“Why Oil Prices Goes Up” was the title of a very important article written by V.H.Oppenheim, published in Foreign Policy in 1976.
Now that oil prices in real terms are lower than they stood before four decades and the trend is falling, there should be no apparent reason to bring the above mentioned piece for discussion.
Yet, let’s have a look on the broader and more explicit title:
“The Past: We Pushed Them”. This is a staggering announcement supported by published official US documents and exhaustive interviews with policy makers no longer with the government who accepted to be quoted.
Nevertheless, it suited politicians in most oil-producing countries to propagate the version that high oil prices were there merit in their nationalist struggle against imperialism and transnational oil companies…And that was music for policy makers in the the US and even more for the anti-Arab media in general.
As the dominant world power the US have indeed achieved, since 1971, many of its strategic energy objectives. The very existence of OPEC as a mythical opponent to these vital needs, helped to make the dreams come true.
Perhaps the Shale Revolution is the the most recent and palpable fact that the massive exploitation of these vast resources was commercially feasible due to the pressure exercised within OPEC by those who favoured extremely high prices… As in the seventies and eighties, again at the beginning of this century they enabled both the Administration and the hydrocarbon industry in the United States to accomplish its plans. Indeed, production costs of Shale oil are competitive as can be seen in the graph below.