Bush and Rice talk about the democratic "cedar revolutions" in the Middle East while just about everybody else watches oil prices. The Saudi oil minister last week forecast that prices will stay between $40 and $50 per barrel for the rest of the year, while Adnan Shihab-Eldin, OPEC's acting secretary-general, says a major disruption like the Iraq ware.g., an attack on Irancould send prices up to $80 over the next two years. These prices are not just a reflection of the sorry plight of the dollarthe figures are rising in both euros and dollars.
Today's announcement that OPEC oil ministers have agreed to lift the organization's production ceilings by an extra 500,000 barrels probably doesn't mean much since the members already are producing over the ceiling of 27.5 million barrels. "They are raising the ceiling because it's already produced," Libya's energy secretary Fathi Hamed ben Shatwan said, according to Agence France Presse.
This news is accompanied by a widening belief that world oil production may well have peaked. Since oil was first extracted in large quantities just over a century ago, world politics has been concentrated on containing a surplus, not parceling out a shortage of oil.
If we are indeed facing a diminished supply, talk of democracy will go into the trash bin, and we will dispatch our military to guard a supply that we can call on to sustain our way of life. Shorn of all the PR, that's what Bush is talking about when he extols democracy abroad.
U.S. forces are already deployed around the world to protect the foreign oil supply on which the U.S. relies. Since the energy crisis of the '70s, the U.S. has reduced its reliance on Middle Eastern oil while attempting to diversify the supply by draining more oil and gas from Canada and Mexico. We are well on the way to transforming the former Soviet republics in Central Asia into a chain of armed U.S. redoubts to guard the Caspian oil finds. In Latin America we are trying every way possible to overturn Hugo Chávez in Venezuela, a longtime oil provider, and we have put Special Forces into Colombia to fight the drug war, but also to protect oil pipelines. And in West Africa we are eagerly eyeing new sites for military bases to protect our exploitation of oil reserves in these former colonies of old European empires.