Tuesday, April 5, 2011

Oil could hit $200-$300 on first sign of Saudi Arabian unrest...


Oil could hit $200-$300 on first sign of Saudi Arabian unrest...

* Political discontent in Saudi Arabia is not resolved- says Ahmed Zaki Yamani

* "Surprises on the horizon" Yamani predicts...

* Consultant says Saudi Arabia is a ticking "time bomb", change is inevitable there despite all the succession struggles going on right now in the Palaces of Riyadh and Jeddah....

Emma Farge

LONDON, - Oil prices could rocket to $200- $300 a barrel if the world's top crude exporter Saudi Arabia is hit by serious political unrest, former Saudi oil minister Sheikh Zaki Yamani told Reuters on Tuesday.

Yamani said he saw no immediate sign of further trouble following protests last month calling for political reforms but said that underlying discontent remained unresolved.

"If something happens in Saudi Arabia it will go to $200 to $300. I don't expect this for the time being, but who would have expected Tunisia?" Yamani told Reuters on the sidelines of a conference of the Centre for Global Energy Studies (CGES) which he chairs.

"The political events that took place are there and we don't expect them to finish. I think there are some surprises on the horizon," he said in a speech.

Saudi King Abdullah offered $93 billion in handouts in March in an effort to stave off unrest rocking the Arab world.

So far, demonstrations in the Kingdom have been small in scale and police were able to easily disperse a Shi'ite protest in the oil-producing eastern province last month.

But Yamani said that the reluctance of people to participate in popular protests was merely concealing underlying discontent.

"Some people relax about the situation in Saudi Arabia because the Saudi Islamic brand prohibits people to go to the street and to talk," he said in a speech.

SAUDI TIME BOMB

Oil traded at two-and-a-half-year highs above $121 a barrel LCOc1 on Tuesday. Libya's rebellion has shut its oil exports, stoking fears of disruptions in other major producers.

Yamani, responsible for Saudi oil policy from 1962-1986, famously predicted in 1990 that crude, near $20 at the time, could rise to $100 a barrel if Iraq's invasion of Kuwait led to war.

In the event, oil peaked at just $41 because Saudi oilfields escaped damage in the first Gulf War and it was another 18 years until oil finally broke the $100 mark.

While some analysts at the CGES conference were sceptical that protests will break out in Saudi on the same scale as Egypt or Libya, Jaafar Al Taie, managing director of Manaar Energy Consulting, said political change in the kingdom was inevitable.

"I don't think that what the King is doing now is sufficient to prevent an uprising. Saudi Arabia is a time bomb, but one that is constantly being reset," said Al Taie, whose firm advises foreign oil firms operating in the region.

Saudi Arabia is the effective leader of the Organization of Petroleum Exporting Countries and the only country with any significant spare production capacity.

Riyadh has lifted output to replace some of the lost Libyan production but many traders and analysts doubt its potential to expand output further.

Yamani said it was struggling to quickly get extra volumes of a new grade of the low-sulphur low-density "sweet" crude required by European refiners missing Libyan oil to the market.

"It is not that easy when there is an interruption of the supply in oil in Libya...We don't forget that Libyan oil is very light and it's a short-haul. There is a replacement, but not without difficulties."

Leo Drollas, deputy executive director at the CGES, said the kingdom had provided over half or 550,000 barrels per day of the extra barrels pumped by Gulf countries to replace lost Libyan supplies. Kuwait and the UAE have also contributed additional output.assessment that it is the western press who are the only ones who are concerned about the stability of Saudi Arabia .... the fact is that some within the Saudi establishment itself are also concerned about recent trends and developments in the Middle East.

What is my take .... if Shiite minority demands are not accommodated as well as the needs of the young to have some form of progress in reforming the system ..... unrest and instability will be the end result for Saudi Arabia whether it is next week, next month, next year, or a few years down the road.....


We in the west may wish to view the Middle East turmoil as a battle between youthful “tweeters” yearning to breathe free vs. tyrannical dictators, but the situation is far more complex than that and the utterly corrupt USA/Israeli Governments are doing their best to capitalize on those tribal differences ever since the Kissinger satanic plans were drawn in the 70s...; in order to bring about Hundreds of Tribes with Flags in Eurasia; MENA and Africa.... Think about it. From the Middle East to equatorial Africa, you see it over and over again: A dictator in power for decades has plundered his country and amassed a vast personal fortune, while suppressing the “rights” of untold numbers of his countrymen. Yet when the political tides finally shift and the end is seemingly inevitable, he refuses to step down – preferring even to throw his country into bloody civil war. We in the West view these “leaders” as quintessentially evil. And yet, surely there is something deeper at play here than simple malevolence. A merely evil person would simply take his fortune and run to a luxurious “exile.” Why do these despots cling to power so tenaciously, even at the risk of losing everything – including their lives, truly believing that they are “right” to do so?

The answer to this question lies in the dominant political and cultural force in much of the Middle East and in Africa. It is a force that is largely unappreciated by westerners, and Americans in particular, for it plays little role here. That force is TRIBALISM – the loyalty felt and owed to members of one’s own tribe, over the myriad other tribes with which it competes for power and resources. It is a much stronger force than patriotism because it is rooted in blood and the kinship of extended families. What we westerners view as “corruption” – graft, nepotism and illegal patronage is considered not just the norm, but a duty in these countries. Other tribes may resent the leader in power for patronizing his own, but given the opportunity, they would do the same. The tribe comes first.

The importance of tribalism to the psyche of these “leaders,” can hardly be overstated. Tribalism was at the root of the genocidal carnage in Rwanda between the Hutus and Tutsis. It is why the Baathists in Iraq, whose senior members were part of Saddam Hussein’s Albu Nasir tribe, fought fiercely to protect his regime – and their privileged position in it. It is why Gaddafi’s tribe, the Qadhafa, or the Syrian President Assad’s tribe, the Alawites, will fight just as fiercely to support them. It is why Laurent Gbagbo in the Ivory Coast or Robert Mugabe in Zimbabwe will cling to power until they are forcibly ousted: It is their DUTY to their tribe on which they have bestowed decades of largesse and have received their loyalty and support in return. Abdicating power also means ceding the authority and privileges of the entire tribe. This cultural imperative is all the stronger in leaders of military background, for whom the soldier’s concepts of duty and honor are bound together with tribal allegiance.

This is also why colonialism has been so destructive in these regions. Mixing these tribes together in some artificial geopolitical entity that we call a “country,” and expecting them to “share” its resources “fairly,” is a purely Western concept. It is a recipe for continuous strife until one tribe garners sufficient power to install a “strongman” in the leadership role and forcibly suppresses other tribes in this ersatz “country,” plundering its resources for himself and his tribe. It is a winner-take-all system, and always has been. “Peace” lasts only until another tribe, or temporary alliance of several tribes, obtains sufficient power to overthrow the existing order in favor of their own. This is what is occurring in many countries in Africa and the Middle East today. Until we in the West at least appreciate this seemingly alien concept of tribalism, we will blunder into these inter-tribal civil wars. We may think we are protecting innocent civilians, and perhaps we are, but we are also taking sides in what are essentially tribal conflicts, some of which have been ongoing for centuries....




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