Iran wants to eliminate US dollar from OPEC, because it is a worthless piece of paper. There are energy reserves in Alaska, reserves. Send in the troops, and they are well aware what they are fighting for, oil. Deplete other reserves before our own. In this view of political wisdom, Bush fights a war on terror, millions are displaced and hundreds of thousands are dead...$100/barrel is now the norm.

What is your thermostat set at tonite? 68 deg.

Very interesting article from a financial analyst, especially regarding its speculation over Turkey's reluctance to intervene in Northern Iraq. I guess everyone analyzes phenomena from their professional point of view. Financial analysts see economic causes and effect, political scientists like myself see political causes in effects, even in purely economic phenomena. For example, Timothy Mitchell of NYU, in his famous "McJihad" article, argued that there is not an oil scarcity, but an Oil surplus in the world, and that this has always been this way. Hence, Mitchell argued convincingly that U.S. needs Saudi Arabia, which has enough oil reserves for several planets, to "under-produce" so that the price of oil remains high, and oil business in the U.S. and around the world to be very profitable, as it is right now. Major oil producers are not extracting oil in full capacity, are they? Why would anyone produce more, when you can earn the same amount with less, by keeping the production low and prices high? Any discussion of oil then has to focus first and most on Saudi Arabia, as that country counts more than the rest of the Middle East (and the world?) combined in terms of proven oil reserves.

Greenspan has explained that he did not mean that the Iraq war was declared because of oil, but that the country would not have been a candidate for such an attack were it not for its oil. Those are very different points.

There will long be a debate on why in fact Bush was so dead set on attacking Iraq. Terror? Ego? Cowboyism? Revenge for Saddam's assassination plans against his father? Whatever the reason, I do not believe there is strong evidence that it was because of oil.

I also find the analysis alarmist and conspiratorial in expanding the framework to suggest that Iraq and Iran were an intended two-punch oil strategy. Seymour Hersh's reporting is convincing in revealing Cheney's advocacy of an attack on Iran. But that does not imply the two-pronged fossil-fuel war that you posit. Likewise, there is not compelling evidence that oil has been the reason behind Turkey's decision so far not to attack the Kurds in northern Iraq. It is more one of prudence -- the Iraq war would move right over the border into Turkey as a result of such an attack.

A crude shortage is looming, as you write. But as you otherwise suggest, the market very well could manage it.

Steve LeVine, author
The Oil and the Glory (Random House)
http://www.oilandglory.com

Alternative energy may be the levening agent that proscribes hegemonic oil wars, which by their cost consume resources. I expect the elections in the US next year to wean the nation away from oil and toward alternative energy.

Greenspan "confesses" the reason for the Iraq war? Does my memory fail me - was it the Federal Reserve that made the decision to go to war?

Greenspan can speculate, or perhaps even try to deduce, but he can't "confess" to anything - it wasn't his decision.

How strange, high oil prices are good for world
peace!
What about third world countries which cannot pay the bill, poor people who can no longer afford a warm meal because of skyrocketing prices?
It is hard nosed to suggest high energy prices being a boon for the world. By the way whose world?

Osman,

What I am talking about is a possibility of a war against the Kurdish Administration in Northern Iraq.

MD

The author is dead-on. America would be much better served by spending money on sustainable alternatives to petroleum than by pouring it into dominating the oil producing regions of the globe. Either strategy has its payoff, but producing sustainable energy kills far fewer people and flies a bit better internationally, as well as having some welcome environmental benefits.

Well said, altough one question: What type of war do you refer to through the loss of power of Liberals currently controlling Turkey? Are you talking about a civil war? Or are you saying a political clash between nationalist parties and the current party in reign could lead to disturbance in domestic affairs and external economy? If nationalist party gets the throne again, are you saying that, they would declare war to US (through declaring war to Iraq)? How realistic is this?

Indeed, the dynamics of integrated global markets are vital to determine the shape and scope of resolutions to political crises. Turkey, plays a cruicial role as an equilibrium point in the region and hence deploys a military and economic strategy based on stability.

Indeed, the dynamics of integrated global markets are vital to determine the shape and scope of resolutions to political crises. Turkey, plays a cruicial role as an equilibrium point in the region and hence deploys a military and economic strategy based on stability.

Thank you Mustafa for your insightful article.

The fact that oil has been a major, if not the most important, driving force behind imperial politics since its discovery in 1909 in Iran points to the necessity of factoring in the politics of energy (read oil) in analyzing the current tensions between the US and Iran. So let us not kid ourselves that this coming war will be one of prevention of nuclear proliferation.

Great overview of political and economic dynamics in the post-Iraq era, and their interrelatedness. Somehow disagree with the power the author is assigning to oil (or the lack of it) in pushing the world towards war - with new fields emerging in Brazil, old ones becoming economically viable due to the three digit prices, and the investment in ethanol & other alternative energy sources (wind & other kinetic turbines, solar, etc.), I don't think oil in itself will call the shots as much as it used to during the crises of the 70s and the 80s. The current power struggle, to my eyes, is a mere showdown of Cold War-like credibility concerns in a region that does bear the greatest wealth in today's world in trade (legal & illegal), geo-strategy, and -last but not the least- natural resources...