James Leigh

The Saudis are exploring the opportunity to sell their oil on more transparent exchanges in which they feel they have some logical control over production levels and pricing in relation to world demand, and also be paid in currencies outside the anemic US dollar. Such a mover would be a great influence on all of OPEC. This has crucial implications for the US as it could take oil trading from US exchanges and eventually outside the dollar as the currency of trade.

Oil price in July 2008 reached a staggering $147 a barrel, having doubled in price over the previous 12 months. Who would have thought, that within half a year, a dramatic oil-price freefall would bring oil to a 5-year low of $35 a barrel – a price drop of 76%.

However, even though many have sighed in relief, experts are heralding new dramatic spikes in oil prices.

In this paper it is shown that the concentrations of Shia Islamic peoples, in the Persian Gulf, are in the same areas as the oil fields and petroleum infrastructures. This is significant considering the growing influence these Persian Gulf oil producing countries will likely have due to their high levels of oil production and the possession of most of the world’s oil reserves. Considerable strategic geopolitical developments can be expected from this concentration of “petropower” in the Islamic Persian Gulf nations.

It had seemed abundantly clear over the year beginning mid 2007 that rampant economic development in less developed countries, along with the maintenance of economic development in more developed countries, spooked the oil markets. After all both China and India were growing economically at around 10% level.
However, that may be changing.

In the first half of 2008 we saw oil climb to approach $150 a barrel amid the pundits’ warning of oil rocketing to $200 a barrel and way beyond due to the phenomenon of Peak Oil. In the wake of those heady days we have now witnessed the slumping of oil prices to well under $100 a barrel into October.
So what is happening to cause the retreat of oil prices?

Americans may have a vulnerable Achilles heel made up of two gulfs: the Gulf of Mexico and the Persian Gulf .

This paper will look at how hurricane activity in the Gulf of Mexico, and a selection of other world events in the Persian Gulf, could turn off the oil spigot and bring the USA to a critical standstill, highlighting the urgency for the development of a different civilization, free of addiction to massive doses of oil.