrate on the areas being targeted by terrorists now. They have their teeth into the oil supply. They know it is nearly at a price per barrel that will destroy the US economy and force a recession.

In the meantime bet the price of oil continues to soar, and breaks the $50 a barrel band shortly. Hope I am wrong because it will hit me in the wallet the same as everyone else.