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Wednesday, November 14, 2007

Oil Producers Step Up Political Pressure

Open Gallery...Nov. 13, 2007 - Kommersant - The prices for crude oil have hit all records this year, having soared to $98 per a barrel past week. No prerequisites for any decline have emerged so far. The rally on the global market of crude oil of this extent urges oil producing states to toughen control over their biggest oil fields. The influence on political arena is stepping up as well. As to the global consumers of crude oil, the current situation isn’t in their favor. The expanding nationalism of resources toughens the contract terms, driving down at the same time both investments and production efficiency. The winners are the biggest producers, such as Russia, Venezuela and Iran. Skyrocketing prices for crude oil fuel their super-profits and increase political pressure that they are exerting. Nowadays, the state-run oil companies control three-fourth of the crude oil worldwide, which negatively affects the assets of such giants as Exxon Mobil and Royal Dutch Shell. The OPEC is forecasted to generate record profits of $658 billion this year (vs. $605 billion in 2006). But producing states tend to inject funds not in development of new fields but in some other things, which curtails the reserves of crude oil. Venezuela’s President Hugo Chavez, for instance, uses the oil money to install Cuban-inspired socialism.

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