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The eagle has landed.

The Eagle has Landed

Oil as a weapon that has shaken the world recently was not discovered as an economic weapon by the Arabs, but it was forged by a few oil companies namely Gulf, Shell, BP etc. Oil exploration in Muslim countries goes as far back as

1940s or so. The Anglo-Persian Oil Company which was established in 1913 with the British Government holding 51 per cent shares marks the beginning of this `exploitation through exploration of the area'!

During the pre-war period oil was struck in Iraq and Kuwait and its economics found feasible for further production but deliberately progress was delayed because at that time Britain, France and the US could not agree on the terms for which the use of this find i.e. the oil; could be shared among themselves. However, after the war with new economic frontiers open, considerable exploration was undertaken by the international companies because now they could sell oil at a delivered price; which not only reflected higher cost of producing it in the US, but also for most customers included a transport component calculated as if the oil originated in the Gulf of Mexico!

With the passage of time, in Saudi Arabia an exclusive consortium of American Companies was formed which enjoyed undisputed authority to explore the oil resources; not only that but also to formulate the pattern of production and determine prices. All this was done at the discretion of the oil companies without the sovereign states in which they were operating having any say in it.

In 1954 however with awareness in the area these oil companies were persuaded to give some type of consideration to the question of off-take and link it up with the development needs of the area but as time passed on and the local population got exposure to the outer-world, coupled with education and gaining of consciousness made things difficult for the operating oil companies. Difficulty arose in 1959 when some of the oil companies reduced the prices of crude; as a result of which curtailed the amount of royalty payable to the governments where they were operating - Nobody was willing to have a cut in his share! It was now an economic alliance by the name of OPEC was formed with member oil producing countries of the area getting together to protect their interests. In 1970s however the oil states taking advantage of the changing international situation started throwing some weight to assert their rights over their national resources over which they thought that they had all legal rights. But inspite of all this even after so many years of OPEC creation and efforts made by the member countries the so called oil consuming countries with whom leverage lay have always managed to keep on "playing off" one country (oil producing) against the other. The result is presently the oil producing countries are completely at the mercy of the oil consuming (developed) countries - The Americans landing in the Gulf also appears to be slepped in this direction. As a matter of fact that whole thing appears to be a hoax, or a cooked up move between the two rivals. What is being said is that the Iraqi invasion of Kuwait has taken place with the American blessings so that the American may have a pretext to land in Saudi Arabia and cantrol the Gulf thus fulfilling the Cherish dream.

The OPEC lately has been branded as a cartel of the "Oil Sheikhs" while the west has been projected as the explorers and the pioneers of the new find and also introducing a new source of energy for the world as a whole; not only that but also providing a source of revenue and development for the area. The politic-economic condition as it prevails in the Gulf today is really so because of the intentional manipulation of the oil consuming countries mainly to suit their own interests. The governments in the area are formed or are changed; countries are run-over, or are created, all designed with one objective i.e. to suit the interest of the west by keeping the oil flowing at a sub normal economic price.

The point is if the oil producing countries of the Gulf constitute a cartel, then so is EEC or the OECD or say the OAS. Even the Security Council with its permanent members exercising "veto-powers" must also be a cartel of one kind or the other! If a Sadam Hussain is violating the UN resolution so is Shamir of Israel and so is India in Kashmir - If Sadam is an aggressor so is Bush by his performance in the Panama and so is Shamir by hanging on in the Arab area all this time. Similarly is Gorbachov by not freeing Muslim State from the "Union" and so is India by invading Sri Lanka and Kashmir. The U.N. has imposed a trade embargo on Iraq for violating its Resolution; let us hope that a similar embargo is in the offing for Israil and India as they too are violating its Resolutions.
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Title Annotation:oil and international politics
Author:Manzoor, Nayyer
Publication:Economic Review
Date:Sep 1, 1990
Previous Article:Election 1990 -- uncertainty persists.
Next Article:KCCI memorandum for revision of tax measures.

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