• Wall Street set to profit at your expense from rising tensions in Mideast
by Pete Papaherakles
Could prices at the gas pump reach $5 a gallon
byMemorial Day? Experts on oil believe that
projection is not unrealistic. Gas prices have
already reached $4 in some parts of the
country since the saber rattling over Iran started.
Speculation determines the actual price of gas, although
we are told that it is based on supply and demand.
In the United States analysts claim that
production costs account for 68 percent of the price at
the pump, refining 13 percent, distribution and marketing
7 percent and taxes 12 percent. However, speculators
buy millions of barrels of oil at the auction
floor and sell it as “futures,” betting that oil prices will
rise. And they do. All that is needed is for the White
House, Congress, the Pentagon and Wall Street to
work together, creating crises themedia can hype. Oil
prices go up, speculators make a bundle, and all the
1 percenters are happy. On the other hand, we, the 99
percenters, are left “holding the pump.”
Some countries can sell gasoline to their citizens
much cheaper than the U.S. In Venezuela, gas is 9
cents at the pump. In Nigeria, it sells for $0.38 and
Saudi Arabia for $0.49 per gallon. In Qaddafi’s Libya,
gas sold for $0.46 a gallon, but now that the country
has been “liberated,” the price has skyrocketed to 28
times asmuch, or over $12.Meanwhile, in Europe, gas
goes for as much as $9 a gallon.
The wars in Afghanistan and Iraq sent oil prices
soaring in the U.S., although we get no oil from
Afghanistan and only about 3 percent of our oil came
from Iraq. The price per barrel of oil rose from $27 in
2001 to $38 when we went to war with Afghanistan.
Then it jumped to $76 in 2006, well after we gained
control of oil supplies in Afghanistan and Iraq.
The mere signing of the defense authorization bill
at Christmastime, which authorized sanctions on the
sale of Iranian oil, has already sent U.S. prices higher.
As the sanctions progressively restrict Iran’s oil sales,
it is expected the price will continue rising. This
comes despite the fact that the U.S. has not bought
Iranian oil for 20 years, and, in the end, we only get 7.5
percent of our oil from the Persian Gulf.
It will be hard to justify how a 7.5 percent reduction
in supply, which our other suppliers will gladly fill,
could account for a 50 percent increase in price, but
there can be no doubt Wall Street will try to pull it off
anyway.
——
Pete Papaherakles, a U.S. citizen for more than 35 years, was born in Greece.
He is AFP’s outreach director. If you would like to see an AFP speaker at your rally
or meeting contact Pete at 202-544-5977
byMemorial Day? Experts on oil believe that
projection is not unrealistic. Gas prices have
already reached $4 in some parts of the
country since the saber rattling over Iran started.
Speculation determines the actual price of gas, although
we are told that it is based on supply and demand.
In the United States analysts claim that
production costs account for 68 percent of the price at
the pump, refining 13 percent, distribution and marketing
7 percent and taxes 12 percent. However, speculators
buy millions of barrels of oil at the auction
floor and sell it as “futures,” betting that oil prices will
rise. And they do. All that is needed is for the White
House, Congress, the Pentagon and Wall Street to
work together, creating crises themedia can hype. Oil
prices go up, speculators make a bundle, and all the
1 percenters are happy. On the other hand, we, the 99
percenters, are left “holding the pump.”
Some countries can sell gasoline to their citizens
much cheaper than the U.S. In Venezuela, gas is 9
cents at the pump. In Nigeria, it sells for $0.38 and
Saudi Arabia for $0.49 per gallon. In Qaddafi’s Libya,
gas sold for $0.46 a gallon, but now that the country
has been “liberated,” the price has skyrocketed to 28
times asmuch, or over $12.Meanwhile, in Europe, gas
goes for as much as $9 a gallon.
The wars in Afghanistan and Iraq sent oil prices
soaring in the U.S., although we get no oil from
Afghanistan and only about 3 percent of our oil came
from Iraq. The price per barrel of oil rose from $27 in
2001 to $38 when we went to war with Afghanistan.
Then it jumped to $76 in 2006, well after we gained
control of oil supplies in Afghanistan and Iraq.
The mere signing of the defense authorization bill
at Christmastime, which authorized sanctions on the
sale of Iranian oil, has already sent U.S. prices higher.
As the sanctions progressively restrict Iran’s oil sales,
it is expected the price will continue rising. This
comes despite the fact that the U.S. has not bought
Iranian oil for 20 years, and, in the end, we only get 7.5
percent of our oil from the Persian Gulf.
It will be hard to justify how a 7.5 percent reduction
in supply, which our other suppliers will gladly fill,
could account for a 50 percent increase in price, but
there can be no doubt Wall Street will try to pull it off
anyway.
——
Pete Papaherakles, a U.S. citizen for more than 35 years, was born in Greece.
He is AFP’s outreach director. If you would like to see an AFP speaker at your rally
or meeting contact Pete at 202-544-5977
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