Hillary Clinton's Nuclear Defense Umbrella for the Oil Price Gougers -- Who Pays?

In October, 2008 as the world's economies were on the verge of collapse, OPEC spokesmen, exhibiting their innate instinct of timing and concern for the well being of their client base throughout the world called for an emergency meeting to be held in November. "The decision will very likely to be to cut production" was to be the theme (please see "While The World's Economies are Reeling, OPEC Wants Us To Pay More For Oil"). Then in December, 2008, that great bearer of good tidings, the Saudi Oil Minister enlightened us that King Abdullah's oil price target of $75 a barrel was a truly "noble cause" given that, according to al-Naimi ,"marginal producers cannot produce at $40 a barrel", the going price at the time. So much for the endless hyperbole emanating from the Arabian/Persian Gulf, except that the price of oil is now approaching $75/bbl as of this writing. Certainly Saudi Arabia and their brothers in arms in the OPEC cabal are cheering every extra nickel their willful manipulation is extracting from the market at grievous cost to American and world consumers. And so it was during the Bush years all the way to $147 when their gluttonous barrel was permitted to run over.

Are we there again, watching the same theater that emanated from the Bush/oil industry ballet? Since February the price of oil has increased by over 100% (for those wont to blame it on the dollar know that oil prices increased over 100% while the dollar index fell less that 15% since February) with no effective countermeasure by our government that would have immediate effect on oil prices such as desisting from additional purchases for the Strategic Petroleum Reserve or even releasing some of the near 800,000,000 barrels now in storage, thereby sending a forceful signal that prices are much higher than they should be, and will no longer be tolerated without countervailing policies. These measures could include NOPEC legislation (removing OPEC's sovereign immunity so that their collusion becomes actionable in our courts), truly effective CFTC oversight, subjecting imports of oil to import licenses according to country of origin, and on.

But now this grim drama has gone one step further. Secretary of State Hillary Clinton, in her recent tour to Southeast Asia suggested clearly that the United States might well extend a "defense umbrella" protecting its Arab allies should Iran develop a nuclear weapons capability. She offered a rare glimpse into what the United States might do if Iran did not respond to its diplomatic overture. "We want Iran to calculate what I think is a fair assessment, that if the U.S. extends a defense umbrella over the region, if we do even more to support the military capacity of those in the gulf, it's unlikely that Iran will be any stronger or safer, because they won't be able to intimidate and dominate, as they apparently believe they can, once they have a nuclear weapon."

Now one need ask what kind of allies are these who openly extort a higher price for a commodity key to our and the world's economy than a fair and free market would determine. (You can well imagine the opprobrium that would be leveled at the United States, Canada, Brazil, Argentina, Australia if they joined together to treble or quadruple the price of soybeans, corn, and wheat -and note grains are not a fully renewable resource being dependent on ever depleting fertilizer elements as potash, phosphates, nitrogen/nitrates to grow sufficient crops). And that being the case, given the billions that would be involved in extending such a defense umbrella, who then foots the bill?

To date, we are, and have been for years, paying out some $100 million a day representing the outlay share of the naval task force patrolling the Arabian Gulf protecting the shoreline of Saudi Arabia, Kuwait, the United Arab Emirates without any meaningful quid pro quo expect perhaps docking facilities in the U.A.E. Thanks! Not to speak of the lives and treasure expended to protect Saudi Arabia and Kuwait and on, in Gulf War I and II. This while we are being taken to the cleaners by the willful manipulations and collusive restraints on supply by these very nations who are full fledged members of OPEC with Saudi Arabia being recognized as its putative leader.

This was a policy tolerated by the Bush administration given its craven obeisance to oil interests. One had hoped for a more balanced and mutually shared relationship under the Obama administration, but it is still early in the game and the administration's efforts to get the oil monkey off our back once and for all appear genuine though long in the making.

Given the billions and billions that have flowed into national treasuries of the countries in question built on egregious oil prices it should be made crystal clear that an American "Defense Umbrella" will not come as an American giveaway. That neither the American public nor its government will no longer tolerate being the pensionary policeman to the oil producer's extortion. That the nations protected under the "defense umbrella" will have to foot the bill directly and desist from oil pricing policies that is collusionary.

On a side note but pertinent given the players and issues involved let us not lose sight of the enormous influence on government policy that was gained by Middle East money flowing into the coffers of think tanks, K Street Lobbyists and perhaps most emblematically the millions of Saudi money committed to the Bush Presidential Libraries. The millions sloshing around the Bush administration provided access (i.e. Saudi Arabian Ambassador's virtual open door entree to the Oval Office), and most certainly had its impact on the administration's decision making and in turn on national policy. The government and press needs be vigilant that similar access that might be gained through the millions donated to the William F. Clinton Presidential library is not a harbinger of a similar moneyed power play toward this administration. Given the sensitivity of the issues at hand it would be disastrous if this administration were exposed to similar blandishments!

Comments

[RibEye]

Pure ignorance of the region is the problem, as this great scholar does not even know that it is the PERSIAN Gulf, always was and will be. One learns that in grade school.
So is there a point to having a discussion with a member of the flat earth society?

When the islamic regime wants to remain in power number one, why would they attack anyone.? It would only be for detterence.

Hey scholar, I have a test for you. Which of the countries in that region have been a Nation for over 100 years?

[BannedNBoston]

Its another promise of continued empire we cant afford.
THE FOREIGN THREAT IS ALWAYS EXAGGERATED!

[leduck]

a hundred years from now, when burning oil is a distant memory...,
learsy will still be writing about speculators.

[leduck]

good for OPEC -- I hope they do cut production!!!

[Pippen]

The Clintons are not inbed with the Bush'es.

It's much bigger than that.

America needs big oil and oil as a product for national security. Until you force congress to implement green fuel for transportation and a replacement for commercial fuel we're married to Opec.

We don't want a divorce. Whoever owns the most oil will more than likely win the next world war. That's how simple it is.

If we drop big oil and oil as an energy source today, our economy and stock market would crash. Not suffer, not weaken but crash and burn. That's a national security issue as much as Russian nukes.

When our neighbors stop loading the shotguns and stop threatening our business efforts we'll get a divorce. One or the other has to go. They give us oil and we give them military protection. We don't have a choice. Planes dont fly on good intentions and woodstock juice.

[DuganS1]

The foundation of Leary's argument is simply wrong. OPEC is not responsible for the recent increase in oil prices. And where does the idea of manipulation even come from? Fibonaci has 10x more to do with the recent price increase than OPEC does, then you have the federal reserve, the US govt blowing out the budget, reduced exploration activity and investment worldwide, and the expectation of a global economic rebound which would bring back the problem of global spare capacity.

[peterg76]

Yes, it's OPEC that's driving the oil corporations into bankruptcy­....

[altohone]

Dwelling on being paid for the service seems beside the point.


The question should be "Are the countries worthy and deserving of our protection?"

Why the heck would we provide a defense umbrella for countries that violate the principles of our country while sticking it to us?
Capitalism, democracy, human and women's rights...

... is their willingness to sell oil really more important?

Your sons and daughters risking their lives for countries than ban fitness clubs and movie theatres would truly be a waste.
Taxpayers paying for the right for that to happen is a joke.


Ignoring the role of speculators in the price increase and focusing on OPEC is also a joke though.

[klondiker]

That is not what she said. The whole point of that comment was to explain that developing nuclear weapons is not in Iran's interest because the reasons for which they are supposedly developing them (greater influence over the region, being able to intimidate their neighbors) would not be fulfilled by getting nuclear weapons. That's it.

This is part of the Obama admin's new approach. You might have noticed that both Hillary and Obama frequently talk about "internal calculus" and "rational assesment" with regard to other nations. Their approach is that rather than intimidation, they just present a rational alternative and hope that the other side will make the calculation about which alternative meets its needs. I think it's a great approach, and I do think it will bear fruit with Iran and NK.

[FearlessFreep]

The US "defense umbrella" may protect the Arabs from Iranian nukes, but I'm not expecting it to protect them from Israeli nukes.

Let Mordechai Vanunu go!

[holeybuybull]

The Clintons were co-opted by the Bush family years ago, when G.H.W.Bush adopted Bill, thereby making the Clintons part of the Saudi Royals. Iran isn't seeking a nuclear weapon to intimidate its neighbors, but to discourage invasion by the American Empire.

[am5454]

Can I please ask a question?

Why is it that when Jewish Americans and Israelis demand billions (trillions really) for non value adding stuff like shuffling paper on wall street or Israel no one complains.

But when Arabs ask a fair price for something tangibe - oil - (which you don't have to buy, go use wind energy and see how you like that) they're suddenly gougers?

[Saidas]

These don't have to be mutually exclusive. Both can be wrong independent of each other.

[FunkyP]

The idea that Iran wants nuclear weapons to intimidate and dominate:
"it's unlikely that Iran will be any stronger or safer, because they won't be able to intimidate and dominate, as they apparently believe they can, once they have a nuclear weapon."
is unsound. Israel has plenty of nuclear weapons, backed by the U.S. missiles and money, and Iran's acquisition would give them no nuclear advantage. What a nuclear weapon gives Iran is some sense of deterrence.
Let's trade atoms for oil ?
The Saudis, no friends of Israel themselves, can defend themselves and keep their oil if that's how they want to play it. We have alternatives gearing up, and they only have that leverage for a few more years.

[TXfemmom]

If the Saudis, Kuwaitis, and the others want to be defended from Iran, then it is time that they offer the United States MONEY for protecting them. It is estimated that it costs us $100 million a day to defend the Gulf now. If they want defended, then they should pay one and a half times the true cost and then offer oil to us, say one third of our needs, for $40 a barrel, as it costs them only $8 a barrel in costs to pump theirs.

[GardenerNorCal]

I like your thinking.

[BiBiJan]

If the Saudis, Kuwaitis, and the others buy the hyped-up danger from Iran, then they should sell the oil at $7 to compensate the US for all the hyping.

"Iran has an economy the size of Finland's and an annual defense budget of around $4.8 billion. It has not invaded a country since the late 18th century. The United States has a GDP that is 68 times larger and defense expenditures that are 110 times greater."

http://www.newsweek.com/id/57346/output/print

[KillTheMessenger]

Iran is not even threatening the Gulf. It is merely threatening American presence in the Gulf... so we are only protecting our own presence there.

What a waste.