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Stabilizing on the Upside: A Tale of Oil, Saddam Hussein, and Rotting Fish
September 7, 2002
By Anonymous

"President Bush and Defense Secretary Donald H. Rumsfeld yesterday ridiculed press speculation about war against Iraq, which they dismissed as a "frenzy," but continued to call for the ouster of Iraqi President Saddam Hussein."
       — Washington Times, Aug. 22

Watching Defense Secretary Donald Rumsfeld chortling alongside President Bush as he wagged his finger in Crawford at the "media frenzy" over heated rhetoric on Iraq, one wonders the depth of pleasure they take in treating mass public concern like a personal yo-yo.

After the longest politico-military striptease in history it looks like the "doves" -- or the chickenhawks that pass for doves -- are convincing Bush that attacking Iraq should wait. Not be scrapped, just wait for some arbitrary deadline they have yet to impose. The argument has moved from whether striking a country first is totalitarian to just hoping Bush at least consults with Congress before carrying out his "Bush Doctrine."

But disaster for the Bush administration came in the form of several high-profile defections from friendly camps. For an administration that puts loyalty above all and admonishes those who dare publicly stray from the day's talking points -- the desertion of the likes of Brent Scowcroft, Laurence Eagleberger and Henry Kissinger must have been brutal.

But then, the ultimate betrayal. It came in the form of the 4-Star General hand-picked by his father's administration to command U.S. forces during Desert Storm. Stormin' Norman Schwarzkopf cleared the room when he pleaded for the U.S. to wait for international support before striking Iraq.

And just how did the Bushies handle this extraordinary double-cross? These treasonous acts of disloyalty at the highest level unheard of in his tenure up to this point? Do Rove and Bush summon the triumvirate to the Oval Office to wreak carnage with a verbal J-DAM on them? No. They politely grin and bear it.

Furthermore, he spends an entire military summit in Crawford with the highest military brass (except Colin Powell -- the only real dove) supposedly not talking about Iraq. Has Bush undergone an about face on dissension amidst his ranks? Is this a new day for honest debate within the White House? Hardly.

This isn't about a battle, Saddam or even "weapons of mass destruction." Surprise. This is about oil.

The rhetoric on Iraq has reached a fevered crescendo in recent weeks. But what can be gained from giving a planned enemy target over years' worth of prior warning and time to adapt? Why on earth would seasoned military minds like Rumsfeld, Paul Wolfowitz and Richard Armitage allow the U.S. to lose one of the most important factors in any battle -- the element of surprise?

One thing the media doesn't give this administration credit for is its Machiavellian adeptness in using submissive media for its own sordid ends. Years from now we will be discussing how Bush shrewdly maneuvered his way through numerous budding scandals that would have rocked any Clinton White House.

From allegations of inaction on terrorism before September 11, energy task forces, Harken dealings, Enron and his connection to "that man Mr. Lay" -- Bush's Teflon is worn underneath his suit (or under his chain-sawing Dungarees in Crawford). The September 11 attacks are only part of the job approval equation.

Iraq has been an issue for Bush since day one of the presidency for reasons not discussed by the media. Instead, rationale ranging from payback for daddy to the necessity of striking a country first to protect Americans from weapons of mass destruction are served up nightly for our consumption. That nightly spin misses the underlying point behind the talk on Iraq.

In the last year, global crude oil prices have risen a whopping 40% on average. International fears of a war in Iraq have given the market jitters and artificially propped up crude oil market prices to year-long highs. The ideal situation for Bush or anyone else with who stands to make substantial gains in the oil market would be to prop up prices then stabilize them at the artificial highs.

This practice is known in the business as "stabilizing on the upside." The idea is to prop up prices, and then find ways to keep them at unnatural highs for as long as possible while oil companies amass windfall profits. Who does this benefit? Crude oil producers, shippers and oil refiners. In a word: Texas. More specifically, Bush. It's not a new practice. Except this time, the oil industry has a very effective spokesman in a very influential position to carry it out on a global scale.

You don't raise and spend the most money in history to get a president elected and not get something in return. Bush needs to replace the astronomical amount of money those oil barons gave to his 2000 campaign if he wants to mount a similar campaign in 2004. Don't forget, Bush will have to actually spend money on a campaign jet. It's doubtful he'll be using Ken Lay's plane for $5,000 a month this time around.

So with Iraq on the brain, West Texas Intermediate Crude reached its most expensive levels since September 11 last a few weeks ago, reaching $29.83 a barrel. With a 40% jump in crude oil and oil future prices, the benefactors read like a who's who of Bush campaign contributors.

But how can global can oil prices be manipulated to this extent? An oil industry expert puts it quite simply.

"The only justification for prices rising this high is the conviction there will be a war," said Sheryl Kaufman, chief economist at Phillips Petroleum Co., to the Bloomberg Business News. Not war, not an actual event, but the "conviction" that there will someday be an event. That's the point. Not war, just speculation.

Fearing an imminent military invasion, Saddam has understandably decided to cut Iraq's oil output by 40% to preserve his most precious economic resource. The large cuts in output made by Iraq cannot be countered by OPEC (and won't be with a nod and a wink from the White House). This creates an instant boost for prices. The "war premium" has added anywhere from $4 to $6 a barrel. Even OPEC is sending mixed signals to the market. Algeria and Nigeria want higher quotas to make up the difference. Kuwait, Qatar and Venezuela want to wait. Though most are cheating on their quotas anyway.

High oil prices, more demand and less supply helps the Bush energy policy's pathetically transparent call for more domestic drilling (though you won't see those rigs off the coast of Brother Jeb's Florida in an election year). But "stabilizing on the upside" requires fresh meat: a constant flow of mixed signals and confusing rhetoric so the market stays jittery.

In this context, the numerous timely leaks of sensitive planning information on Iraq being leaked by administration officials to the New York Times make much more sense -- as does why the White House hasn't yet found the source of those pesky-durn leaks either.

But an unexpected glitch has materialized in the White House plan. High oil prices stall economic recoveries. With fears of a double-dip -- or "W" shaped recession -- and a November of reckoning for the GOP, Bush can't afford to keep oil prices too high while the economy is stalling.

Send in the doves.

Then Saddam throws an early September curveball and has his man Tariq Aziz tell the world he'd consider letting U.N. weapons inspectors back in. Bastard! Upon hearing the news of the evil one's dastardly plot, crude oil futures contract dropped $1.19 to settle at $27.79 a barrel on the New York Mercantile Exchange. Heating oil and gasoline prices both fell about 4 cents as well. But what is good for us consumers is bad news for Bush so action was quick to follow.

Immediately Bush convenes with members of Congress and assures them and the nation that he will consult them before attacking Iraq. "For the last 11 years, Saddam Hussein has sidestepped, crawfished and weaveled out of his obligations," Bush said Wednesday in response to questions about inspectors back in Iraq. With the tough-talking photo-op, gasoline, heating oil and crude oil prices all spiked yesterday.

Now, the public is told that an pre-emptive attack on Iraq may happen during this congressional session. This despite earlier published reports that Bush promised senior congressional officials there would be no "October Surprise." Well, maybe he just meant the surprise.

Back on a dusty road in a small central Texas, Rumsfeld cackles approvingly Bush declares "I'm a patient man," in response to queries about Iraq. Rummy sees Bush is learning from his own wry degradation and humiliation of reporters. Bush goes on to tell reporters that Iraq wasn't even a topic of discussion during the military summit. But unable to resist one last prank on the media, Bush divulges he's supposedly reading Supreme Command by Eliot Cohen, a book about civilian military brass dismissing military generals and going to war.

Then, Bush makes it a point to stress his reiterate his disinterest in Iraq -- admonishing the media for behaving like mindless sharks around a big sea of chum.

Bush's 'plan' on Iraq isn't a foul, rotten soup of fish guts. But it sure smells like it.

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