Blood, Money, and Oil

(U.S. News) Mortimer B. Zuckerman - Any rational government that imports 55 percent of its oil every day would be crazy to stand aloof from the importance of Iraq's huge oil reserves. Right now the critical player in the Middle East is Saudi Arabia. It is a shaky, despotic regime that uses its vast revenues to sustain a corrupt living standard for about 7,000 princes in their pursuit of yachts, women, and liquor, and in support of a brand of religious extremism that has inspired many of their young to hate us--and seek our destruction. Saudi Arabia is the kingpin of the OPEC, a cartel for the rich that has held oil prices above a fair-market value for several decades. OPEC is currently controlling production to keep the world price at $32 a barrel and continuing to flaunt its monopoly power. The new factor is Iraq. The challenge is how to manage Iraq's role. How much oil Iraq produces will not only determine the living standards of its people but also affect everything from the Russian economy, uniquely dependent on energy prices, to the stability of Saudi Arabia, and indeed of Iran. In 10 years, Iraq could be the world's leading producer. The benefits of an Iraq independent of OPEC are immense all round. We would reduce our unwise dependence on Saudi Arabia. An Iraq outside the cartel could do what is best for its people and not for the cartel, whose aim is to sell less oil at higher prices.

2003-08-12 00:00:00

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