Passing The Oily Buck

By Hani Kobrossi

21/06/2010

After what started as a rather boring competition, the World Cup’s football extravaganza has finally turned into a display of the quality normally demanded of such a talented (and well-paid) collection of players (England excluded, naturally). The steady build-up to the faster-paced tempo and more fulfilling match-watching has been similar to recent market activity around the globe. We had a disastrous opening gambit to June, but just as the investor-base realised Europe was not going to disappear in an eruption of fiscal mismanagement even more spectacular than the fireworks display that felled Pompeii a few thousand years ago (AD 79 - fact), valuations have once again looked attractive to those fortunate enough to have sold earlier in the year (April would have been a good time for that) and are now able to re-enter the market with vigour ahead of the understandable desire to switch those annoying screens off (any excuse) and head out to the summer beaches. One positive aspect of all Europe’s woes – the yachts and villas available for rent in some of the more desirable Mediterranean locations are thankfully affordable – is there a whiff of conspiratorial short-selling pressure on Spanish sovereign debt just as Marbella’s normally exorbitant five-star resorts gear up for the July-onslaught? You smart hedge-funders you – your secret is safe with me.

Axing the Evil

What is it with the Iranian leadership and their ability to irritate the entire world? They are not even playing in the World Cup and are still the most talked about member of the axis of evil – even those plucky-in-defence North Koreans elicited a wry smile a few days ago, from both ardent opponents of the “axis” and members of the “anti-US-hegemony” fanbase. There is very little to laugh about as regards the latest round of economic sanctions imposed upon Iran though, bringing further undue hardships on her people in addition to a recent re-flaring of the aggressive rhetoric from both sides. We all know Obama wants a diplomatic solution, but I think we also all know that Obama will end up using the mightiest military force ever known to man – whether directly or indirectly (more on that below) – to ensure an end to the threatening situation that the American people, and its regional allies, will be content with.

Iran even has a role to play in the current debate enraging the oil-rich gulf – no, not Persian Gulf but the US Gulf-Coast – quickly turning from the picturesque to “take-a-picture-of-me-swimming-in-this-viscous-black-gold” collection of beaches, as thousands and thousands of barrels of oil continue to spew from the depths of its waters. Despite the best efforts of the firm seemingly blamed for the entire disaster, The Petroleum Company For The Colonies Of The Former British Empire – no wait, sorry, that’s not the correct name, that must have been overheard when Fox News was accidentally switched on in the background, we do of course mean the Anglo-Persian Oil Exploration Firm That Made Millions For The British Emp... – no sorry, wrong one again, we are talking of the re-branded BP here aren’t we? Yes, just plain and simple BP, that’s the British company we wanted. Darn, mistaken once more, there is no British in BP. So it’s just BP. Anyway, whatever it’s called, watching the BP Chairman being grilled by congress is another expression of what has seemingly become a US national-pastime: venting emotional anger on prime-time TV and almost brining to tears the very captains-of-industry purposefully created by the most capitalist of capitalist systems in the world.

Crossing the line

Hmm, all this fuss about whether or not Obama has paid enough attention to the issue - undoubtedly an eco-disaster - and is doing enough to “punish” the evil BP, has detracted from a glaringly obvious and frustratingly misdirected wonder of media creativity – that the original miscreant of the accident that led to the spill was indeed the US owned, managed and staffed Trans-Ocean. Wait, it gets better. Who was BP working for and under contract to when operating what had only months before been heralded as a wonderful new deep-drilling technology? Yep, you guessed it, another immensely US-centric firm and in fact the original soccer-watching-Superbowl-loving-gas-guzzling-provider, Halliburton itself! The whole thing smacks of foul-oil-tasting-irony.

If the US was not so hell-bent on drilling its very lands in the most dangerous circumstances yet tried, driven by an ever-more-greedy and desperate desire to devour every drip of oil possible to ensure a continuation of their gluttonous way of life, this entire saga would not have transpired in the first place. Sorry, but you cannot push people to the very limits of human technology for your own pronounced desires only to blame and loudly berate them when something goes wrong – especially when the risks were clearly understood and sanctioned by the highest authorities in the land at the time. If Obama’s White House is really trying to hurt his preceding administration’s corporate affiliate, he should lay-off the BP bashing (significantly now also owned by US investors) and turn some of his ire closer to home.

Reading between the lines

What also caught my eye this week was the little distributed story of Saudi Arabia apparently acquiescing to Israel’s request to fly through a narrow corridor to allow an attack on Iran’s (suspected) nuclear reactors. This is typical of the Middle East. Rather than focus on pressuring Iran themselves through a number theoretical regional capabilities and pressure points (access to banking facilities, assistance with oil refining etc.), the flammable Pandora’s box has been dusted-off and placed in front of the eager-to-open hands of the Israelis.  

Allow us to investigate: the Middle East, controlling almost 3/5 of the world’s known oil supplies, is unable to deal with one of its own trouble-making neighbours. What does it do instead? Does it request assistance from one of the more neutrally inclined powers to facilitate the removal of such threat? If you thought “yes” even for a moment then, my Arabian-watching friends, you clearly have not read enough about Middle Eastern history and the seemingly self-destructive desire to consistently make the wrong strategic decision at the absolute crucial moment. The single most problematic choice is opted for: an implicit agreement to turn-a-blind-eye (presumably busy cheering Germany in the World Cup) as the US-supplied Israeli air force (used to be US-trained, now they train the US – who trains the Saudis?) streak through a narrow flight path provided at the top of the Saudi Kingdom’s airspace to provide a direct enough bomb-run for a debilitating blow to Tehran’s nuclear programme. That’s the plan at least.

The reality is no doubt far more complicated and the conclusion and ripple effects a further several-hundred times over. US-trained Israeli warplanes screeching across the Gulf skies, on their sight-seeing trip to Iran that should end with a bang will naturally irritate the famed Arab-street. Surely the leadership across the region anticipates this. Maybe that’s why the “rumours” that made up the story were not more widely distributed and made a swift exit from the journalistic editorial commentary.

So as we begin a new week, there are a few things to contemplate and discuss amongst yourselves. Surely important questions will be raised across many a dinner-table. Or then again, maybe most will simply hold aloft a few beers as they cheer their favourite football team and ask deeply insightful questions that strike hard at the very heart of those vital life-changing issues – “is the ref blind or what?!”