New OPEC Prices: a Pyrrhic Victory of the U.S.A.?


ALMATY, Apr 13


The West's (the U.S.A.) pressure has made OPEC countries compromise and increase oil production. Is it due to old rivalry, new success of US diplomacy or a Pyrrhic victory?

These methods encourage the formulation of a one-pole world, the goal of the USA: any disobedience, especially in an areas so �close� to the US heart, the Arabian world, make it incumbent.

Shortly before the Vienna OPEC meeting, the US Lower House approved the bill on stopping state aid to �countries participating in artificial restraining of oil prices.� After the failure of the mission of the US Minister for Energy, Richardson, the US Minister of Defence, William Coan, went to try and create a principal agreement with Arabian sheikhs.

There were three methods to keep oil prices at a low level: to increase oil production, to provide strategic resources, and to reduce taxes. Washington ignored the compromising variant, forced OPEC to increase oil production and partially reduce strategic resources, so that at a time when relations with Iran were to be softened, as the U.S.A. did not have to acknowledge the latter as a serious regional state. Teheran, in its own turn, declared that it �was not against discussion, but pressure.�

However, the U.S.A. has chosen the variant which evidently infringes not only the interests, but the dignity of all member countries of the cartel. Excluding Iran, the OPEC countries supported the decision. We may guess, many of them (including the OPEC leaders and, especially the �opposition) felt themselves insulted by such frank pressure.

The position of Iran is understandable. Despite the arrival of reformers, anti-American moods are very strong in this country. Washington, probably, has lost its former positions of favour for a long period, after the overthrow of the Shah Mohammed Pehlevi. The latter, drawing on the attention and support of the West had tried to �push Iran into the 21st century� at a furious pace.

Yergin in his book, �The Prize� cites the words of the former Oil Minister of Saudi Arabia, Yamani, who greatly influenced the OPEC and the entire oil world, according to the opinion of many people in the West. Yamani openly warned the US of the danger of being friends with the Shah. As a result, this mistake caused the emergence of �the militant anti-American regime�, as the US Ambassador in Er-Riad had forecasted.

The OPEC is losing its Control

OPEC had repeatedly demonstrated to the world its power, for example in 1973. In response to the West's support of Israel in the Arabic-Israeli conflict, the cartel increased prices and reduced supplies.

During the last 20 years, Washington has been trying to make OPEC a mechanism to support prices favourable to the West. During the last decade, cheap export oil was extremely important for the US economy, having become its key strategic resource. This oil helped the West to overcome the economic crisis in South-East Asia without any serious consequences.

A fast growth of oil prices following the decision taken in March 1999 to reduce oil production made OPEC members again believe in themselves. Despite disagreements inside the organisation, at the end of 1990s, the efficiency of its actions began to touch directly US interests, thanks to the unexpected solidarity of the Persian Gulf countries.

Moreover, oil exporters, non-members of the cartel, including Norway and Mexico, supported the OPEC. After September 1999, OPEC took a decision to keep low production levels, most countries, not included in the organisation did not increase their production.

Mexico, integrated with the U.S.A. within NAFTA, was waiting for the joint decision on increasing production.

Despite OPEC's actions, it was Kuwait that especially enraged the U.S.A., as it had once been liberated from Iraq by Americans, yet its government did not consider price reduction to be necessary at all.

The Russians are Coming

Moscow, which for the time being does not possess any weighty economic levers (Russia's share in world oil production is 7%), yet unexpectedly it took an active part in the March OPEC meeting.

According to experts, the Russian Minister of Fuel and Energy, Kalyuzny, supported Iran and Libya at the summit and persuaded their partners that US pressure was inadmissible, as it was demanding the increase of quotes. The expert on Russia's Ministry of Fuel and Energy feels that due to Russia's position, quotes were increased by 1.45 million barrels per day. Right after the summit, Moscow also made a new step: Putin sent his first international message on this issue to the Algerian President, Buteflic, where he underlined the �importance of interrelations at the top level.�

Russia has two levers to influence this OPEC member, which played the key role in reduction of production and which was against of an increase, - contracts for supply of weapons on credit basis, worth US$ 1.5 to 6 billion.

This debt may be written off in exchange to promise to support Russia in the OPEC, Stratfor analysts state. Thus, Moscow has made an attempt to participate in controlling of world prices through the cartel.

A Second Vietnam for the U.S.A.?

A force in the form of a competitor, which he has to overcome, gives incentive to a sportsman; otherwise he either becomes complacent or a force emerges which overcomes him.

The status of the U.S.A. as the super-power, which has no worthy competitor for over a decade, can be compared with this invincible sportsman.

The U.S.A. is obviously eager to fix its position in the one-pole world. When there is no USSR, any efficient force emerging on its horizon makes the U.S.A. anxious.

However, it is getting increasingly difficult for the U.S.A. to control the restless and continuously changing world, including the Balkans, Central Asia, Pakistan and India. The case of the OPEC countries also took much time and efforts.

The problem of Kosovo, after a massive military treatment in the Balkans, was transferred to Europe. Positions in Central Asia, where for the time being Washington failed to pursue its strategic goals (the main of these objectives is to force Russia out), are not as good as they are desired to be.

Incidentally, in the heat of the �supervision� of the OPEC, Americans came to grief with Turkmen gas, supporting the reconsideration of the Trans-Caspian pipeline initiated by Azerbaijan. This made Turkmenistan irate and allowed Russia to use the situation. This made Stratfor announce �the US stepped aside from Central Asia.�

The Baku-Ceykhan project (the pipeline to come through southern CIS countries), which was being actively promoted by Washington, to spite Russia, now is being realised too slowly. THE GLOBE (�10 years later�, #10(248), 11.02.2000) wrote that Putin might impede the realisation of the project, killing the US stake.

A lot of states claim to be a counter-balance of the U.S.A., including Russia, China, India and Iran.

The Arabian world repeatedly makes U.S.A. nervous. The US �Irano-phobia� begins to irritate Europe, as this impedes penetration by Western European companies into the promising Iranian market. In short, many countries, especially in the Muslim world, are dissatisfied with Washington's activities. Knowing the tense situation in the Middle East, the U.S.A., nevertheless, continues to adhere a position of force .

It chose this position in 1960s in respect to Vietnam. Having wasted a lot of manpower and tangible resources in the protracted war, the U.S.A. had to leave the country, accepting its defeat. This was advantageous to the USSR, which unofficially supported Ho Chi Minh. Vietnam temporarily cooled the US pressure unchecked after the triumph in the World War II, and caused re-evaluation and corrections to US foreign policy, which became more rational.

However, after the USSR collapsed, the world being protected by the U.S.A. was withstanding growing pressure by the U.S., including direct interference in internal affairs of strategically important countries and regions.

Trying to participate in everything, the U.S.A. often plays a thankless role of the world policeman, but not a friendly protector, and its steadfastness in the OPEC issue emphasises this. The US can celebrate victory yet it is worth recalling that Arabians are not those to forget old insults. The Gulf countries have a significant potential to stir up anti-American moods, and US behaviour is making the situation more tense. The OPEC countries will take risks to be a lump in the throat of the US again.

Determining the new political conception in the other oil region, the Caspian, the U.S.A. will have to deal with the countries of the region and first of all, with new Russia. We hope Mrs. Albright will appreciate this during her visit to Central Asia.

Opec can reduce quotas in 18 days

ALMATY, Apr 12


ITAR TASS informs that OPEC will reduce quotas if the petroleum price will be lower than $22 for barrel within next 18 days. It was stated by the President of the organization Ali Rodriguez.

In results of trades on the International petroleum exchange (IPE) on Tuesday, Brent of May delivery price has made $21.78 for barrel (according to REUTERS - $21.67 for barrel - note of IRBIS).

OPEC new quotas introduction on April 1, 00 has stipulated reduce in the oil price to the level of November 01, 1999, or by 30% in comparison with the beginning of March 2000.

As has Rodriguez has declared, �OPEC is ready immediately to cut off production by 500 thousand barrels at 20-day's sinking of prices below $22. This position is supported by Saudi Arabia.

The forecast of International Power Agency from April 11 marked that the petroleum demand will be higher in the second quarter by 2.8% in comparison with similar period of 1999 and will make 75.2 million barrels per day, in the third quarter it is predicted to be 76.7 barrels and in fourth � 78.9 barrels.

Some more events negatively influence an exchange situation. Iraq has increased export to 1.23 barrels per day, that is by 32.2% higher than in the previous week. Kuwait by 15 cents has shortened Asia export barrels in comparison with the other Gulf exporters, Norwegian has started works on 5 new sites.

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