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Bush's Oil Gamble Slips Up
ONE REASON for the US-led invasion and occupation of Iraq was to reduce the West's dependency on Saudi Arabian oil. With the world's second largest oil reserves on tap, imperialism viewed Iraq as a more secure fuel energy source then that provided by the neighbouring House of Saud.
However, a growing insurgency against the occupation in Iraq has seen oil production fail to recover to its pre-war levels. Combined with a huge increase in demand for fuel oil from China and India, and low oil stocks in the US, the price of crude oil has exceeded $40 a barrel in recent weeks.
In real terms this is still far below the oil price hike of 1973 which followed the Arab-Israeli war, and which pushed the world economy into a recession. Nonetheless, the increasing attacks in the Saudi Kingdom linked to Osama bin Laden's al-Qa'ida's network - aimed at disrupting the oil industry - is contributing to a 'terrorist premium' on oil prices, despite the Saudi regime pledging to increase output.
The oil-rich state of Saudi Arabia is run by a corrupt semi-feudal monarchy that bans political parties and trade unions and allows no free media. The regime has expounded an extreme right-wing Islamic ideology while maintaining close political links to the US and the Bush family in particular.
However, the country's vast financial reserves have been eaten up, firstly through bankrolling the US-led coalition against Iraq in the 1991 Gulf war, and secondly with the collapse in oil prices over the last decade.
Consequently, Saudi Arabia has a large number of unemployed, university-educated young people but who are also schooled in right-wing political Islam.
In the absence of any workers' organisations or socialist parties, this has made the country a fertile ground for reactionary Islamist groups and their anti-Western propaganda. The aim of Saudi-born Osama bin Laden is the removal of US troops and Westerners from the country and the establishment of a Taliban-type regime.
In The Socialist 5 June 2004:
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