Tag Archives: Saudi Arabia

Oil Prices: Saudi Pumping Surge & US-EU Iran Strategy

What are the factors driving up the price of oil? Some cite fundamentals, others over-active speculation,

Persian Gulf & Middle East (UTex Lib. 2008)

and there are certainly major geopolitical issues in OPEC‘s Mideast and North African (MENA) member states–which is what this post is about.

The Present Saudi Pumping Surge is a Key Element of the US & EU Iran Sanctions Strategy

It is certain that the Iran confrontation will only intensify as the mid-summer sanctions deadline approaches.  By July, Washington and the EU hope to significantly curtail Iran’s ability to export oil.  In this situation, it is perhaps surprising that prices have not gone higher.

This past week, the normally understated Economist, while noting the Saudis’ extraordinary efforts to pump excess capacity, nevertheless warned that the Iran crisis could trigger a worst-ever oil shock:

Continue reading

Part I: Venezuelan heavy oil: China’s persistence is finally paying off

In my travels and interviews in Venezuela this summer, it became clear that there has been a major advance in the relationship between China and the Bolivarian administration of President Chavez.  China’s dogged persistence and large state-sponsored investments in Venezuela – apparently the largest they’ve made to date in any country – are finally beginning to bear fruit.  The new Chinese influence is being simultaneously extended to both oil and non-oil sectors. 

Partly this development is due to the many crises affecting the Bolivarian state, and decisions it has been forced to take to make increasing national oil production a priority.  To advance this program, President Chavez’ administration has made initial moves to grant Beijing access to Venezuelan oil in major ways it had not previously. 

However, there are two sides to this story: on the other side, increasing Chinese participation is also a product of China having step-by-step put some quite sharp demands on PDVSA and the Venezuelan Bolivarian state for financial transparency and accountability, for geopolitical stabilization, and in particular, for Chinese firms being granted large-scale access to new heavy-oil fields in the Faja of the Orinoco River.  The key ingredient here is that Continue reading

Cracks in OPEC – Political-Economic basis for two factions with two different geopolitical roles

Northampton, MA (Area of “the five colleges,”  UMass Amhers, etc.)

On Thursday, the lead headline story in the WSJ asserted “New Cracks in Oil Cartel: OPEC Fails to Agree on Production Boost Amid Rising Saudi-Iran Tensions.”  The “cracks” may have widened at this meeting, but they are hardly “new.”  Continue reading