Tuesday, May 20, 2003
It's still not about the oil.
The U.S. executive selected by the Pentagon to advise Iraq's Ministry of Oil suggested today that the country might best be served by exporting as much oil as it can and disregarding quotas set by the Organization of Petroleum Exporting Countries. His comments offered the strongest indication to date that the future Iraqi government may break ranks with the international petroleum cartel.
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"There will have to be an evaluation by the ministry of those contracts and a determination of whether they were made in the best interests of the Iraqi people," Carroll said. "Certainly, where contracts are, shall we say, excessively beneficial to one party, and that party is not the Iraqi people, and there is a legal basis for not going forward, then I would expect that the ministry would want to have another look."
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Iraq's resumption of oil exports under a new government would expose OPEC to considerable uncertainty. Iraq has the world's second-largest proven oil reserves. Flows of Iraqi oil to the world market unconstrained by OPEC quotas could further erode the cartel's already limited ability to set prices and might even trigger a price war, eating into the profits of its member countries. Such an outcome would surely delight the Bush administration as well as buyers of gasoline in the United States, the world's largest oil consumer. With that in mind, commentators -- particularly in Europe -- have contended that the real purpose of Bush's war in Iraq was to put in place a government that would break OPEC. Such an outcome would dismay the world's largest oil producer, Saudi Arabia, Kuwait and Iran.
More cheap oil here.
posted by chris at 12:18 PM
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