Yoshie wrote:
There are lots of factors, from unseasonably warm weather (due in part to climate change) to rates of economic growth, many of which are beyond the control of oil producers. The issue is what the Saudi ruling class are doing with the part they do control, their own oil reserves.
============================= But it is not as if Iran has suddenly become an American target. If it were as easy - as is being suggested - to force regime change or to otherwise alter Iranian behaviour by driving the oil price lower, using the the Saudis as swing producer, you'd think think the Americans would have engineered this long ago. In fact, while US hostility and efforts to subvert the Islamic Republic have been constant since 1979, global oil prices have fluctuated wildly since that time in response to factors quite independent of US-Saudi-Iran relations. The tensions within OPEC over the timing and scope and distribution of output are also part of its history, a normal feature of a cartel.
The main weapon being used against Iran is not the oil price, but the long-standing financial squeeze against its industry organized by the US Treasury. In the past year, it has stepped up its attempt to cut the flow of foreign credit which Iran needs to its maintain, upgrade and expand its oil industry, especially by the European banks who are the most vulnerable to US sanctions. Results have so far been uneven. While the Iranians have conceded that US sanctions are impeding the development of its oil industry, the Europeans have found indirect ways to continue their profitable relations with the Iranians while the Chinese have compensated for any shortfall by rapidly becoming a major Iranian energy market and source of investment capital. The US has thusfar refrained from pushing back too hard on the Chinese and Europeans becuase they want them to use their influence in Tehran, especially within the Iranian bourgeoisie and the Rafsanjani faction, to restrain the Ahmadinejad government and to hamstring Iran's nuclear program. The only truly effective econonic sanctions available to the US would be an embargo on Iran oil exports and gasoline imports, but this have no chance of securing the international compliance on which such action depends, and would in any case be treated as an act of war by the Iranians. That leaves the only remaining alternative on the great chain of escalation - the threatened Lebanon-style massive destruction of Iranian facilities by air and missile assault - the dangerous game of chicken in which the US and Israel are presently engaged.
