News Release

Rising Cost of Oil… And Embargo


During the last year, gasoline prices have gone up from about 90 cents a gallon to $1.36, while crude oil has gone from $12 to $30 a barrel. Hauter, director of Public Citizen’s Critical Mass Energy Project, said today: “Throughout the history of the oil industry, it has been plagued with sharp peaks and valleys in oil pricing. The recent rise in oil prices is completely predictable. Most of the time, oil interests are able to collude and keep prices high. But, occasionally, like last year, their cooperative — some would say non-competitive — efforts fail and prices plummet. As long as public policy on oil issues is driven by the oil companies’ enormous campaign contributions, the recurrent pattern of crisis will continue… It’s true that OPEC is cutting production, but many of these countries like Saudi Arabia have a historically close relationship with the U.S., so the question is: why are they cutting production? Other questions are: what does this have to do with the election season and who are the oil companies backing and who would benefit from the economy slowing down?”
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An economist at the Commonwealth Institute, Breslow said: “OPEC is exerting a little more control, which is likely to be short term. Oil companies use such opportunities to exploit the situation for short-term profiteering. While rising prices hurt consumers, for environmental reasons the price of oil should be higher. But the money should be recycled to people in an equitable fashion.”
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A fellow at the Institute for Policy Studies, Bennis said: “On Monday, Hans Von Sponeck, the UN’s Assistant Secretary-General and humanitarian coordinator in Iraq, announced his resignation after 15 months on the job, because he became convinced that ‘every month Iraq’s social fabric shows bigger holes.’ The next day, the chief of the UN’s World Food Program in Baghdad, Jutta Burghardt, quit as well, also to protest how the economic sanctions are eroding Iraqi society. Van Sponeck’s predecessor, then-Assistant Secretary-General Denis Halliday, quit the same position after 13 months, also to challenge the economic sanctions responsible for the deaths of hundreds of thousands of Iraqi… The most recent Security Council resolution, which many in Washington like to claim would lift the sanctions, actually does no such thing. It…considers, more than a year down the line, the possibility that some economic restrictions might be temporarily suspended. But the default position remains that economic sanctions stay… Under such restrictions, no oil company worth its stockholders is likely to risk serious large-scale investment in Iraq, however much they may covet Iraq’s oil wealth.”
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For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020; David Zupan, (541) 484-9167