With the price of oil hitting a year-long all-time high, averaging over $111 barrel for Brent crude, OPEC's benchmark, the OPEC oil cartel led by Saudi Arabia will glom more than a $1,000,000,000,000 (trillion) in net oil revenue, a record windfall in 2012. This, in spite of weak economic growth worldwide.
Back in January 2012, with barely a touch of irony nor shame, the Saudi Oil Minister, Ali al-Naimi, pontificated "If we are able as producers and consumers to average $100 I think the world economy would be in better shape." This from the very same oracle who instructed us some two years before that "You must understand that the purpose of the $75 price is a much more noble cause" (please see " 'Noble' OPEC Criticizes the International Energy Agency")
This torrent of money flowing into OPEC, especially into the Persian Gulf States, raises the question how this massive windfall is being put to use other than providing fresh capital for the world's largest sovereign wealth funds, as those of Saudi Arabia, United Arab Emirates and Kuwait.
A troubling and emblematic answer can currently be found in Zanzibar. Zanzibar?? Well just two days before featuring OPEC's triumphal results in 2012, the FT ran a depressing article, "Radical Islam Puts Zanzibar's Relaxed Way Of Life In Jeopardy" reporting that Zanzibar, home to some 1 million people and with more than 2,000 Muslim schools that draw on a long tradition of moderate and Sufi forms of Islam.
Frighteningly, the article reports, "Increasingly parents are sending their children to better financed alternatives in a process that is beginning to mirror what is taking place across a swath of sub-Saharan Africa -- from Somalia to Mali -- where the growing influence of more radical forms of Islam can be felt." Those needing instruction on how that plays out in nations such as Mali need only read "Islamist Harsh Justice Is On Rise in North Mali" in The New York Times.
In Zanzibar organizations such as the Al-Noor charity, set up some four years ago with money emanating from Saudi Arabia and Dubai, has established a nationwide network of Madrassas and every year pays for students to study in Sudan, Abu Dhabi, and Saudi Arabia -- where Wahhabi Islam is practiced. A teacher from Zanzibar, one Indrissa Ahmad Khamis, is quoted, "people who go to Saudi Arabia, when they come back they want to change everything." Unsettling to say the least, given a telling observation in the article, "Al Qaeda and other terrorist organizations draw their thinking from Wahhabism."
The malign influence of oil money through the support and influence of Wahhabism extends far beyond Zanzibar and the sub-Sahara. It has engulfed the entire Middle East, be it the extremists joining the Syrian uprising, to the very sinews of the destabilizing influences in Afghanistan and Pakistan where many of the Taliban were educated in Saudi financed madrassas that teach Wahhabism. Its reach extends to Europe where the London Times reported ("Saudis Fund Balkan Muslims Spreading Hate of the West" 03.28.10):
"Saudi Arabia is pouring hundreds of millions of pounds into Islamic groups in the Balkans, some of which spread hatred of the West and recruit fighters for Jihad in Afghanistan...Islamic fundamentalism threatens to destabilize the Balkans ...Fundamentalist Saudi organizations are clashing with traditionally moderate local Muslim communities."
All this being said, a number of further questions remain:
- Given the enormous liquidity held in their sovereign wealth funds, is any portion of these vast holdings being used to influence the traded price of crude oil/oil product futures thereby forcing prices higher in the commodity exchanges to the enormous benefit of OPEC? That the commodity markets trading in "paper" oil future contracts could be manipulated was made evident, as but one example, in The New York Times article "BP Loses Trading-Floor Swagger in Energy Market" citing BP's cowboy antics on the oil trading floor:
"Its market wagers on crude oil, gasoline or natural gas can use both physical supplies as well as paper petroleum -- in the form of futures contracts and other derivatives."
- What portion of these funds are being used to influence government policy by subsidizing Beltway think tanks and public opinion by the likes of Abu Dhabi Media, financing such propaganda vehicles as the film Promised Land, denigrating shale gas and depicting fracking in a hysterical light in order to derail our efforts to achieve energy independence? (Please see "Yoko Ono, Matt Damon and OPEC Versus American Energy Independence.")
- What portion of their cartel-derived bounty are the Persian Gulf States prepared to reimburse U.S. taxpayers who are being tapped for some $100,000,000/day in order to keep a naval task force in the Persian Gulf to shield Saudi Arabia et al from Iranian aggression and to keep the sea-lanes through the Strait of Hormuz open to their profit and at our expense? Our fleet is leased facilities in places such as Bahrain, docked in the metaphoric dog house playing the role of watch dog, while the local pooh-bahs play in their mansions and yachts.
- One last question. What is keeping the Obama administration and Congress from passing a NOPEC law that would authorize the Justice Department and the Federal Trade Commission to take legal action against OPEC national oil companies? They have run roughshod over our anti-trust laws, hiding behind tenuous and faulty judicial rulings granting these companies sovereign immunity and especially such as Aramco, the Saudi national oil company, and PDVSA the Venezuelan national oil company who have significant refinery operations on American soil. (please see "NOPEC (No Oil Producing and Exporting Cartels Act): A Presidential Issue and a Test of Political Integrity.")
Is anybody listening?!