Oil as a Weapon
High gas prices have been squeezing the consumer world wide, but perhaps nowhere else in the world is this as evident as in the United States. Buoyed by our historical enjoyment of low energy prices, a strong belief in individualism and strong economic development, we have become the highest per capita consumers of petroleum in the world. But our unsustainable consumption is magnified by the fact that we are heavily dependant from foreign oil to fulfill this demand. While a most of our oil is not sourced directly from the middle east, the global commodity exchange markets ensure the price stays relatively consistent world wide.
As our lifestyle is heavily sustained by our oil consumption, we are at the largest risk to be affected by supply disruptions. Prices are at all time highs and there is not much incentive to increase production to ease supply worries. Countries like Iran that produce large amounts of oil can simply threaten non-compliance with international demands... and oil spikes another $10 a barrel (or more). This geopolitial manipulation of the oil markets positively reinforces those who create market instability. Thus we have been taken hostage, and the the weapon is oil. Economic blackmail is the name of the game.
Terrorist attacks are easy to identify and stick out easily in the public perception. But when oil is used as a weapon, the effects are more subtle but can be disatrous on a larger scale. Lower income populations with limited resources are the first to feel its effects. Their consumption patterns and daily activities are modified from the outset. They are also affected as the effects ripple throughout the economy, raising the prices on all the other products that they consume. This will invariably cause a large number of people on the margins of poverty to fall further into poverty. People wanting to maintain their lifestyle will have to dedicate a larger percentage of their incomes simply to drive to work, run errands or visit relatives. The middle class (particularly those with children) will find that they have to make choices that they didn't have to make several years ago. Less money gets put into savings or investment, and this makes saving for retirement more difficult.
US automakers, for years enjoyed strong sales fed by a desire for sport utility vehicles. But both Ford and GM are in dire circumstances as the demand for these vehicles has all but dried up. Increasing costs from fuel have no doubt have helped lead to further outsourcing of US jobs and infrastruture. And the president's refusal to release oil from the strategic reserve to help alleviate record prices is a sign that a Texas oilman cannot be trusted to act in the public's best interest (even though France has decided to release oil from their own strategic reserve). What we are seeing here is a market under full speculation.... prices are not following market fundamentals and supply is continuing to meet or exceed demand. In a recent Reuters news piece, an OPEC spokesman stated " it strongly believes that fundamentals are not supporting current high prices and that the market is very well supplied" and the piece noted that high prices were the result of "rampant speculation by big money investors rather than any shortage of supply".
Thus we should be wary of this new form of economic terrorism. Geopolitical manipulation of the oil markets negatively affects every single American in some shape or form. It is driving more Americans into poverty and adding to the crisis that is devaluing our currency. It's funding weapons development and procurement of our potential adversaries. Its perhaps not only our moral obligation to be less wasteful in our daily consumption, but it is of vital importance to our nation as a whole. It is a national security issue. Do your part to use less.
As our lifestyle is heavily sustained by our oil consumption, we are at the largest risk to be affected by supply disruptions. Prices are at all time highs and there is not much incentive to increase production to ease supply worries. Countries like Iran that produce large amounts of oil can simply threaten non-compliance with international demands... and oil spikes another $10 a barrel (or more). This geopolitial manipulation of the oil markets positively reinforces those who create market instability. Thus we have been taken hostage, and the the weapon is oil. Economic blackmail is the name of the game.
Terrorist attacks are easy to identify and stick out easily in the public perception. But when oil is used as a weapon, the effects are more subtle but can be disatrous on a larger scale. Lower income populations with limited resources are the first to feel its effects. Their consumption patterns and daily activities are modified from the outset. They are also affected as the effects ripple throughout the economy, raising the prices on all the other products that they consume. This will invariably cause a large number of people on the margins of poverty to fall further into poverty. People wanting to maintain their lifestyle will have to dedicate a larger percentage of their incomes simply to drive to work, run errands or visit relatives. The middle class (particularly those with children) will find that they have to make choices that they didn't have to make several years ago. Less money gets put into savings or investment, and this makes saving for retirement more difficult.
US automakers, for years enjoyed strong sales fed by a desire for sport utility vehicles. But both Ford and GM are in dire circumstances as the demand for these vehicles has all but dried up. Increasing costs from fuel have no doubt have helped lead to further outsourcing of US jobs and infrastruture. And the president's refusal to release oil from the strategic reserve to help alleviate record prices is a sign that a Texas oilman cannot be trusted to act in the public's best interest (even though France has decided to release oil from their own strategic reserve). What we are seeing here is a market under full speculation.... prices are not following market fundamentals and supply is continuing to meet or exceed demand. In a recent Reuters news piece, an OPEC spokesman stated " it strongly believes that fundamentals are not supporting current high prices and that the market is very well supplied" and the piece noted that high prices were the result of "rampant speculation by big money investors rather than any shortage of supply".
Thus we should be wary of this new form of economic terrorism. Geopolitical manipulation of the oil markets negatively affects every single American in some shape or form. It is driving more Americans into poverty and adding to the crisis that is devaluing our currency. It's funding weapons development and procurement of our potential adversaries. Its perhaps not only our moral obligation to be less wasteful in our daily consumption, but it is of vital importance to our nation as a whole. It is a national security issue. Do your part to use less.