So to satisfy my curiosity I did a little research as I pondered the oil question. Here are some of the questions I asked, some of the results I found and some conclusions and questions that remain.

The first question is who's responsible. The automatic assumption on the part of most Americans is of course, OPEC, or the offical codename for 'the Arabs'. In fact, there are several reasons. The first is the greatly increased demand for oil, especially with the resurgence of the Eastern economies. (See the World's thirst for Oil, BBC Report). Another is the tight supply. The OPEC countries, with the exception of Sudi Arabia are producing at capacity. Add aging tankers, refining capacity that is now operating at flatout capacity, and low reserves and you have our current situation. (See Tight Supply, Logistical Bottlenecks to Push Oil Prices Higher, Stratfor).

Another contributing factor is the spate of mergers over the last few years. The merger between Chevron and Exxon last week being onoy the latest example. Buying each other up is consuming funds of the oil companies that might otherwise go to exploration and drilling. (See Oil Prices Could Trigger Cut In Growth, World Socialist Website).

My second question regards OPEC. How powerful is it? Is it this monolithic entity that has the rest of the planet by the throat? In fact, OPEC is a house divided against itself. Only two countries, Saudi Arabia and Kuwait have small populations and tremendous reserves, which makes them more amenable to pumping large quanties of oil at lower prices. Other nations, such as Iran and Nigeria with smaller reserves and large populations, favor a more conservative approach, so they can maximize their return on their only asset. (See OPEC: the Oil Cartel, BBC Report). And, in fact, OPEC agreed to a price drop back in July (See Oil price fall threatens OPEC deal, BBC Report). Finally it has to be realized there is only so much OPEC can do. Says one analyst, "It hardly matters how much OPEC raises production because there is no time to get the oil out of the ground, into refineries and eventually into power stations before (the northern) winter". (See Oil Prices Could Trigger Cut in Growth).

The third question is, "Who is is that suffers the most from increased oil prices"? Developing countries suffer disproportionately (See Oil prices hurt developing countries, BBC). The center of manufacturing has moved to the 'Third World' and manufacurting is more oil dependent than is information processing, the favorite economic activity of the 'first tier' nations (U.S.A., U.K., Canada and Australia ) as they are called by Stratfor ( See Stratfor, The Geopolitics of Expensive Oil) and (Who's Afraid of the High price of Oil). In fact, 'first tier ' nations are even likely to profit from high oil prices. In addition, the impression that America is dependent on oil from the Persian Gulf is not true. We import only half of our oil from overseas. Canada and Mexico supply us with twenty-nine per cent of our oil imports. We are dependent on the Persian Gulf region for only (13%) thirteen per cent of our total oil usage.

In Great Britain and in European countries people pay a great deal more for gas at the pump.which explains the protests this September. Brits pay the equivalent of $1.25 a litre for petrol where Americans were paying at the most $2.00 a gallon. (See Fuel protests escalate throughout Europe, WSWS). Europeans are taxed much more heavily than Americans for the fuel and their economies remain far more dependent on oil (See Oil, Power and Politics, Stratfor). Also (See Europe Fuel protests Escalates). Another reason for the crunch is that due to computer fine-tuning, inventories of oil are no longer kept past a few days need (See What if fuel runs dry?, BBC).

The fourth question on the list would then have to be, "Who benefits from high oil prices"? One of the chief requests of protestors in Europe last month was to reduce their tax burden. ( See Tories pledge fuel cut, BBC). Naturally people whose livlihoods are being threatened by high oil prices want relief. Just as naturally, oil companies benefit as does OPEC, if tax cuts are the result of citizens protests ( See Why Big Oil Backed the Fuel Protests in Europe, The Globe and Mail). Saudi Arabia, America's number two ally in the Mideast recently asked for $2.7 billion weapons package, a humble request in comparison to the $17 billion arms request put in by Israel last summer but one that will lead to further arms build-up for one side of the conflict in the Middle East and one that will benefit big arms sellers such as Raytheon and Boeing. (See the High Price of Oil: A Saudi Deal?)

'High but not too high' might be the refrain of the oil interests. Dick Cheney and Halliburton are certainly in good standing as members of that league. (See Cheney Led Halliburton to Feast at Federal Trough, the Public i). Cheney is an Iran man according to the Washington Post (Cheney and the Great Game, August 27, 2000) and differs from this Administration approach to oil in that he supported opening relations with Iran rather than going after untapped and as yet, undeliverable oil from the Caspian region. But more on that next time.

And finally who objects to the 'Oil Game pecking order'. Venezuela for one, which signed a deal with other, less monied Central and South American countries to deliver cheap oil ( See Venezuela signs cheap oil pact, BBC). Not coincidentally, Hugo Chavez visited Iraq this summer much to the Clinton Administration's consternation. Both Iraq and Venezuela are, or have been, socialist in their orientation and both are quite close to large U.S. military outposts, or countries receiving large amounts of American armaments. Plan Colombia delivered nearly $1 billion of Blackhawk helicopters and other hardware to fight the 'drug war' this summer. There are over 40,000 US troops in the Persian Gulf region, a number which was increased by 2000 this week after the Cole explosion.

Russia, too, is not heeding the call to pump more oil and so will not raise export restrictions but is instead, taxing exports more. Their rational is that as prices are falling, the price would stabilize at the point that oil companies can make a profit and the government can run a budget. Oil companies did not agree. (See Oil matters: oil prices start sliding, Russia Journal).

And to end, a post script. It would seem that if Iraq, which has the second largest reserves of oil, had been participating in the world oil markets for these past ten years there would be no oil crunch. And that in turn, leads me to ask if Iraq has been economically isolated for all these years for reasons other than Saddam Huseein's halitosis. Maybe!!!

Next week, Caspian complexities.