America prepares to ride oil price wave
28 Feb, 2011 08:13
The violence in the Arab world has sent oil prices soaring, with some suggesting it is only the beginning of a huge hike.
Oil affects the global cost of everything from food to transport and also threatens to stifle economic recovery. Protests in Arab countries seem to fuel one another; unrest is spreading like wildfire through the Middle East and North Africa. The protests are raging in or near oil-rich countries that help fuel the world’s use of more than 84 million barrels of crude a day.Uncertainty over oil production has sent prices skyrocketing, meaning the shockwaves from the Middle East turmoil are being felt worldwide.“Oil is the most viable resource on the planet today and who controls it is extremely important,” reminds Sara Flounders, co-director of International Action Center.Now the Middle East crisis is hitting home for average Americans as oil has skyrocketed so too have the prices people pay for gasoline and now the price Americans pay at the pump threatens to derail the US economic recovery.“A surge in oil prices will be the end of the US economy, not just an end to the recovery – there's no more bailouts left,” Michael C. Ruppert, author and CEO of Collapse.net, warns.A reality peak oil, as Ruppert sees it, will be happening if oil hits US$150 a barrel, which he believes is inevitable this year. Others predict it going to $220. It is so devastating because oil fuels more than just cars – it fuels the entire global economy. Though there is no doubt that if gas goes to US$5 a gallon for average Americans, as some predict, there would be a high political price to pay for the Obama administration, too.“If gasoline prices go up too much and for a long period it [Obama administration] could face severe political impact,” predicts Steve Levine, contributing editor of Foreign Policy.Yet there is no denying the US has played a role in the events that have transpired in the Middle East: every time US President Barack Obama went to the podium calling for “political social and economic reform” in Egypt and calling for Egyptian President Hosni Mubarak’s resignation, he was calling for an end to the status quo, which means a rise in uncertainty in the oil rich region. So did leaders weigh up the toll it could take their own economy?“They're kind of trying to push their back against an avalanche and I don't think they're going to have a lot of success,” Michael C. Ruppert said.That may not stop the US from trying to take control of the situation, suggesting the US could have a certain interest in removing Gaddafi so as to gain control over Libya's massive oil reserves.The US may even intervene militarily under false pretenses of helping the protesting people.“It has nothing to do with interest of the people of Libya. It has everything to do with the interest of US oil corporations, the military corporations – in super profit,” Sara Flounders reveals.Either way, analysts say the price of fuel going up will simply fuel public rage and the government is largely helpless.“The American people are going for a very nasty ride and there is no way out of it now, but I can tell you the government understands that it is coming,” Michael C. Ruppert concludes.