Don't blame Arabs for oil prices

By Aref Assaf

Read typically nasty online comments here

Also republished  in the Bergen Record on July 14, 2008

Arab bashing is now taking shape in the understandable disgust we have over the ever-increasing price of fuels. Threats of lawsuits and push for alternatives to fossil fuels are headline news. But who really dictates the price of oil?

Some facts may help widen our knowledge of the problem we are facing:

The U.S. buys no more than 10 percent of its oil from Arab oil-producing countries of the Middle East. It buys more oil from Canada and Latin America.

The best and most sensible solution to skyrocketing gas prices is for each one of us to use less fuel.

The price of oil is dictated to large extent by U.S. oil companies, which control the worldwide supply chain, and more importantly, the supply and demand imperatives, which are manipulated to raise and fatten up coffers.

U.S. oil companies are largely to blame for gasoline price increases and fluctuations; they should build more refineries in the United States to alleviate the increasing demand for refined oil in this country -- 1973 was the last year the U.S. had a refinery built. There is plenty of crude oil in the U.S., but not enough refined gasoline for consumption.

Oil prices are pegged to the deteriorating value of the dollar; the more the dollar loses its conversion ratio against other world currencies, the higher the price of crude oil and ultimately, refined fuel. Oil prices will be reduced if the value of the dollar, whose control is in the hands of our Federal Reserve, not OPEC, increases.

Arab oil-producing countries' national reserves have been devalued significantly because they are invested in U.S. Treasury Bills, bonds and other financial instruments. We should blame the greedy American oil companies for their monopolistic and selfish practices, which exaggerate world instability, if not fuel it, to increase their unbelievable profits.

In their relations with the U.S. and other advanced nations, these companies no longer shun government regulation, because most of the regulations imposed on them are supportive of, and increase the profits of, the companies themselves. The regulations fall more into the area of corporate welfare than into the area of inducing the corporations to become better citizens. In the U.S., the ties of the oil companies with both of the major political parties are close and mutually profitable.

Our government ought to aggressively fund large-scale research into safer and cleaner energy sources as alternatives to oil dependency instead of waging wars to control the world supply chain, which only benefits oil companies and their lobbyists in Washington, D.C.

Arab and Muslim countries wish for the U.S. economy to grow. Indeed, it is in their best interests that our nation's economy is stable, without which, their only source of foreign remittance, namely the sale of oil, will be harmed.

By increasing output by half a million barrels a day, Saudi Arabia is doing its best to bring down prices. What about the governments of consumer countries where rocketing prices have triggered strikes, in turn causing petrol shortages? With the tax take on petrol based on the price of oil, they have been raking the money in. In Europe, for example, the tax take on a liter of petrol is as much as 70 percent.

Consumer governments could reduce it, and thereby the price of petrol, to the levels they anticipated when they drew up their 2008 budgets. In refusing to do so, they make themselves as much part of the problem as the speculators.

Simplifying world issues by depicting Arabs as bad serves no positive end.

It only propagates prejudice and fosters unnecessary animosity.

It does not ease our pain at the pump.