A must read piece from Foreign Policy.
Crude oil prices continue to hover around the $90 mark. And the Organization of Petroleum Exporting Countries (OPEC), a consortium of the world’s top oil producers, has something to say to consumers: Tough luck. This message was delivered at last week’s OPEC meeting in Vienna, where the cartel’s member states ignored consumers’ pleas to open the spigot and provide some relief.
For OPEC, whose flush-with-petrodollars members seem unconcerned by the pain inflicted on the global economy by oil’s meteoric rise, increasing output is not a matter of capacity, but of will. The cartel owns 78 percent of the world’s proven reserves and produces about 40 percent of its oil. Its members have plenty of cash to invest in new production, and OPEC has repeatedly claimed it holds spare production capacity of more than 3 million barrels per day. This claim is impossible to verify, thanks to OPEC’s notorious lack of transparency. But, if true, it means OPEC can inject a significant amount of oil into the market almost immediately, dropping prices by as much as $20 to $30 a barrel.
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My Comment: Many of the major wars and political battles that involve us revolve around the issue of energy. In particular oil.
Oil is not only the lifeblood for us in the West, but it is also the source of monies and funds for Al Qaeda and other Islamic extremists. If OPEC was not awash in petrodollars, I very much doubt that countries like Iran, Chavez in Venezuela, the growing militarism of Russia, Al Qaeda and their allies, as well as many other minor players would even be a factor in todays world.
I can even make the argument that U.S. forces would not be in Iraq or Afghanistan today.
This is unfortunately not the case now. To change this present environment it is clear that we must diversify our need for foreign oil. I know that this will take a long time, but this article is a good way to start this conversation.