Middle East War cover for PO.

stu · Posted: Tue Feb 15, 2005 2:06 pm Post subject: Middle East War cover for PO.

How's this for a scenario?

The Middle East reacts badly to George Bush and his attempts to bring freedom to the region.

The area descends into chaos and the price of oil shoots through the roof.

i'm not sure how long a ME war would last but surely it would provide Dubya with a cover to deny that PO is happening because we will all be under the impression that the reason for the sky high oil prices and resulting economic depression will be the fact that they are not letting us have our oil.

Tyler_JC · Posted: Tue Feb 15, 2005 2:26 pm Post subject:

Imagine a united Iran-Iraq fighting Saudi Arabia and other ME powers over control of the oil reserves, half of the world's oil in such small a region makes for one hot zone. One revolution in any of these countries could push the whole region off the cliff.

Saudi Arabia is one global recession away from a complete revolution. Here's how it plays out. High oil prices push the American Consumer to the brink. He loses his home and his credit cards. This spikes interest rates in order to prop up the dollar (a total dollar collapse would destroy the global economy). This creates a global recession. China stops growing and it is pushed into a recession. All of this would drive down demand for oil. In terms of PO, it's a Godsend. Oil consumption drops to 60-70 million barrels a day. These creates a glut on the oil market. Prices drop like crazy. The world will produce less oil even though it could produce more (an artificial drop in oil production caused by economic rather than geological reasons)

What happens to oil producers? They run out of cash like they did in the 80's. Oil demand drops substantially (like in the late 70's/ early 80's) and we avoid a true depletion for a few years. HOWEVER, the Saudis find themselves with too little money to take care of their people. A revolution happens or worse, oil producers fight each other in order to try to keep their people "busy."

The world never gets out of that recession. The extra oil that should have been extracted stays in the ground because the wars are too intense. There is no chance for a recovery because the oil just isn't there. We end up with a Post Peak Scenario even without using up most of the world's oil. Crying or Very sad

And if things weren't bad enough, it looks like coal production is about to be cut for safety concerns.

China {Coal} Mine Blast Kills More Than 200 http://aolsvc.news.aol.com/news/article.adp?id=20050214182709990002&_ccc=4&cid=842

julianj · Posted: Tue Feb 15, 2005 2:33 pm Post subject:

Good post Tyler - just the sort of thing that I fear could happen if we all start fighting over it.

Tyler_JC · Posted: Tue Feb 15, 2005 3:11 pm Post subject:

Colorado-Valley · Intermediate Crude Joined: Aug 16, 2004 Posts: 733

Have you guys ever heard of the "neutron bomb?"

If the Middle East erupted in chaos that threatened the oil flow, I imagine the U.S. would seriously consider using them.

Our way of life is "non-negotiable," according to Dick Cheney.

Grimnir · Posted: Wed Feb 16, 2005 3:02 am Post subject:

Doly · Expert Joined: Dec 03, 2004 Posts: 4041

Bush may be able to hide that peak oil is happening, but he won't be able to hide that recession is happening. Which is exactly the reason we are all worried about peak oil.
Of course, the American people could take some bad decisions if they think that the problem will be over eventually, instead of realising that it's here to stay.

gg3 · Posted: Wed Feb 16, 2005 4:12 am Post subject:

I see no reason why Iraq, Iran, or a combination thereof would start something against SA.

It doesn't even take a complex chain of world-financial events to bring down the House of Saud.

SA is already in population overshoot, which worsens by the day. A numerical majority of Saudi population is below the age of adulthood. This in turn has synergistic effects in terms of breeding domestic terrorist movements. A properly-timed hit on a properly-chosen oil infrastructure target, would be enough to trigger the income loss whose effects would bring a lot of latent resentments to the surface and thence bring down the regime. Boom.

stu · Posted: Wed Feb 16, 2005 6:00 am Post subject: