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If the world could vote: Obama or McCain 28, October 2008

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Here is a link to a fantastic interactive map over at Foreign Policy which shows how the rest of the world would vote in the US elections if they could. It’s got to be said that it doesn’t look so good for McCain…

The oil roller coaster continues 28, October 2008

Posted by thegulfblog.com in Oil.
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It is a joy to see (from a Western perspective) the price of oil falling through the floor. The FT reported recently that US consumers had been spending up to 4% of their income on fuel – around $440 billion. However, now that oil prices have fallen to roughly half of what they were but a few months ago, you don’t need to be a financial wizard to see that savings in the region of $200 billion are in the offing.

On the other side of this there are the oil producers. Smug as well as inordinately and unexpectedly rich for so long off the back of soaring prices, it is hard not to feel sizable waves of schadenfreude crashing down on their disconsolate leaders. The picture is, however, by no means universal. The surprisingly prudent Saudis apparently predicated their budgetary plans on the price of oil at around $50 per barrel. This, coupled with incredible levels of liquidity, means that the Saudis will not suffer greatly from this decrease, barring any unexpected crashes. The less conservative Venezuela and Iran, however, bet that oil would remain somewhere around $95. This, therefore, leaves an impressive hole in the midst of their financial plans. Russia too, according to the same FT article, could be in for a rough ride, after expecting prices of $70 per barrel.

 

The evils of ‘big oil’ 23, October 2008

Posted by thegulfblog.com in Oil.
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The Tyranny of Oil” is a new book ranting and raving about the evils of oil companies. I have only read the introduction which was – rather unsurprisingly – averagely written and generally far too excitedly angry. I agree that oil companies are not exactly warm, kind-hearted companies but I think that hatchet-job books like this, with their desperately simple and emotive language and eye-catching covers of fire and brimstone, are just not helpful. They may well be wholly right (which i sincerely doubt) but the very manner of their writing to me just screams “one sided”, and there are always two sides to every story, however apparently cut and dried. Nevertheless there are a few interesting or at least surprising facts. Obviously, these snippets are all to do with the incarnation of evil that are the oil companies, but – assuming that they are correct – they do paint a stark picture of the industry.

– There have been 2600 mergers in the oil industry since 1991. This, therefore, brings words such a monopoly, oligopoly and cartel to mind.

– “Were the five largest oil companies operating in the United States one country instead of five corporations, their combined crude oil holdings would today rank within the top 10 of the world’s largest oil-rich nations.” Its always interesting – though beyond pointless – to note figures like these.

– “Six of the ten largest corporations in the world are oil companies. They are, in order, ExxonMobil, Royal Dutch Shell (Shell), BP, Chevron, ConocoPhillips, and Total. (The others are Wal-Mart, General Motors, Toyota Motor, and Daimler-Chrysler.)”

– “From 1998 to 2006, ExxonMobil alone spent more than $80 million lobbying the federal government, over 14 times more money than it spent on political campaigns.” One can imagine whole chapters raging against the companies premised on figures like these.

And the best statistic of all:

– The 10 largest oil companies in the world made over $167 billion of pure, clear, brilliant profit in 2006. That’s a lot of cash.

Interview with Ahmed Rashid 20, October 2008

Posted by thegulfblog.com in Central Asia, Random.
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From ‘Conversations with History‘ here is an interview with the vastly knowledgeable Ahmed Rashid, the Pakistani journalist and commentator. His knowledge of the region is profound and makes the interview well worth watching.

Are the Saudis at it again? 19, October 2008

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It is entirely possible to look at the history of the Kingdom of Saudi Arabia as a long struggle with religious forces. The very existence of the country is premised on a Faustian bargain of sorts between Muhammad Ibn Abd Al Wahhab and Muhammad Ibn Saud where each one was (and their descendants still are) utterly reliant on the other. The Al Saud’s provide the base for the Wahhabis to practice and proselyte their religious doctrine and the Wahhabis in turn provide the Al Sauds with the necessary religious sanctification as well as a proven ability to whip the masses into a religious fervor when needed.

As the powers of the Al Sauds and Wahhabis waxed and waned relative to each other, so did their relative influence over each other. For example, the Wahhabis found themselves in a strong position just before Operation Desert Shield when the Saudi government desperately needed the religious blessing of the Wahhabi clergy to sanctify their decision to allow large numbers of US troops onto Saudi soil. The Wahhabis duly provided a declaration supporting the government but demanded a high price for their official approval: yet stricter controls over many aspects of Saudi society. Kepel, the noted French Arabist characterises this deal as completing the Kingdom’s fall into “bottomless Islamization.”

Perhaps the clearest example of the Al Saud’s dependency on Wahhabi legitimacy occurred in 1979 when the Grand Mosque at Mecca was overrun by fundamentalists seeking to usher in the next eschaton.  This was a stark and brazen attack at the very core of Al Saud’s legitimacy: that of their safe custodianship of the holiest place in Islam. After the debacle was finally ended (with the help of French Special Forces) the Al Sauds pumped massive amounts of money into the Wahhabi clergy to proselyte the faithful yet further and prove their religious credentials, rather than engage in any attempt to understand, ask questions or resolve why this group took the fantastic step of attacking the Grand Mosque in Mecca.

However, the Saudis were fortunate. At the time of the Mosque debacle, the Soviets were invading Afghanistan. This, therefore, gave the Saudis another way to repair their image, bolster their legitimacy and get rid of the most dedicated and hard-line fundamentalists who could have threatened their regime: along with America they supplied men, arms, equipment and money to the Afghan resistance.

Eventually, of course, the Mujahedeen returned home and the Saudis were in an even worse situation. Not only were the proselytized, fervent and passionate men returning home, but they were now combat veterans with a range of guerrilla warfare skills. To make things worse, not long after their return, Iraq invaded Kuwait and implicitly threatened Saudi’s biggest oil fields in the east of the country, next to Kuwait. The Al Sauds, however, did not turn to their veteran Mujahedeen, but to the Americans and their grand coalition. This was an epic slap in the face for Bin Laden and the rest of the Mujahedeen. It is these remnants of the Afghan War that were overwhelmingly responsible  for  the wave of terrorism that spread across the world in the nineties and early twenty-first century, from Dhahran to Bali and from to Madrid to New York.

Peculiarly enough, in the aftermath of the September the 11th attacks it was the Al Sauds who were in the ascendancy relative to the Wahhabis. They were under enormous pressure to act in some tangible way, shape or form to reign-in the extreme anti-American Wahhabi tendencies within their society. Numerous reforms were enacted none of which were that far reaching, but the Wahhabi position was nevertheless weakened to some degree. It took the Saudis two years to begin to make any meaningful changes and only then because of the devastating attacks in the Kingdom itself, which finally drove home the point to the Al Sauds. Yet this chastening experience – that of sponsoring religious fanatics only to receive severe blow-back some time later – does not appear to have altered Saudi strategic thinking, for there is growing evidence that they are doing precisely the same thing again, only in Lebanon and not Afghanistan.

Saudi Arabia along with Jordan and other Sunni countries have been concerned for some time about a so-called Shia crescent descending on the Middle East. Stretching from Iran, through Iraq and Syria to Lebanon, Saudi for one has been taking steps to seek to mitigate the strengthening of Shia power where possible. According to Seymour Hersh, Saudi has joined up with their erstwhile Afghan partner, the US,  in sponsoring Fatah Al Islam to act as a Sunni counterweight to Shia Syrian forces in Lebanon. Saudi is believed to have provided not only funds but around 15-20% of the fighters, for example, at the Nahr Al Bared refugee camp conflict in 2007. One further factor no doubt adding to Saudi’s anxiety in Lebanon was the rout of Hariri’s offices in West Beirut by Shia Hezbollah on the 7th May this year.

One corollary of all this is perceptibly worsening relations between Saudi Arabia and Syria. Following on from the banning of Saudi daily newspaper Al Sharq Al Awsat back in summer 2006 over their coverage of the war in Lebanon, another pan-Arab Saudi paper has been banned. On the 29th September this year, Al Hayat was banned because of its coverage of the bombings in Damascus.  Yet it is these attacks which are, potentially, the true harbinger of worse things to come. The most recent of these attacks killed 17 Syrians and injured around 14 near a significant Shia shrine in Damascus. This act of terrorism was condemned around the world but significantly not in Riyadh where the government refused to comment. So was this an example of a Saudi trained and funded Jihadi from a Sunni camp in Lebanon coming across the border and seeking to attack Syria? That is certainly what Bashar Al Assad’s regime is telling the world; hence their deployment of Special Forces and troops along parts of the Lebanese border to ostensibly stop foreign Jihadis entering the country. There are, therefore, persuasive arguments suggesting that the Saudis have reverted to their failed policies of the past and whilst it may sound ridiculous to repeat old mistakes, if it is true, they are not the first and certainly will not be the last to do so.

Palin as President 17, October 2008

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Here is an excellent link to Sarah Palin’s Oval Office. Harsh but fair, as they say. Just keep clicking…there’s plenty more.

Bad news, I’m afraid 17, October 2008

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I apologise. There is no easy way of saying this. We’ve just all got to stick together at a time like this. Rely on each other for company, support and an emotional shoulder to lean on. So here goes…Noor has aired its last episode. How we’ll cope, I just don’t know right now. But struggle on we must…

So anyway…for those of you that don’t know, Noor is a Turkish soap opera. However, this is not some run-of-the-mill soap, but one that has captured the heart of the Arab world, from Saudi Arabia to Egypt to Oman, people have been utterly hooked. It is difficult, however, to see what they are hooked on. Noor is a lamentably terrible programme. Risibly pathetic plots meet some form of “acting” unbeknownst to me in a set knocked-up in a shed ten minutes before airing. Honestly, it makes the old Crossroads look like some kind of uber-slick Spielberg epic. And that’s not even mentioning the dubbing. Obviously, the original is in Turkish and gets dubbed into Arabic for the Middle East. Well…where to begin? One wonders if they use a script at all. That may sound like a ridiculous thing to say, but as they manifestly have no conception of timing, intonation that doesn’t clearly stem from some kind of a 1950’s Hong Kong martial arts dubbing-homage, and a plain disregard for who is actually speaking; anything is possible.

Noor has hit the headlines consistently in recent months because of its wickedly salacious plots. There are men…and women. Honestly, what next? The religious standard bearers of morality, truth and dodgy money to dodgy charities have slammed Noor, and many a jihad, fawta and no doubt the odd hex has been foisted upon the unrepentant Turkish import.

Violence on TV is, obviously, never an issue. From bloody car-chases to gory films to grainy videos of people’s heads being lopped off in Iraq, there is, it seems, something of a deafening silence from these religious folk when it comes to these latter examples. However, see a woman’s shoulder and well, that’s just plain haram. Imagine the social destruciton and free flow of depraved and wanton lust were the average Jordanian to see Queen Rania’s shoulder? Thank god for the censors.

Do these dogmatic censors not ever feel that they are the proverbial King Canute sitting on a beach? I mean really? Apparently over half the Arab population watched the end of Noor. Half. A in 50%. 1/2. That’s a lot of people. Around 85 million Arabs. Surely there has never ever been, in the history of television – in the history of human existence – such a turn out by one ethnic group for a programme episode? I’m sure that the ending of Dallas was popular, maybe even to the tune of 85 million people, but it certainly was no where near half of the American population, never mind half the ‘ethnic’ white Anglo-Saxon American group, or however else you define it.

Alas, logic is often something of a stranger in these parts of the world and so using a logically constructed argument is just plain unfair. But at least half that Arab world had a taste of good, old fashioned trash TV. Being as many in the Middle East appear to be emerging from the depths of Western 80’s style TV (hamdulillah…), I fully expect them to graduate to an appreciation of the Krytpon Factor, Mr Motivator and that other great of late 1980’s, early 1990’s TV, Blind Date with our Cilla. Though on reflection, maybe the Muftis saw the future and had the right idea all along.

Turkmen find massive new gas reserves 16, October 2008

Posted by thegulfblog.com in Central Asia.
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There is an excellent article over at Asia Times Online (ignore the irrelevant and flowery opening paragraphs) on the discovery of a massive new gas field in Turkmenistan. This Central Asian oddball country already had significant gas reserves but this new find could well see them leap up to second in the world in terms of gas supplies, eclipsing Iran and Qatar, currently second and third respectively.

Until recently, in the wider world, Turkmenistan has been known as ‘that country with the mad leader’. Their erstwhile leader, Niyazov was famous for numerous utterly ridiculous initiatives all aimed at creating and augmenting his cult of the personality. He designed the education curriculum around a few ridiculous texts that he had written, build a gold plated statue that revolved to the sun, changed names of the months of the year and various other absurd and costly ventures. Yet Turkmenistan could afford this: it was well endowed with natural resources. Yet this only compoundsNiyazov’s dictatorial regime. Thankfully for Turkmenistan and its atrociously poor people, he died in 2006 and the new leader had mooted reforms throughout the country.

This latest discovery will lead to a rush of foreign investors eager to extract the gas from Turkmenistan. Russia, having already got good relations and existing deals with Turkmenistan, appear to be best placed. However, the previous regime and the currentincumbent have pursued a strictly non-partisan and neutral foreign policy. All bidders, therefore, might well stand a fair chance. But then again, this is Turkmenistan after all, so who knows?

China’s demand for oil: a tale of three graphs 15, October 2008

Posted by thegulfblog.com in China.
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We all know that a picture can tell a thousand words, but how about a graph? For my money, I’d suggest that they can tell rather a lot too. And, to keep the slightly confused mixed-topic-analogies going, one mustn’t forget that there are lies, damned lies, and graphs.

Consider the following graph from this excellent website.

This clearly shows that China’s production of crude oil is rising steeply. This is no doubt a good thing (though not necessarily for the planet). Everyone knows that China’s demand for energy is rising and seemingly insatiable. So if they can produce such an amount (and such a large increase) of oil, this leaves more for the rest of us. This would mean that there would be marginally less demand on, for example, Middle Eastern oil, and this can but only help the price stay one or two cents lower.

However, consider the following graph. This is taken from the same site and shows China’s predicted oil reserves. The rising red line to the orange vertical line is the actual known production. The line on the other side is the predicted curve using the Hubbert curve. This is a formula used for predicting when oil will run out. It suggests that the rate that a country can find and produce oil (how steep the initial curve is) will be mirrored in terms of its downturn after the peak has been reached. The author of this thesis – King Hubbert – was initially ridiculed for this thesis, but was proved eerily correct when he correctly predicted – decades before the event – that American oil supplies would peak and begin to fall in the 1970s.

This graph, obviously, is not as positive. Moreover, it is rather pessimistic. Just look at the predicted precipitous decline of production of barrels of oil, beginning in the next five to ten years. Such a steep decline means that China will inevitably dive into other sources of oil at quite a rate come 2020, according to the prediction. Obviously, China realise this to some degree and are currently scouring the world for oil as we speak, but this search will turn into something of a mad panic should the decrease be as steep as predicted. For it is one thing to plan for a future problem; it is another if and when the problem is immediate and rather larger than expected. Needless to say, such a massive leap in demand would cause an equally large rise in the price of oil.

And the situation gets worse. Look at the following small graph.

The vast Chinese demand for oil can clearly be seen here and there are few indicators suggesting that this demand will slow that much. Certainly it will not drop or even markedly drop off. Therefore, couple this large increase with the previous graph and there is a worrying conflagration of factors that bode ill for oil supplies and in particular the oil price in the near future.

These graphs show that all angles of a problem must be examined before a conclusion is made. If one were only to see first graph, the prognosis might be significantly rosier than it perhaps ought to be. One can only hope that either Hubbert’s equation is wrong this time or I’ve simply missed out a crucial graph or three.

New Cold War? 15, October 2008

Posted by thegulfblog.com in Russia.
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Foreign Policy has some impressive pictures in this month’s issue of the Russian rocket that took Richard Garriott into space last week. Despite the muted notions of a new cold war, surely examples of cooperation like this suggest that such notions are wildly off the mark. Inshallah.