To: Crimson Ghost who wrote (37892 ) 2/21/1999 1:25:00 AM From: Pete Young Read Replies (1) | Respond to
George, Some here seem to forget that the Saudis are US puppets in many repects. They would never undertake to drive oil to $8 without US approval. I doubt very much the US wants to see $8 oil, but I have been wrong before. The Prize pp642-3 supporting the view that the US has considerable input on oil prices (or used to). But Washington did not want to aggressively force prices down. "The only chance to bring oil prices down immediately would be massive political warfare against countries like Saudi Arabia and Iran to make them risk their political stability and maybe their security if they did not cooperate," Kissinger, Ford's Secretary of State, explained in 1975. "That is too high a price to pay, even for an immediate reduction in oil prices. If you bring about on overthrow of the existing system in Saudi Arabia and a Qaddafi takes over, or if you break Iran's image of being capable of resting outside pressures, you're going to open up political trends that could defeat your economic objectives." Indeed there was some concern that the oil exporters might themselves suddenly drop the price substantially and thus undermine expensive new developments, such as those in the North Sea . As a result, there were discussions among the members of the International Energy Agency about establishing a "minimum safeguard price" to provide a floor to protect higher-cost energy investment in the Western world against an abrupt, perhaps politically motivated, slash in world prices.
