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THE OIL PIMPS
PART 2 of 3

 

By Jon Christian Ryter

June 4, 2008

NewsWithViews.com

The Organization of Petroleum Exporting Countries was formed by Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. At the conclusion of the Six Day War in 1967, the Muslim nations formed a splinter oil cartel within OPEC called the Organization of Arab Petroleum Exporting Countries as an economic weapon to be used against the capitalist countries in the West. The oil producing Arab nations, together with Russia and China, control 1,617,256 million barrels of oil. The Seven Sisters are sitting on active reserves of 39,000 million barrels. While that represents about 2% of the current oil supply—about the same amount as Algeria—the Seven Sisters actually controls 7% to 10%. They just aren't doing anything with the reserves for which they own the leases. Many of the unused leases they are sitting on are in the Northern Slope of the Arctic National Wildlife Refuge, under the Arctic ice, in the Florida Keys where China has currently sunk at least one well 17 nautical miles from Key West, and the Gulf of Mexico, where geologists believe there is more oil than exists on the Arabian Peninsula.

Today "Big Oil," which was instrumental in blocking oil exploration and drilling in most of North America, is now dwarfed and financially overwhelmed by the national oil giants that formed their own cartel—OPEC—on Sept. 14, 1960 to bully the supermajors and, most of all, the industrial, economic and military establishments of the free enterprise nations into submission. For the most part, the oil fields they nationalized belonged to either the Seven Sisters, Royal Dutch Shell, Occidental Petroleum, Hess, Devon, Apache, or some other American or European oil company.

While they still maintain financial clout over the industrialized nations, the Seven Sisters no longer have the global monopoly they had before the second and third world countries (who now control 80% of world's oil reserves) nationalized the oil fields within their borders and gained political control of the most important natural resource in the world. The nationalization of the oil industries by the world's totalitarian governments is nothing new. The first industry nationalized by the Soviet Union in 1917 was oil. Today, totalitarian regimes control 80% of the world's oil. The world's emerging economies, in particular China, India and Indonesia (the world's most human capital-rich nations) are rapidly becoming industrialized by the world's greediest transnational industrialists and merchant princes. They see the third world as the profit center of the 21st century.

Sadly the barons of business and the regents of retail have forgotten the nightmares of the early 20th century that resulted when the oil barons and princes of industry used their political clout to send nations to war when despots seized their corporate assets, or when the heads of states of other nations refused to give in to their economic extortion. When oil was discovered in the Baku oil fields near the Caspian Sea in Russia, in 1873, it was completely controlled by Tsar Nicholas I's banker, Baron Alphonse Rothschild and the Swiss munitions manufacturers, Robert and Alfred Nobel. The Nobel Brothers controlled the refining and distribution of the Russian oil through Europe, greatly impacting the marketing of Standard Oil kerosene in Europe. By 1884 the Nobel Brothers were pumping as much oil in Russia as Rockefeller was in the United States. Rockefeller was determined to corner the oil market in Russia, but he was blocked by Count Sergei Witte, the Russian Finance Minister who knew Rockefeller's reputation in the United States.

As new oil discoveries around the world became as commonplace as mosquito bites at a weekend picnic at the lake, the internal combustion engine changed the global demand for oil. Everyone and his brother became an oil wildcatter. As he fought the Nobels and Rothschild to get a toehold in Russia that would be denied him by Witte, Rockefeller also fought a losing battle in Burma and Java against both Royal Dutch Oil and a wildcatter named Marcus Samuel who owned the Shell Transport & Trading Co. They would ultimately merge to stave off a takeover by Standard Oil. In Rockefeller's mind, the biggest threat to Standard Oil was Caspian Sea oil. Because the Standard Oil name was so hated, Rockefeller formed the Anglo-American Oil Company to compete in Europe and Asia. In the end, the prize he sought—Russia—remained beyond his grasp.

In the first decade of the 20th century, Standard Oil, together with New York bankers Andrew Mellon, J. P. Morgan, steel magnate and financier Andrew Carnegie, and several barons of business formed a company called the American International Corporation [AIC]. They entered into a covert plot to finance the overthrow the government of Tsar Nicholas II. The Bolsheviks, who were comprised of over 150 thousand active members in 1905, dwindled to 20 thousand hardcore discontents in 1916. Led by Marxist extremists Leon Trotsky and Vladimir Ulyanov (whom the world would know as Lenin), they led demonstrations in Moscow and St. Petersburg advocating the overthow of the monarchy. Had it not been for the interference from greedy US businessmen who wanted to recreate their own version of the United States in central Europe, the Bolshevik Revolution would have been remembered by history as the Bolshevik demonstrations that, ultimately, led to a slightly more democratic monarchy in Russia. Instead, democracy collapsed completely and, in its place, came the most abusive totalitarian government the world had ever seen until the formation of the People's Republic of China in 1945.

Rockefeller justified his part in the overthrow of the Russian monarchy because Sergei Witte convinced Tsar Nicholas II it would not be in the best interests of the Russian government to allow Rockefeller to do business in Russia under any name. In the end, after the Bolsheviks overthrew the legitimate government of Russia and assassinated Tsar Nicholas II and his family, Lenin reneged on his word to the barons of business, causing the AIC to turn to the less radical Mensheviks (called the "White Russians" by the media) to overthrow the Bolsheviks, bringing about a decade-long civil war in the fledging Soviet Union. But this was only part one of a two-part saga. Part two occurred as World War I came to a close when British and American Expeditionary Forces captured the Baku oil fields near the Caspian Sea.

Under pressure from AIC, when Wilson ended the war with Germany, he quietly left the "Russian situation" unresolved. Financed by AIC, the White Russians revolted against the Reds. Less than 3 months before armistice ended the fighting in Europe, British forces overthrew the Bolsheviks in Baku on August 4, 1918. They held the oil fields until April 28, 1920—16 months after the official end of World War I and 21 months after the last "official" bullets were fired in the anger of war. American and British troops were still fighting, but they were not fighting Germans. They were fighting Russians, who—at least theoretically—were still, officially, allies of the United States. Questions were raised in the United States why the American army was fighting Standard Oil's private war to keep the Baku oil fields. Unable to answer the question, the Wilson Administration quietly brought the doughboys home. In May, 1920, the last cannons of war were silenced. World War I was over, but the war to control the flow, and price of oil, had just begun. The oil pimps postwar game plan in the Baku oil fields of Georgia (not the State, the country) gives you an idea of precisely how much clout of the Seven Sisters possessed in the early decades of the 20th century.

In 1972 under what is now known as the Nixon Doctrine (or, to some, the Guam Doctrine), President Richard Nixon pledged to beef-up the military strength of Shah Reza Pahlavi's Iranian government and make it the strongest nation in the Mideast. Nixon, through assured Shah Pahlavi that he would be able to assert his authority over the region. At this point in history the Soviets had reached the zenith of power at home and around the world.

They had a robust economy and had become the world's leading producer of steel and oil. As the Soviet economy flourished, the economy of the United States strained under OPEC's oil embargo of 1972-73. The world watched the Soviets prevail against the United States on the international stage. The Soviets launched a campaign in the early 1970s supporting the return to Iran of Ayatollah Ruhollah Khomeini, a Marxist Muslim who was tied to the Russian Bolshevik Party since 1916. The Soviets believed if Khomeini was allowed back in the country, with the help of the Soviets, he would be able to seize power and further damage the floundering United States. Nixon and President Gerald Ford continued to support the Shah.

When Carter was elected in 1976, his Council on Foreign Affairs [CFR] advisors and Secretary of State Henry Kissenger pushed him to jettison the Shah of Iran and cut a deal with Khomeini, whose influence in Iran was rising steadily (even though he was still in exile). OPEC continued leveraging the US by raising oil prices even as geologists discovered an estimated 3.2 billion barrels of oil in a reserve just off the coast of California, and another 9.6 billion barrels in a sliver of land set aside for drilling in Prudhoe Bay on the North Slope of Alaska.

As OPEC spent the 1970s raising oil prices, the United States could have ended its dependency on Arab oil by tapping into existing wells in the United States, or drilling new wells in the Gulf of Mexico or off the coast of California, or in Alaska. Environmentalists funded by the oil industry and other wealthy industrialists lobbied Congress to prevent drilling in any "environmentally-sensitive" areas—which to the environmentalists meant anywhere in North America. The oil pimps preferred drilling in sand rather than rock. Arab oil was cheap—and it was plentiful. On top of it, OPEC was doing the Seven Sisters a favor by leveraging the price of oil skyward. In 1972 the price of crude was about $3 per barrel. By 1974 it quadrupled to $12 per barrel. Taking a lesson from the Standard Oil playbook on supply and demand, the Arabs cut oil production by 5 million barrels per day, reducing it even more as other oil producing countries increased their output to compensate for the Arab global shortfall.

Beginning in 1974 OPEC and the nationalized oil giants, not the Seven Sisters nor the privately owned oil companies controlled the global price of oil. In a period of six months in 1978, OPEC increased the price of crude oil by 400%. When we watched our erstwhile oil giants "dangling in the wind" before blowhard Senators and Congressmen making pomp for the press, how many of us realized these guys had completely and irrevocably lost control of the oil spigot because they stopped pumping US oil years ago only because Mideast oil was more profitable? Convinced at the time that oil is a finite resource, the supermajors decided it was smarter to use up the oil outside the United States first, so when 90% of the world's oil was gone, what was left—in the United States—would be worth hundreds of dollars per barrel.

Besides, what OPEC was doing fit well with the plans of the supermajors to get the price of oil over $100 per barrel—without them getting the blame. One hundred dollar oil makes it profitable to drill in ANWR, and it makes digging super-deep wells into the Earth's crust that are needed to tap the oil lakes deep in the mantle of Earth (where, by the way, no dinosaurs or fossil vegetation ever lived) where oil is manufactured by the planet in one of those unexplainable mysteries of the universe.

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Within days of the oil pimps making one of their increasingly frequent appearances before Congress to explain why gas prices are so high, the Commodity Futures Trading Commission announced on Thursday, May 29 that it had been investigating Wall Street and the oil pimps for the past six months to determine whether they, the Wall Street speculators, investment bankers and hedge funds have engaged in any illegal manipulation of the oil market. On the heels of their announcement oil, which gained 86% over the past year, dropped from $135.09 to $126.62. On Friday, crude prices dropped again, this time to $124.67. As oil prices slid, the dollar rebounded since the dollar is affected by two quintessential risk factors: a volatile stock market and skyrocketing crude oil prices. For part three click below.

Click here for part -----> 1, 2, 3

2008 Jon C. Ryter - All Rights Reserved

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Jon Christian Ryter is the pseudonym of a former newspaper reporter with the Parkersburg, WV Sentinel. He authored a syndicated newspaper column, Answers From The Bible, from the mid-1970s until 1985. Answers From The Bible was read weekly in many suburban markets in the United States.

Today, Jon is an advertising executive with the Washington Times. His website, www.jonchristianryter.com has helped him establish a network of mid-to senior-level Washington insiders who now provide him with a steady stream of material for use both in his books and in the investigative reports that are found on his website.

E-Mail: BAFFauthor@aol.com


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Because gasoline prices impact how voters perceive their Congressmen and Senators, the Democrats want to make sure the voters blame Republicans for high gas prices and not them.