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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (195)	10/10/2000 2:44:22 PM
From: ahhaha	Read Replies (1) \| Respond to of 24758

Arabs part 2: 10/10/2000 16:00 - (SA) Arabs unlikely to use oil weapon Michael Georgy London - For Arab states enraged by Israeli killings of Palestinians, there could hardly be a better moment to unsheath the oil weapon and punish Western support for the Jewish state. But at a time when prices are high and rich nations are crying out for more oil, the signs are that Arab producers are unwilling to risk a petrodollar windfall by cutting exports. "This is not even being talked about. It is not being considered. It is out of the question," a source familiar with Saudi thinking told Reuters. "Using the oil weapon would be using a weapon against ourselves. We woud lose status in the world order and our economies would be hurt," he added. Twenty seven years after the Arabs imposed an embargo and brought the US economy to its knees for supporting Israel in war, the Arab oil embargo is a fading memory as Palestinian stone-throwers face off against Israeli troops. The mixture of production cutbacks and export bans from October 1973 to March 1974 helped quadruple oil prices, triggered panic at the pump and gave Arab producers unprecedented leverage over everything from White House policy to the standard of living of millions of motorists. The move, in protest at US support for Israel during the 1973 Arab-Israeli war, changed lifestyles and in the words of then Secretary of State Henry Kissinger would "alter irrevocably the world" as it had grown up in the years since World War Two. But the weapon unsheathed to such stunning effect a generation ago looks highly unlikely to be used a second time. From the teeming streets of Cairo to Arabs glued to the nightly news in the West, Arabs are fuming after at least 90 people, mostly Palestinians and Israeli Arabs, were killed in clashes between Palestinians and Israelis. In an Arab tea shop along London's Edgware Road, customers described what they said were the realities of oil politics. "We don't have an oil weapon because the Arab people don't control the oil. It's the governments and the royal families," said an elderly man playing backgammon. "I don't want an oil weapon now. I want a nuclear weapon." At a nearby table, a Kuwaiti said: "Arabs can't agree on the price of oil. How are they going to agree on an embargo today?" The crown prince of Saudi Arabia, the world's biggest oil exporter, on Monday warned Israeli Prime Minister Ehud Barak against Israel taking military action in Lebanon and Syria. OIL EMBARGO JUST A MEMORY "Barak has to think before taking any step...and nobody should think that the kingdom of Saudi Arabia and the whole Arab and Islamic nation would just watch with their hands tied," Crown Prince Abdullah said. He did not specify what action Saudi Arabia might take. But the source familiar with the kingdom's thinking said on Tuesday that Saudi Arabia would not consider the option of holding back oil supplies to the Western countries to pressure them into reducing support for the Jewish state. These days, petroleum-dependent Opec producers need oil revenues to fill coffers, tackle deficits and stave off the spectre of unemployment by creating jobs for youths. An oil embargo might stir particular instability in Gulf Arab states, recipients of strong US military support and committed to paying huge welfare handouts to fast growing populations used to grade-to-grave welfare. Even Iraq, the oil market's wildcard and maverick, said before the latest surge in violence that it would not be in its interest to halt exports. It seems the only leader talking about the oil weapon is not an Arab, but Venezuelan President Hugo Chavez. In April, he proposed to strengthen the Organisation of the Petroleum Epxorting Countries as a "negotiating weapon in the service of the nations of the South (developing countries)." Arab-dominated Opec, meanwhile, is scrambling to knock down prices after a series of production hikes failed to take the heat of the market. It is also busy trying to polish its image, promising a steady flow of crude to the West and constantly calling for cooperation between oil producers and consumers. But pressure for a revival of the oil weapon will grow if Muslim militants calling for such a move start to make Arab governments uncomfortable. "If militant leaders start discussing this taboo subject, it will put pressure on Arab leaders," said Roger Diwan, of Washington's Petroleum Finance Company. The Arabs would have to lift more oil if they got into even a limited conflict because in the aftermath they would have to buy substantially more weapons and pay for more preparation for trouble. There is another concern and that is a militarized area makes the containment of Sadam Hussein more problematical.