Accessibility links

Western Press Review: Commentary Differs On Cost Of High Price Of Oil

  • Don Hill

Prague, 3 June 2004 (RFE/RL) -- With no major news events dominating the public agenda, Western press commentary examines a variety of issues today. Several editorials examine oil prices, supply, and influence.


In an editorial, Britain's "The Times" says there are rational reasons behind the current high world oil prices -- high demand led by China's roaring economy, fears of supplies being interrupted by possible terrorist acts in Saudia Arabia and the rest of the Mideast. But, says "The Times," the "resulting oil price rise has been exacerbated by those jolly souls, the speculators."

The editorial says: "Such speculative bubbles are fairly easily punctured. Oil prices began to retreat yesterday from their 21-year high after the president of the Organization of Petroleum Exporting Countries (OPEC) told his members to reassess their ability to raise production."

The newspaper continues: "Nevertheless, the attacks in Saudi Arabia over the weekend do raise legitimate questions about the possible impact of continued instability in that country."

The editorial says: "The risk of imminent violent regime change in Saudi Arabia is relatively small, but real; and it is growing while the House of Saud is slow to reform."

"The Times" concludes: "A greater concern is that costs of extraction will rise in about 15 years' time, as the easy oil starts to run out. At that point, Chinese roads may well be full of gas-guzzling cars and global demand will be far higher."


Across the Atlantic, "The Washington Post" in an editorial seems to echo "The Times'" comment. "There is no denying that the world is to an alarming extent reliant on Saudi oil. The kingdom accounts for fully a quarter of the world's proven reserves; even more alarmingly, it is the only producer that can ramp up production to a significant extent on short notice. Whereas in 1990 OPEC countries had unused production capacity equivalent to 8 percent of global consumption, today spare capacity has shrunk to about 3 percent, and nearly all of that is in Saudi Arabia. Even if it's right that terrorist strikes on Saudi oil infrastructure are unlikely in the near term, long-term reliance on the stability of an autocratic monarchy is a frightening prospect."

The newspaper says, "The OPEC meeting today [in the Lebanese capital Beirut] will promise extra production -- meaning, mainly, extra Saudi production -- in an attempt to calm traders' jitters."

It says: "The United States should embrace policies that discourage reliance on oil -- not just foreign oil but all oil, because Saudi Arabia's position as the buffer producer makes the price of oil pumped everywhere from Texas to Central Asia vulnerable to terrorist attacks in the kingdom. The most direct ways to promote the use of other types of energy are a cut in federal subsidies to the oil industry, and a gasoline tax increase."


Britain's "The Independent" editorializes that, though high-cost fuel is a genuine hardship for some, the high prices are not entirely negative in effect. "In truth, for many people higher prices are manageable and, on balance, in the greater interest of this country's environmental health, even desirable. In real terms, the price of petrol is nothing like as high as it was during the oil crisis of 1974, and there is still far to go before it reaches this point. The fact that oil is priced in dollars, while sterling is currently strong, has protected us to an extent. But these are early days."

Also, says "The Independent: "Any panic about the future of supplies from Saudi Arabia may also be premature. The recent attacks have raised fears about the stability of the Saudi regime and about a possible collapse in the flow of oil from the world's largest producer and exporter, but supplies have so far not been disrupted. The security of oil fields and pipelines has been enhanced, and -- perhaps to reassure U.S. companies in particular -- the Saudis have also undertaken to increase output in the short term, whatever the OPEC cartel decides at its meeting today in Beirut."


"The Christian Science Monitor" contends editorially that -- whatever the cause of the present price-of-oil issue -- one response should be reform in Saudi Arabia. The newspaper says: "Oil prices are rising for a range of reasons, from too many gas-guzzling SUVs in America to booming demand in China. But one reason is relatively new -- terrorist attacks in Saudi Arabia that threaten the flow from the world's largest oil reserves."

It says, "The attacks also refocused attention on the need for Saudi Arabia's royal family to make the kind of internal reforms that can channel growing political dissent through some form of homegrown democracy, instead of through Al-Qaeda."

The editorial goes on: "The glacial pace of reforms begun by Crown Prince Abdullah isn't fast enough for the urgent need to bring about political and social change. Both global oil markets and the war on global terrorism now depend in some measure on the monarchy working harder to fulfill the aspirations of its people for representative government, even one that reflects some Islamic principles."'

It warns, "Minimal change toward liberalization is a dangerous course."


Britain's "The Guardian" says, "Surging oil prices suddenly have become an embarrassing political problem for the government [and] a medium-term danger to the economy." For one thing, it inhibits a plan to cut consumption by raising taxes.

However, "The Guardian" says: "Much more important in the long run is what happens to oil and other commodity prices -- which are also rising sharply. It is imperative to prevent a recurrence of the quadrupling of crude oil prices in the early 1970s that ushered in nearly two decades of high, and highly debilitating, inflation from which the world economy has only recently escaped. Although developed economies use oil much less intensively than they did then, it is still a vital input. The International Energy Agency reckons that a $10-a-barrel increase knocks 0.4 percent off economic growth and adds 0.5 percent to consumer prices in OECD countries."


"The Independent" says in an editorial that Islamophobia -- an aversion to Islam -- is a "rising tide" in Britain. The editorial says that since the attacks in the United States of 11 September 2001, "there has been an upsurge in attacks [in Britain] on Muslims and their places of worship. The police have been ineffective in preventing such assaults. They seem more concerned with harassing young Muslims under new stop-and-search powers granted by the Terrorism Act. There has been little evidence that such heavy-handed tactics achieve anything other than alienating the Muslim community."

The newspaper says: "Despite the efforts of organizations such as the Muslim Council of Britain, the message is not getting across that, while Osama bin Laden and his acolytes may consider themselves devout Muslims, there is nothing Islamic about the carnage they have caused. Britain's Muslims know this to be true, and it is high time everyone else accepted it too."

"The Independent's" Adrian Hamilton, in a separate commentary today, predicts the imminent demise of pro-Iraq-war national leaders. "Looking along the list of Western leaders assembling for the celebration -- or should one call it appropriation -- of the 60th anniversary of D-Day, two nagging thoughts occur. One is that no generation of Western leaders has done so much to damage the trans-Atlantic alliance since the war as this group. And the other is that the entire company of supporters of the war in Iraq which has brought those fractures about could be out of power within the next year."

He writes: "Jose Maria Aznar has already gone, of course. But not one of the rest has any longer a majority in the opinion polls. President Bush's ratings have slipped well below 50 percent. So have Tony Blair's. Australia's John Howard, who is expected to go to the country in October or November, has been trailing in most of the recent opinion surveys. Silvio Berlusconi, who has the longest to go, has been fast losing support in the country. Even the Polish premier is in none too good a shape. Come this time next year we could be facing an entirely different line-up."


In a commentary in the "Financial Times," French writer Dominique Moise, a senior adviser at the French Institute for International Relations, laments: "What happened to the America I knew -- the one that liberated my country, France, beginning with the Normandy landings 60 years ago? As we prepare to celebrate the sacrifice of the heroes of D-Day, the contrast between the images of Normandy beaches and Iraqi jails could not be more painful and saddening."

He writes: "The temptation to put the past on a pedestal is a dangerous one. Yet I think it is true to say that the soldiers who landed on Omaha and Utah beaches, and elsewhere, were animated by a deep idealism." Moise adds: "The abuses of power that we see today cannot be written off as regrettable, but largely inevitable, consequences of a dirty war. The violations of the Geneva Conventions by Americans -- be they soldiers or private security contractors -- point to a more fundamental malaise. Indeed, the government's explicit refusal to be bound by those conventions in the 'war on terror' is another symptom of that malaise."

The writer says: "This weekend we shall remember not only the heroic sacrifices made by soldiers from the United States, Britain, Canada, Poland and many other countries but also the postwar reconciliation between France and Germany. We shall celebrate the West's surmounting of its fratricidal divisions. Yet the ugly reality of the Iraq war, and the diplomatic rancor it has provoked, will give this celebration an aura of artificiality. Observers will ask whether the politicians can really be sincere in their expressions of mutual solidarity."

A "Financial Times" editorial, under the headline "Fortress America" says: "Following a barrage of complaints from American universities about the increased difficulty of getting visas for overseas students, business organizations this week weighed in with criticism of the security restrictions that hamper business travelers to the U.S. Though such costs are always hard to pin down, their estimate of the cost -- $30 billion in a $100 billion economy -- if anything looks like an underestimate.

"While it was inevitable that 11 September would cause a tightening of U.S. entry requirements, the State Department and the new Department of Homeland Security seem to have responded with the heavy-handed, inflexible, box-ticking bureaucracy that too often characterizes American public services. Stories abound of business travelers with no conceivable involvement with terrorist organizations being routinely called for pre-entry interviews. The survey of businesses revealed that visitors from countries such as China -- not normally regarded as a hotbed of international Islamic terror -- were among the worst sufferers.

"Such inefficiencies are clear, as is the damage they inflict -- not just in lost contracts, workers and students -- but [also] in the image projected abroad of an isolated and defensive nation. No one would deny the United States' right to protect itself, particularly given the ease with which the 11 September hijackers entered and lived in the United States, and the warning signals that were ignored. But creating a system where the overwhelming incentive is to keep out visitors is at odds with the dynamism and engagement with the world that makes America such an attractive destination."


"The Irish Times" commentator David Hirst writes from Beirut that the cost of what he calls the U.S. "failure in Iraq" is that the worst is yet to come. The writer says: "In Iraq and Palestine, more obviously than anywhere else, the United States directly or indirectly now has empowered the very forces -- Islamist and nationalist, populist, violent and fanatical -- it came to quell. That is because that is where Western interference has gone further than anywhere else. But such forces also stem from the moral and political bankruptcy of Arab governments, which have failed in what should be the basic duty of any state, the defense of land, people and sovereignty against foreign assault and domination. From that standpoint, the Islamists are simply non-state actors who have assumed that duty themselves, with jihad, terror and suicide as their means."