Saturday, March 19, 2011

OIL Speaks in Libya and Saudia

Blood for Oil appears to be the militaristic 'roadmap' imposed upon civil societies in Libya and Saudia.

The erstwhile imperial colonial powers France, the US, UK and their despotic, previously colonized Arab Allies are spilling blood from the air in Libya.

The bloody ethno-religious rivalries and geopolitical fault-lines are greased by sweet crude.

Q. What would have happened if all 22 nations of the Arab League plus ALL the voting/ non-permanent voting members of the UN Security Council had endorsed HUMANITARIAN ACTION, instead of Military action in Libya?

Q. Would there be fewer civilian deaths in Libya? Probably.

Q. Would there be better information,about what's actually happening on the ground in Libya from groups like Medicins sans Frontieres, the International Red Cross and Human Rights Watch, rather than from the US State Department and CIA operatives? Probably.

Instead, Saudia, the staunchest US ally (and most reliable oil supplier to the US), Saudia has headed the Arab League decision last Saturday to ask the UN Security Council to vote (which of course is not a UNGA vote) to implement a no-fly zone over Libya. A no-fly zone means war. Call it what it is. War.

The one thing that Saudia's leaders (ditto the US) do not want, is a spillover in Saudia, of civil society pro-freedom protest, from Egypt, Yemen and Bahrain, a pro-freedom protest in Saudia's streets, to overthrow the US-supported House of Saud.
If the House of Saud fell, that would be a game-changer that would probably end the blood-for-oil foreign policy of the US.

Saudia, to show its loyalty to the US (and Saudia's Prophet-for-Profit oil arrangement with the US), Saudia just rushed its own troops into Bahrain against the 'rebels' there, to protect US interests (The Fifth Fleet). That freedom movement in Bahrain does not count, why, because the US Fifth Fleet is stationed in Bahrain to protect Israel against Iran, which is perceived as a threat by Israel, the US and Saudia Arabia.

Clearly the US has its favored despots and its favored rebels. Bahrain's freedom-fighting rebels can be abandoned because the US wants Bahrain's despot to protect its Fifth Fleet. US Democracy, questionable as it is upon closer scrutiny, is not for export.

Q. Why did the Arab League call for military action under the UN banner?

A. Because the Arab feudal despots really, really care about their citizens' human rights to free speech, women's equality, freedom of assembly and street protest to topple their autocratic rulers? We know the answer to that one.

Secretary Clinton acted to safeguard oil delivery to the US from Saudia and at the same time to safeguard the delivery of that oil, by safeguarding the absolute rule of the House of Saud over the people of Saudi Arabia.

The Saudi people can kiss human rights goodbye for at least a few years, unless the Saudi people themselves, especially women, rise up against their own obsolete, rights-denying, male-predominant, misogynist monarchy.

The US is now leading the Arab League/UN Security Council (not to be confused with the UNGA) charge upon Libya, because a limited US military action could also guarantee access to Libyan oil, if Gaddafi is weakened or overthrown. If Gaddafi is overthrown, any government that might follow would owe their power to the US and Saudia. Cozy option.

India and Brazil the world's largest post-colonial sister democracies and rising economic powers abstained against the UN Arab League call for military action. They voted ethically and diplomatically, in favor of Libya's people. How? Brazil and India as postcolonial democracies abstained because they support the principle of sovereignty of states against outside interference, especially the US blood -for-oil policy since the early 1950's, to fuel US superpower dominance.

The US pressured South Africa, which this year, along with India is a non-permanent member of the UN Security Council to vote yes.
India abstained and went against the US-Saudia call.

Nigeria, a now-you-see-it-now-you-don't postcolonial democracy, fragile at best because of MNC control over its oil reserves, is the second largest supplier of oil to the US (Shell owns Nigerian Oil). No surprise there with Nigeria's YES vote.

Russia has enough oil of its own to abstain and Russia in any event, maintains a strategic relationship with its neighbor Iran, another potentially big producer of oil, as well as being a nuclear nation-state.

Totalitarian China, not to be confused with democratic Brazil and democratic India, well, China abstained because all of Africa is an expanding market for China's trade and geopolitical influence. China's political objective is superpowerdom which China's self-appointed leaders plan to accomplish without the consent of the governed -- the Great Walled-in Chinese people.

The big losers are the peoples of West Asia and North Africa, with practically no lived experience of civil societies. Tradition and culture yes, civil society and a public sphere, no.

Oil wins, the despots win (I think I'll include the US in that group)for now, in Libya.

Does one have to be a supporter of Gaddafi to say NO to the non-fly zone and favor multinational humanitarian intervention instead?

It is a fact that Gaddafi is using airpower and ground mercenaries against armed 'rebels', whoever they might be. Who armed the 'rebels'?

The question stubbornly remains -- How does enacting a no-fly zone in Libya protect street protest and civil liberties? Gaddafi has forces on the ground, so why is the EU/Arab League/UN Security Council/US no-fly zone beneficial to (armed) street protesters?

Finally, here's my core analysis in a soundbyte:

Blood-for-Oil War vs. Humanitarian Intervention for Peace and Social Justice.

Chithra Karunakaran

Ethical Democracy As Lived Practice
NYTimes copyright
Obama Takes Hard Line With Libya After Shift by Clinton
Published: March 18, 2011
In a Field of Flowers, the Wreckage of War in Libya
Goran Tomasevic/Reuters

Rebel fighters watched burning vehicles belonging to loyalist forces after an air`strike near Benghazi on Sunday.
More Photos »
Published: March 20, 2011
BENGHAZI, Libya — The attack seemed to have come out of clear skies onto a field of wildflowers.
Detritus of War
Interactive Feature
Map of How the Rebellion Is Unfolding in Libya

Qaddafi Pledges ‘Long War’ as Allies Pursue Air Assault on Libya (March 21, 2011)
At Qaddafi Compound, a Human Shield (March 20, 2011)

Littered across the landscape, some 30 miles south of Benghazi, the detritus of the allied airstrikes on Saturday and Sunday morning offered a panorama of destruction: tanks, charred and battered, their turrets blasted clean off, one with a body still caught in its remnants; a small Toyota truck with its roof torn away; a tank transporter still on fire. But it did not end there.

For miles leading south, the roadsides were littered with burned trucks and burned civilian cars. In some places battle tanks had simply been abandoned, intact, as their crews fled. One thing, though, seemed evident: the units closest to Benghazi seemed to have been hit with their cannons and machine guns still pointing toward the rebel capital.

To the south, though, many had been hit as they headed away from the city in a headlong dash for escape on the long road leading to a distant Tripoli.

“They were retreating,” said Col. Abdullah al-Shafi, an officer in the rebel forces, which had clamored desperately for the allied air help that arrived on Saturday. “Soldiers had taken civilians’ cars and fled. They were ditching their fatigues.”

Among it all, across an area the size of four football fields dotted with trees and white and yellow flowers, hundreds of Libyans solemnly picked through the debris on Sunday, gazing at the results of a last battle in Col. Muammar el-Qaddafi’s assault on Benghazi, the de facto rebel capital.

At one point, the onlookers carefully extricated the body of a soldier from the remnants of a tank, turned to cinder like five more bodies, unrecognizable on the roadside.

From the debris it was not possible to piece together the full details of the final battle, and some questions hung over the carnage: had Libyan insurgents pinned down the loyalist fighters in some places, as some of them claimed in news reports, or was the damage exclusively the result of allied airstrikes?

At least part of the answer was evident overhead, where jets could be seen across the region — some circling nearby, some screaming through on their way to somewhere else. As allied commanders gauged that the Libyan government’s air defenses had been, at the least, severely damaged, it was clear that the air campaign was entering a new phase, where ground targets were being actively hunted by allied attack aircraft.

But some people here said there was still ground fighting, too, farther down the road toward the strategic crossroads town of Ajdabiyah. But those reports could not be immediately confirmed, any more than the precise details of what had happened on the roadside.

From the look of things on Sunday, it was not immediately clear whether the loyalist column, now turned to ashes, had still been advancing or was staging at this place on the highway. Soldiers appeared to have been trying to bulldoze sand into berms on one flank, with the highway on the other.

But given the distance from Benghazi, it was clear that Colonel Qaddafi’s forces had been moving into position, at least to encircle the city or possibly reinforce advance units already there.

“This is all France,” a rebel fighter, Tahir Sassi, told a Reuters correspondent as he surveyed the devastation on Sunday. “Today we came through and saw the road open.”

The monuments to the loyalists’ last maneuver were not the victory so often trumpeted in their propaganda. Empty ammunition boxes lay discarded among the flowers. Armored personnel carriers still smoldered alongside wrecked rocket-launchers. Craters pitted the fields, as if there had been multiple strikes, apparently by the pilots of the French warplanes that took credit for firing the first shots in the international, American-backed effort to contain Colonel Qaddafi’s forces.

In Benghazi itself, the scene of heavy fighting on Saturday as leaders met in Paris to set their imprimatur on the campaign to contain Colonel Qaddafi, the city on seemed quiet on Sunday. The fighting had sent a panicky exodus of fearful Libyans flowing to the east as thousands tried to escape. But on Sunday, hundreds of cars clogged the roads, bearing residents back past makeshift barricades made of refrigerators, a swing set, a set of garish columns — a surreal montage of war.

In the city, a tire repair shop had reopened and a butcher shop, but many remained shuttered. Long lines formed at the gas stations in this oil-rich land.

The military campaign in these parts had once seemed to see-saw as the rebels seeking the ouster of Colonel Qaddafi tried to push west to Tripoli, his stronghold, while loyalist troops sought to push them back east. The air strikes came with the pendulum swinging in the loyalists’ favor, stopping the advance — at least in one field of wildflowers — with the abruptness of firepower concentrated on targets that had not previously needed to fear attack from the skies.

Bloomberg Businessweek copyright
By Glen Carey and Joseph Carroll

Calm in Saudi Arabia Speaks Volumes
Generous benefits and a popular king help stabilize the oil-rich kingdom

By Glen Carey and Joseph Carroll

The contrast between Libya and Saudi Arabia on Feb. 23 couldn't have been more striking. As Qaddafi loyalists fought rebel forces east of Tripoli, oil majors such as Total (TOT) and ENI (E) cut or suspended their Libyan oil production, while the U.S., Britain, and Italy prepared to send ships and planes to evacuate their citizens. On the other side of the Arab world, Saudi King Abdullah returned from three months of medical treatment abroad laden with gifts for his subjects. Abdullah, known as the people's king, announced $36 billion worth of new jobless benefits, education and housing subsidies, and debt write-offs. The government even unveiled a new sports channel.

The world is focused on the tragic events unfolding in Libya, which have alarmed U.S. policy makers and spooked markets into bidding oil above $100 a barrel. Yet a nonevent—the unrest that is not occurring in Saudi Arabia—could prove just as important in determining the future of the region and the world economy.

If Saudi Arabia's people—including a sizable Shiite minority—keep supporting Abdullah's regime, then the country can bring its vast reserves of oil into play to make up for any production lost in Libya or other crisis-crippled states. If instead Shiite unrest spills over from neighboring Bahrain into the Saudi state and puts production at risk, the world will be in a very dangerous place.

Observers like Peter Zeihan, of geopolitical consultants Stratfor, are betting that Saudi Arabia will escape the turmoil. "Odds are the Saudis would hold on because they have much better social control in the form of policing powers, and they are better able to insulate the minority group that might like to see a change from events in the outside world," he says.

It would be unwise to say definitively that Saudi Arabia will emerge unscathed. Yet 86-year-old Abdullah has proven an able ruler. Under him and his influential Oil Minister, Ali Ibrahim al-Naimi, the kingdom has expanded its oil production capacity to about 12 million barrels a day; actual production is about 8.4 million barrels a day. The government has a 35,000-man force just to protect key oil and gas installations. "I don't really see any credible risk to their oil infrastructure," says Jarmo Kotilaine, chief economist at Jeddah-based National Commercial Bank.

The kingdom is also investing in its citizens, including minority Shiites in the oil-producing region of the Eastern Province, through generous social programs. Saudi Aramco, the giant state oil company, has made sure to employ a large number of Shiite workers to give them a stake in its success.

Ordinary Saudis have started to benefit from King Abdullah's educational programs. Yasser Abbass, a 28-year-old Shiite, got full tuition and board while studying for a master's in business administration at a California university. "The government's program took care of most of my expenses during my studies, including tuition, health coverage, and monthly allowance," says Abbass, who returned to the kingdom and got a job as an investment banker in Riyadh.

The kingdom's role as the world's main oil exporter is more critical than ever as Libya, Africa's third-largest oil producer, and Algeria, the continent's fourth, confront popular uprisings. Libya pumps 1.6 million barrels a day, according to data from the Organization of the Petroleum Exporting Countries, and exports mostly to Europe.

"Saudi Arabia has built up its spare production capacity so it can handle any supply interruption in the market," says Carsten Fritsch, a Frankfurt-based analyst at Commerzbank. "Saudi Arabia can handle it unless there is a combined impact of protests in North Africa and in another large Gulf Cooperation Council oil producer." So far, none of the major Persian Gulf oil producers have seen the kind of political instability that has affected production in Libya.

Saudi Arabia has about 3.5 million barrels of untapped daily production capacity for emergencies, the International Energy Agency says. That's more than double Libya's output. The Saudis would need at least 30 days to bring this capacity online, says Erik Kreil, the U.S. Energy Dept.'s specialist on oil market disruptions. Minister al-Naimi said on Feb. 22 that OPEC is ready to step in to meet a shortage caused by a disruption in shipments from Libya. "Saudi Arabia and OPEC will be ready to meet that shortage, if and when it happens," he said.

Despite al-Naimi's assurances, Brent oil futures, the benchmark price for two-thirds of the world's crude, have climbed 10 percent since Feb. 15—just before Libya began to unravel and passed $108 a barrel for the first time since 2008. Prices will continue to escalate while the Saudis tap their spare capacity and refiners, chemical makers, and speculative traders scramble for their piece of a shrinking global supply, Kreil says.

Oil traders are haunted by the specter of 2002-2003, when political unrest and an oil industry strike in Venezuela interrupted the flow of crude exports from one of the primary suppliers to the U.S. market. While the world waited for the Saudis to deliver on promises of extra crude, oil futures traded in New York surged 51 percent in the span of three months to the highest price since the outbreak of the first Gulf War more than 12 years earlier. A similar runup now in the Brent contract used to price Middle East crude would translate into prices in excess of $160 a barrel. If the Venezuelan experience is any guide, prices from such a spike would not stay high for long. After Saudi supplies began flowing in the spring of 2003, U.S. crude prices tumbled 37 percent in two months.

The difference between 2003 and now is that the current crisis is in the Mideast, where upheaval has proved contagious. Gianna Bern, a former BP (BP) crude trader now at Brookshire Research and Advisory, puts it this way: "The real concern is that if we see these sorts of disturbances spread to Saudi Arabia or Iran, then we're going to see turmoil in energy markets go to another level, an unprecedented level."

All the Arab states that emerged from the collapse of the Ottoman Empire after World War I are vulnerable, Stratfor's Zeihan says, because none have managed a normal transition of political power. Saudi Arabia has been under the thumb of the same family since its establishment. Even if Saudi Arabia avoids unrest this time, it has to continue Abdullah's reforms to prevent an upheaval. Says former U.S. Ambassador to Saudi Arabia Richard Murphy: The Saudis need to keep creating jobs and more importantly give their citizens "a sense of participation in government."

The bottom line: Saudi Arabia has thus far escaped tumult thanks to tighter market controls and better social programs than its neighbors.

With Peter S. Green and Steve Voss. Carey is a reporter for Bloomberg News. Carroll is a reporter for Bloomberg News.

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