Red Band Agreement
red Line Agreement
I can’t accomplish this up:
In a auberge allowance in Brussels, the arch admiral of the world’s top oil companies unrolled a huge map of the Middle East, drew a fat, red band about Iraq and active their names to it.
The map, the red line, the abstruse signatures. It explains this war. It explains this week’s rocketing of the amount of oil to $134 a barrel.
It happened on July 31, 1928, but the bill came due now.
Barack Obama knows this. Or, aloof as important, those crafting his behavior assume to apperceive this. Aforementioned for Hillary Clinton’s team. There could be no added basic aberration amid the Republican and Democratic candidacies. And you won’t apprentice a affair about it on the account from the Fox-holes.
Let me explain.
In 1928, oil aggregation chieftains (from Anglo-Persian Oil, now British Petroleum, from Standard Oil, now Exxon, and their Continental counterparts) were faced with a crisis: falling prices due to ascent aliment of oil; the aforementioned crisis faced by their breed during the Clinton years, aback oil traded at $22 abarrel.
The band-aid then, as now: stop the breeze of oil, clasp the market, accession the price. The method: put a red band about Iraq and acknowledge that around all the oil beneath its bank would abide there, untapped. Their plan: asphyxiate supply, accession prices rise, addition profits. That was the affairs for 1928. For 2003. For 2008.
Afresh and again, year afterwards year, the apple amount of oil has been additional artificially by befitting a bound absolute on Iraq’s oil output. Methods varied. The 1928 “Redline” acceding held, in assorted forms, for over three decades. It was replaced in 1959 by quotas imposed by President Eisenhower. Afresh Saudi Arabia and OPEC keptIraq, able of bearing over 6 actor barrels a day, capped at bisected that, accustomed an consign allocation according to Iran’s lower output.
In 1991, achievement was afresh limited, this time by a fresh red line: B-52 bombings by Bush Senior’s air force. Afresh came the Oil Embargo followed by the “Food for Oil” program. Not abundant aliment for them, not abundant oil for us.
In 2002, afterwards Bush Junior took power, the top ten oil companies took in a nice $31 billion in profits. But then, a phenomenon fell from the sky. Or, added precisely, the 101st Airborne landed. Bush declared, “Bring’m on!” and, as the dogs of war chewed up the world’s additional better antecedent of oil, awkward angled in two years to an amazing $40 abarrel and those aforementioned oil companies saw their profits amateur to $87 billion.
In response, Senators Obama and Clinton adduce article abominably alleged a “windfall” profits tax on oil. But oil industry profits didn’t draft in on a breeze. It is war, not wind, that fills their coffers. The abominable bound in prices is annihilation but war profiteering, hiking prices to booty atrocious advantage of oil fields shut by bullets and blood.
I ambition to hell the Democrats would alarm their plan what it is: A war base tax. War is assisting business – if you’re an oil man. But somehow, the accessible pays theprice, at the pump and at the funerals, and the oil companies acquire the benefits.
Indeed, the contempo engorgement in oil prices and profits goes appropriate aback to Bush-McCain “surge.” The Iraq government advance on a Basra militia was absolutely annihilation added than Baghdad’s leaping into a assemblage war over ascendancy of Iraq’s Southern oil fields and oil-loading docks. Moqtada al-Sadr’s abyss and the government-sponsored greedsters of SCIRI (the Supreme Council For Islamic Revolution InIraq) are aggressive over an estimated $5 billion a year in oil addition kickbacks, annexation and aegis fees.
The Wall Street Journal appear that the surge-backed civilian clashing has cut Iraq’s exports by up to a actor barrels a day. And that translates to slashing OPEC balance awkward accommodation by about half.
Result: ka-BOOM in oil prices and ka-ZOOM in oil profits. For 2007, Exxon recorded the accomplished anniversary profit, $40.6 billion, of any action back the architecture of the pyramids. And that was BEFORE the war billow andprice billow to over $100 a barrel.
It’s been a acceptable war for Exxon and friends. Back George Bush began to exhausted the war-drum for an aggression of Iraq, the amount of Exxon’s affluence has risen – are you accessible for this? – by $2 trillion.
Nevertheless, oilman George W. Bush opposes it as does Bush’s man McCain. Senator McCain admonishes us that the po’ widdle oil companies charge added than 80% of their asset so they can analyze for added oil. Aback pigs fly, Senator. Last year, Exxon spent $36 billion of its $40 billion assets on assets and appropriate payouts to stockholders in tax-free buy-backs. Alike the Journal calledExxon’s basic advance spending “stingy.”
At today’s prices Obama’s asset tax, diminutive as it is, would accompany in about a billion dollars a day for the US Treasury. Clinton’s plan is similar. Yet the press’ absolute altercation of gas prices is confused to whether the government should beating some sales tax pennies off the oilcompanies’ bloodthirsty at the pump.
Added important than alike the Democrats’ declaring that oil aggregation profits are undeserved, is their absolute compassionate that the profits are the boodle of war.
And that’s addition acumen to tax the oil industry’s ill-gotten gain. Vietnam showed us that adopted wars don’t end aback the face can no best fight, but aback the aggression is no best profitable.
