[Shermy]

The point is to lessen Saudi power, and lessen their take, I think. This will lessen their sponsorship of terror and spread of Wahhabism. Other countries are ittching to take away OPEC rations from Saudi, which has accorded itself with a proportion far in excess of its population - but they're quite in debt...

The article reads a little like Saudi talking points. But one thing is striking about it - failure to mention natural gas. Iraq has plenty of it. Iran enormous amounts. Russia even more. Saudi has less than Qatar, by fluke of geology. The world, especially Europe, is moving to a natural gas dominated economy, substituting oil. Iraq is situated, via lines through Turkey, to be an efficient exporter of gas to Europe. This is the trend in the industry, little commented upon.

"Russian and French companies have been cutting deals with Iraq to develop its oil resources"

Now you have to throw Turkey into the mix, because they are going to claim suzreignty over the Turkoman regions of North Iraq, around Mosul and Kirkuk, much of Iraq's resources are there. Such also explains French and Russian intense "interest" in Iraq. France, via Fina/Elf and other companies, has been playing the rogue state card against the USA, focusing investments in countries that USA won't deal with - Iraq, Iran and Libya. Esp. Iran. They commit little sabotages like siding with Iran that Central Asian oil would be cheaper to transport thru Iran, which is patently untrue...

Back to Iraq. Iraq could void the deals with France and Russia, that's the cards we hold against them. that's why they're so concerned about the outcomes. I bet Saddam has oversold about 1000% of the rights to Iraq resources, which will be interesting to see how the rights holder deal with.

The way I see it, the target is to lessen the Saudi take. Developing Iraq, having Nigeria and others demand increases in production rations, non-opeckers like Angola and Russia increasing there production, and overall, the increase in natural gas usage will help this target.

Money has a cost - to whom it goes. Saudi Arabia is our enemy, not that we deserve it, but it's the outcome of their extremism and culture.

I saw NY Times Thomas Friedman on the toob the other day, he of the "NYTimes/Saudi peace plan fame. Guess They're not his pals anymore. He told, in his "surprised" kind of way, how a UAE citizen cozied up to him and told him "Don't believe the Saudis - Osama bin Laden lives in every one of their homes."

[Redcloak]

Friedman was on NPR the other day. (No, I don't listen voluntarily... It's somebody else's radio!) He ridiculed the idea that "big oil" would benefit from a war in the gulf. Yes, prices would spike, but over the long haul, increasing Iraqi production would lower oil prices and lower their profits. The granola munching interviewer on NPR was incredulous, of course, but Friedman's logic was too much for her.

[marron]

The point is to lessen Saudi power, and lessen their take, I think. This will lessen their sponsorship of terror and spread of Wahhabism.

I absolutely agree with your take. I call this "serendipity". I get annoyed with people who try to demonize our situation in the middle east by saying "its just about oil". Nevertheless, as we go in to tidy up unfinished business in Iraq, it will have a direct effect on the oil market. There will be a short term spike in oil prices just from uncertainty, followed by a long term softening of prices as Iraqi oil comes back on line.

The original article is trying to say that it won't make that much difference, but I believe they are mistaken. They say it will take 5 years to increase output by 20%; I am betting in 5 years it will be closer to double. Iraq has no reason to limit its market share just to please the Saudis, or the Iranians. They have a country to rebuild.

But even in the absense of Iraqi oil, the market is softening. Kazakh output is increasing dramatically each year. We are betting the farm on the pipeline out through Turkey, which is due to be built within a couple of years, but even without it, the network of pipelines out of the Caspian is increasing year by year.

There is a push to increase African production, between Nigeria and Sao Tome and Chad, all of which can happen within a couple of years.

Then there is the simple fact that OPEC production limits are eyewash. Every OPEC country is in a push to double its production. They tout production limits in hopes that their OPEC partners will be convinced to limit production, and meanwhile every one of them that can is violating the limits, and working like crazy in the background to expand.

My position is that OPEC has taken its place on the shelf of "make-believe" organizations, right up there next to NATO and the Lolly Pop Guild. It has no teeth. It has no ability to manipulate the market beyond a temporary spike.

Usually when they announce production cuts, its just to mask temporary cuts due to maintenance shutdowns, which quietly evaporate as soon as the fields are ready to come back on line. But no one outside of the newsroom actually falls for it; certainly not their OPEC partners.

You brought up an important point concerning the Russians and the French. In violation of sanctions they have negotiated concessions which are useless until after Saddam falls. They will no doubt require that we promise to honor these concessions in order to get their approval for military action.

But in the absense of positive assistance, which we are unlikely to get, we have no reason to honor those concessions. On the other hand, you put your finger right on it, there is every reason for Turkey to get closely involved in Iraq's recovery. I believe if Turkey wants to get through this with its eastern provinces intact, Turkey needs to become Iraq's big brother. Turkey needs to become heavily invested in Iraq's oil and gas industry. Pipelines need to be built out to Turkish refineries (I believe some already exist). Turkey needs to help politically to design a Federal Iraq, and to help professionalize Iraq's military.

All of these steps are necessary to have a chance of guiding Kurdish aspirations. And, frankly, it may not work. But who, besides the Kurds, benefits if war continues? The Saudis, radical Iran, Russia? Al Qaeda? Then this is where efforts to manage the situation must be directed. Russia will get her piece of the pie. The Saudis will desist or be dealt with energetically. Iran must be the target of policies to bring the return of democracy. Al Qaeda is going to be hunted down like animals, until they also take their place on the shelf.