Washington’s Erroneous Notion That the Persian Gulf Is an American Lake | WHAT REALLY HAPPENED


Washington’s Erroneous Notion That the Persian Gulf Is an American Lake

For crying out loud, even the barbaric thugs of ISIS milked every possible drop of petroleum from the tiny, wheezing oilfields scattered around their backwater domain before they were finally driven out. So there is no economic case whatsoever for Imperial Washington’s massive military presence in the middle east.

The truth is, there is no such thing as an OPEC cartel – virtually every member produces all they can and cheats whenever possible. The only thing that resembles production control in the global oil market is the fact that the Saudi princes treat their oil reserves not much differently than Exxon.

That is, they attempt to maximize the present value of their 270 billion barrels of reserves. Yet ultimately they are no more clairvoyant at calibrating the best oil price to accomplish that objective at any given time than are the economists employed by Exxon, the DOE or the International Energy Agency.

For instance, during the run-up to the late 2014 collapse of the world oil price, the Saudis overestimated the staying power of China’s temporarily surging call on global supply.

At the same time, they badly underestimated how rapidly and extensively the $100 per barrel marker reached in early 2008 would trigger a flow of investment, technology and cheap debt into alternative sources of supply. That is, the US shale patch, the Canadian tar sands, the tired petroleum provinces of Russia, the deep offshore of Brazil etc. – to say nothing of solar, wind and all the other government subsidized alternative source of BTUs

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