We are in the middle of world events that may result in the eventual break-up of the 'Organization of the Petroleum Exporting Countries' (OPEC), which is an intergovernmental organization of twelve developing countries, made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC is considered a cartel and all of their members are controlled by either Muslim or military dictator style governments.
The start of the break up may have been on September 10, 2008, when the Saudis walked out of OPEC negotiating session in Vienna where the organization voted to reduce production. Although Saudi Arabian OPEC delegates officially endorsed the new quotas, they stated anonymously that they would not observe them. One of their delegates was quoted as saying “Saudi Arabia will meet the market’s demand. We will see what the market requires and we will not leave a customer without oil. The policy has not changed.”The U.S. imports crude oil from other countries. OPEC is not even in the top five of countries from which we directly receive shipment of that precious commodity. Here is how they rank per the latest report from the EIA:December 2010 Import Highlights: Released February 25, 2011Monthly data on the origins of crude oil imports in December 2010 has been released and it shows that four countries exported more than 1 million barrels per day to the United States. The top five exporting countries accounted for 72 percent of United States crude oil imports in December while the top ten sources accounted for approximately 88 percent of all U.S. crude oil imports. The top five sources of US crude oil imports for December were Canada (2,1 million barrels per day), Mexico (1,2 million barrels per day), Saudi Arabia (1.1 million barrels per day), Nigeria (1 million barrels per day, and Venezuela (825,000 barrels per day). The rest of the top ten sources, in order, were Iraq (336,000 barrels per day), Angola (307,000 barrels per day), Brazil (271,000 barrels per day), Algeria (262,000 barrels per day), and Colombia (220,000 barrels per day). Total crude oil imports averaged 8,631,000 barrels per day in December, which is an increase of 23,000 barrels per day from November 2010.Canada remained the largest exporter of total petroleum in December, exporting 2.7 million barrels per day to the United States, which is an increase from last month (2.5 million thousand barrels per day). The second largest exporter of total petroleum was Mexico with 1.4 million barrels per day.
Breaking up with OPEC may be pulled that off without the Western nations having to fire one shot. That old Neil Sedaka song "Breaking up is hard to do" comes to mind when you realize our love-hate relationship may finally lead to a divorce that will relieve the U.S. from our dependency on imports from countries that really don't like us except for our greenbacks. That leads to the reason for this article on why OPEC's existence may be in its final throes and is coming to an end. “Ummah” means unity among Muslims - One nation and one people. Many people have tried to bring Ummah to the Muslim nations. Mohammed was no sooner dead when the Sunni and Shi’a began to fight each other. Then along came the third sect, “Khariji”.
They said Allah would reveal who was to be the successor of Mohammed on the battlefield. They began to slaughter each other. This hatred and killing went on until the 20th Century with 1.5 million Muslims killed by other Muslims in wars between Sunni and Shi’a Muslims reliving the Battle of Karbala in the 8th Century. Why is it that the only way it appears to a Westerner that Muslims can be united is if they have a common enemy? Because it seems unless they have a common enemy they will kill each other. The invasion of Kuwait by Saddam Hussein – raping, burning, and pillaging the inhabitants in the name of reclaiming land that he claimed was rightfully theirs - brought the United States and England into the region to liberate Kuwait. This cycle continues even today with vast crude oil reserves being the main incentive for continued Western involvement. T.E. Lawrence said “Muslims will continue to kill other Muslims”. He was more famously known as “Lawrence of Arabia” and led England’s involvement in helping the Muslims fight the Turks in the early 20th Century. The English were eventually rewarded by completely losing control of the region, which had been strategic to their colonial interest. Since then Muslims have killed each other far more than the Americans, the British, the West, or the Israelis ever killed. The West or the Israelis have never done to Muslims what they have done to each other with half a million killed in the six-year war between Iran and Iraq alone in the 1980’s. The Bahrain and Yemen conflicts are continuing with Egypt, Morocco and now Libya prominently in the news. Disruptions have spread across the Middle East and North Africa. Libya’s 1.6 million barrel crude oil exports are almost entirely halted and renewed unrest in Oman, Iran and Iraq have rattled crude oil traders. An interruption of shipments from any of those countries would further tighten oil supplies, even as Saudi Arabia has rushed to fill the vacuum of Libyan supplies by pumping more oil from its fields. Oman, which is a normally stable Persian Gulf country, ruled by a family dynasty and the largest non-OPEC oil producer in the Middle East, is now in trouble as well. Refiners around the world have been hoping that Iraq, as violence ebbed, would again become a major oil producer, with production stabilizing at 2.3 million barrels a day. But rebels bombed the country’s largest refinery, reducing the refinery’s capacity to refine petroleum products by 75,000 barrels a day. This was on top of a terrorist attack on a pipeline leading to a second refinery north of Baghdad. Saudi Arabia has a total production capacity of 12.5 million barrels a day, and currently produces nine million barrels after increasing its output by several hundred thousand since the beginning of 2011. Saudi Arabia said they are ready to pump what it takes to fill any supply gap, but much of its 3.5 million barrel excess capacity contains sour crudes, which does not easily replace the Libyan sweet crude European refineries in particular desire to produce diesel Donald Trump recently announced his intentions to explore running for President and responded to speculation that the turmoil in Egypt and other countries in the Middle East could push oil prices to as high as $200 a barrel.He said: “It also could go the other way. Frankly, the Middle East is a tinderbox. It’s going to explode. OPEC will probably be destroyed if it explodes, and oil prices could go the other way.“I understand economics. You break up what would normally be an illegal monopoly, OPEC, and break it up very strongly. The Middle East is exploding, and I’m saying that could have a positive impact on oil prices.“If you look at oil right now, it’s soon going to be $100 a barrel. Far too high. It’s set by OPEC. I think OPEC would explode with the Middle East and that wouldn’t be the worst thing in the world.”“I think it’s unfair. I think it’s illegal,” he declared. “If you have a store and I have a store and we collude and set prices, we go to jail”.“Here you have 12 men, in this case all men, they sit around a table and they set the price of oil.”“Abu Dhabi, which has plenty of oil, just went to all natural gas for transportation because they want to sell us the oil at exorbitant prices. When you tell me about Obama and what he’s doing in the Middle East, I don’t think he’s doing anything in the Middle East.” Donald Trump may just be correct that the current revolts and conflicts in the Middle East and North Africa will cause an upheaval in the world oil markets enough to bring about the end of OPEC.
We will have to change from humming that Neil Sedaka song to learning the lyrics to “O Canada” and “Himno Nacional Mexicano”.
The start of the break up may have been on September 10, 2008, when the Saudis walked out of OPEC negotiating session in Vienna where the organization voted to reduce production. Although Saudi Arabian OPEC delegates officially endorsed the new quotas, they stated anonymously that they would not observe them. One of their delegates was quoted as saying “Saudi Arabia will meet the market’s demand. We will see what the market requires and we will not leave a customer without oil. The policy has not changed.”The U.S. imports crude oil from other countries. OPEC is not even in the top five of countries from which we directly receive shipment of that precious commodity. Here is how they rank per the latest report from the EIA:December 2010 Import Highlights: Released February 25, 2011Monthly data on the origins of crude oil imports in December 2010 has been released and it shows that four countries exported more than 1 million barrels per day to the United States. The top five exporting countries accounted for 72 percent of United States crude oil imports in December while the top ten sources accounted for approximately 88 percent of all U.S. crude oil imports. The top five sources of US crude oil imports for December were Canada (2,1 million barrels per day), Mexico (1,2 million barrels per day), Saudi Arabia (1.1 million barrels per day), Nigeria (1 million barrels per day, and Venezuela (825,000 barrels per day). The rest of the top ten sources, in order, were Iraq (336,000 barrels per day), Angola (307,000 barrels per day), Brazil (271,000 barrels per day), Algeria (262,000 barrels per day), and Colombia (220,000 barrels per day). Total crude oil imports averaged 8,631,000 barrels per day in December, which is an increase of 23,000 barrels per day from November 2010.Canada remained the largest exporter of total petroleum in December, exporting 2.7 million barrels per day to the United States, which is an increase from last month (2.5 million thousand barrels per day). The second largest exporter of total petroleum was Mexico with 1.4 million barrels per day.
Breaking up with OPEC may be pulled that off without the Western nations having to fire one shot. That old Neil Sedaka song "Breaking up is hard to do" comes to mind when you realize our love-hate relationship may finally lead to a divorce that will relieve the U.S. from our dependency on imports from countries that really don't like us except for our greenbacks. That leads to the reason for this article on why OPEC's existence may be in its final throes and is coming to an end. “Ummah” means unity among Muslims - One nation and one people. Many people have tried to bring Ummah to the Muslim nations. Mohammed was no sooner dead when the Sunni and Shi’a began to fight each other. Then along came the third sect, “Khariji”.
They said Allah would reveal who was to be the successor of Mohammed on the battlefield. They began to slaughter each other. This hatred and killing went on until the 20th Century with 1.5 million Muslims killed by other Muslims in wars between Sunni and Shi’a Muslims reliving the Battle of Karbala in the 8th Century. Why is it that the only way it appears to a Westerner that Muslims can be united is if they have a common enemy? Because it seems unless they have a common enemy they will kill each other. The invasion of Kuwait by Saddam Hussein – raping, burning, and pillaging the inhabitants in the name of reclaiming land that he claimed was rightfully theirs - brought the United States and England into the region to liberate Kuwait. This cycle continues even today with vast crude oil reserves being the main incentive for continued Western involvement. T.E. Lawrence said “Muslims will continue to kill other Muslims”. He was more famously known as “Lawrence of Arabia” and led England’s involvement in helping the Muslims fight the Turks in the early 20th Century. The English were eventually rewarded by completely losing control of the region, which had been strategic to their colonial interest. Since then Muslims have killed each other far more than the Americans, the British, the West, or the Israelis ever killed. The West or the Israelis have never done to Muslims what they have done to each other with half a million killed in the six-year war between Iran and Iraq alone in the 1980’s. The Bahrain and Yemen conflicts are continuing with Egypt, Morocco and now Libya prominently in the news. Disruptions have spread across the Middle East and North Africa. Libya’s 1.6 million barrel crude oil exports are almost entirely halted and renewed unrest in Oman, Iran and Iraq have rattled crude oil traders. An interruption of shipments from any of those countries would further tighten oil supplies, even as Saudi Arabia has rushed to fill the vacuum of Libyan supplies by pumping more oil from its fields. Oman, which is a normally stable Persian Gulf country, ruled by a family dynasty and the largest non-OPEC oil producer in the Middle East, is now in trouble as well. Refiners around the world have been hoping that Iraq, as violence ebbed, would again become a major oil producer, with production stabilizing at 2.3 million barrels a day. But rebels bombed the country’s largest refinery, reducing the refinery’s capacity to refine petroleum products by 75,000 barrels a day. This was on top of a terrorist attack on a pipeline leading to a second refinery north of Baghdad. Saudi Arabia has a total production capacity of 12.5 million barrels a day, and currently produces nine million barrels after increasing its output by several hundred thousand since the beginning of 2011. Saudi Arabia said they are ready to pump what it takes to fill any supply gap, but much of its 3.5 million barrel excess capacity contains sour crudes, which does not easily replace the Libyan sweet crude European refineries in particular desire to produce diesel Donald Trump recently announced his intentions to explore running for President and responded to speculation that the turmoil in Egypt and other countries in the Middle East could push oil prices to as high as $200 a barrel.He said: “It also could go the other way. Frankly, the Middle East is a tinderbox. It’s going to explode. OPEC will probably be destroyed if it explodes, and oil prices could go the other way.“I understand economics. You break up what would normally be an illegal monopoly, OPEC, and break it up very strongly. The Middle East is exploding, and I’m saying that could have a positive impact on oil prices.“If you look at oil right now, it’s soon going to be $100 a barrel. Far too high. It’s set by OPEC. I think OPEC would explode with the Middle East and that wouldn’t be the worst thing in the world.”“I think it’s unfair. I think it’s illegal,” he declared. “If you have a store and I have a store and we collude and set prices, we go to jail”.“Here you have 12 men, in this case all men, they sit around a table and they set the price of oil.”“Abu Dhabi, which has plenty of oil, just went to all natural gas for transportation because they want to sell us the oil at exorbitant prices. When you tell me about Obama and what he’s doing in the Middle East, I don’t think he’s doing anything in the Middle East.” Donald Trump may just be correct that the current revolts and conflicts in the Middle East and North Africa will cause an upheaval in the world oil markets enough to bring about the end of OPEC.
We will have to change from humming that Neil Sedaka song to learning the lyrics to “O Canada” and “Himno Nacional Mexicano”.
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