[OPE-L:6059] petrodollarism, not oilism.

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Wed Oct 10 2001 - 14:56:27 EDT

I wanted to emend my reply in 6042 to Fred. Fred had written:
> US troops were sent to the Middle East in the Gulf War and never left
> completely.  The Gulf War was about OIL - specifically the oil in Kuwait
> that Iraq tried to grab.  The troops were sent to protect Kuwaiti oil from
> Iraq, not to guarantee the recycling of petrodollars.  That recycling had
> been worked out long ago by US State and Treasury officials, as Spiro
> describes, without the use of troops.

Actually this is the opposite of what Spiro describes, as is clear from the 
passages which I downloaded. Spiro suggests that the US was able to coerce the 
Saudis to recycle the petrollars in US interests as payment for the provision 
of security to the House of Saud. Presently I think King Fahd needs protection 
from internal enemies, not external aggressors, and as Eqbal Ahmad has noted, 
it may be the popular Saudi perception that the US has exacted too high a price 
for this protection--too cheap concessions to big American energy firms, 
recycling of petrodollars in US interests, maintaining the link to the dollar, 
and allowing US capital to determine the Saudi position within OPEC. Less US 
greed would stabilize Saudi Arabia and OPEC as a whole and thus the flow of 
oil, but US greed (imperialism) knows no bounds in its hunger for extra surplus 

Fred however argues that the US was only interested in maintaining a cheap and 
plentiful supply of oil. 

If this had been true, the US wouldn't have greedily allowed Kuwait to pump oil 
in excess of its quota (most of that profit finding its way back to US arms 
contractors or banks or energy companies) or would have pressured the Gulf 
regimes to help the Iraqi regime which had fought on the  their collective 
behalf as it was on the brink of financial ruin. If the US were only interested 
in cheap and plentiful oil, it would have allowed Iraq to enter fully the 
market by now, and removed the sanctions on Iran and Libya. If the US wanted 
gas and oil to reach world markets, it would not have fought (or be fighting) 
Iran's attempts to build pipelines from the Caspian Sea since those pipelines 
would be the lowest cost route to Asia. 

No, I think US interest is best understood in terms of trying to secure for US 
capital the super-profits that derive from access to the best fields and 
control of pipelines on the best terms possible and the recycling of 
petrodollars through its financial system (which probably gives the US 
financial system enormous economies of scale). 

I do agree that the US has used Saudi Arabia to oversupply the market at times, 
but I don't think this is best understood in terms of securing supply but 
rather in terms of turning the terms of trade against raw materials producers 
on whose backs, along with labor, the burdens of profitability crises are put. 
To secure the supply of oil by stable OPEC regimes the US would take steps to 
stabilize the price of oil in severe downturns, not encourage its Gulf allies 
to ramp up production even if it means financial ruin for other OPEC and non 
OPEC members. 


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