The U.S. rulers, who have a long-term aim of breaking up OPEC, have seized on the latest round of energy price explosions to mount a campaign of slanders and threats against this organization. The House of Representatives, in a 382-to-38 vote March 22, urged President William Clinton to cut U.S. economic and military aid to OPEC-member countries if they do not heed Washington's demand for increased oil production.

The Federal Trade Commission is reviewing court rulings to see if they can charge OPEC with violating U.S. antitrust laws. The House judiciary committee announced plans to hold hearings on this at the end of March.

Ultrarightist Patrick Buchanan, who is seeking the presidential nomination on the Reform Party ticket, blamed the 14 percent drop in the stock market this year on "a global conspiracy by the OPEC cartel to loot the American nation." He called for "smash[ing] the price-fixing conspiracy called OPEC."  
 

U.S. oil giants

In response, the 11-member nations of OPEC—Saudi Arabia, Iran, Kuwait, United Arab Emirates, Qatar, Iraq, Libya, Algeria, Venezuela, Nigeria, and Indonesia—agreed to a series of production cuts adding up to about 5 million barrels a day in an effort to raise the rock-bottom oil prices. Mexico, the world's fifth-largest oil producer, agreed to cut its output as well. The country is not an OPEC member.

Initially the cuts, which were adopted at OPEC's semiannual meetings beginning in 1998, had virtually no impact as oil prices continued to slip further. Then in March 1999, Norway, a non-OPEC producer and the second-biggest oil exporter after Saudi Arabia, decided to also cut its production. Russia and Oman followed suit. This, combined with OPEC's decision that month to further trim output by 2.1 million barrels a day, led to a rapid rise in oil prices, reaching more than $34 a barrel a year later." Oil producing nations, their solidarity in tatters as recently as 1997, have engineered a period of strategic harmony unseen since the Arab oil embargo of 1973," bemoaned an article in the February 21 New York Times.

Quoting an unnamed Saudi official, a feature article in the Wall Street Journal March 27 pointed out, "Only a year ago independent U.S. oil-production companies alleged that Saudi Arabia and other foreign producers were dumping cheap oil. 'Now the Americans want to penalize us for gouging,'" the official said.  
 

Facts on price hike

Some 44 percent of U.S. crude oil—about 6 million barrels a day—is domestically produced, and 56 percent is imported. Half of these imports are from countries that are not members of OPEC. Washington has been shifting more of its oil imports away from the Mideast and towards Latin America, where its close proximity and decades of economic domination have given the U.S. rulers more firm control over it.

As part of its 1995 "bailout" agreement of the Mexican peso, for example, Washington wrested an agreement from the government there that all export revenue from the state-owned oil company, Pemex, would be deposited in an account at the Federal Reserve Bank of New York until 1997 when the country paid back to the U.S. Treasury a $50 billion loan, along with $580 million in interest.

From 1990 to 1997 oil imports from both Venezuela and Mexico nearly doubled to close to 500 million barrels a year from each country. This compares to 591 million barrels imported in 1997 from all the OPEC-member countries in the Arab-Persian Gulf.  
 

Profit boon for U.S. companies

California-based refineries since early January have nearly tripled the amount they charge for manufacturing costs and profit. That share jumped from 24 cents per gallon in early January to 66 cents at the end of March. At the same time crude-oil costs rose just 8 cents a gallon. "At the price being paid at the pump, taxes account for 49 cents per gallon. Crude oil accounts for 66 cents. The rest is the oil refiner's cost and profits," states the Register.

For 1999, profits at British Petroleum Amoco—the world's second-largest oil company—rose 40 percent over the previous year, to $6.2 billion.

Though prices are at record high levels, the big oil companies are not plowing their money back into exploration and production. "This is probably the longest sustained dramatic upturn in price not followed by a dramatic upturn in investment," commented Joseph Stanislaw, president of Cambridge Energy Research Associates.

Instead, these oil giants are seeking to merge with their competitors in order to further tighten their monopoly control over all aspects of oil production while implementing various cost-cutting measures aimed at rights of labor. Last year Exxon and Mobil carried out an $82 billion megamerger, creating the second-largest U.S. corporation in terms of total sales and the largest publicly traded oil company in the world. Recently, Royal Dutch/Shell and Texaco agreed to cooperate in a refining and marketing joint venture.

Eighteen months ago British Petroleum merged with Amoco. Now, it's seeking a $27 billion deal to buy out the U.S Atlantic Richfield Co. If this deal goes through it would give this oil conglomerate control more than 70 percent of Alaska's North Slope oil field, the largest in the United States.  
 

Asserting right to control oil wealth

While OPEC did have an impact in getting for its member countries a greater share of the oil wealth, the organization has not been able to dictate world market prices nor dominate world supply and demand for this raw material.

The imperialist system thrives on the inherently unequal terms of trade it maintains with its former colonies in the Third World. What they lost in one area such as oil, the imperialists recoup in others. For example, the ruling rich import from these raw materials at cheap prices and sell back at monopoly prices finished manufactured products, agricultural products, and expensive military hardware.

Wealth is also siphoned out of these semicolonial nations through interest payments on the huge debts owed to banks in the imperialist centers. In the case of Iraq, the military assault by Washington in the early 1990s and the ongoing economic embargo has devastated this oil-rich country, which had been one of the most industrialized nations in the Arab world.

Since the massive upsurge by workers and peasants overthrew the shah of Iran in a revolution in 1979, the U.S. rulers have conducted a military and economic campaign against Iran, the world's third-biggest oil exporter. Washington bankrolled an eight-year war by the government of Iraq against Iran in the 1980s, and they've maintained a 20-year embargo on most goods produced in the country.

Venezuela, another OPEC member, lies economically devastated with high unemployment, declining social services, and additional disaster for tens of thousands following recent torrential rains.

The Arabian oil kingdoms—Saudi Arabia, Kuwait, United Arab Emirates—with their reactionary social structure and semifeudal foundations were set up and are maintained in power by Washington. The U.S. government maintains some 1,600 U.S. troops inside Saudi Arabia. That government had to fork over to the U.S. imperialists nearly $17 billion to cover the costs of Washington's war against Iraq. Another 20,000 U.S. troops remain in Kuwait.

Washington will continue to use its power in the region to reassert greater control over the organization of world oil markets, and bolster its competitive standing against other imperialist powers, over which it continues to have quite an edge in use of the oil weapon. Washington in 1997 imported 20 percent of its oil from the Arab-Persian Gulf, compared to some 35 percent by Germany and 70 percent by Japan in the early 1990s.

While coming into conflict with imperialism, OPEC member nations are themselves class divided, each with a developed capitalist class that seeks to look out for its own interests and fears most of all the working class in its own country. In each of these countries—from Iran and Iraq, with large and industrialized workforces, to Saudi Arabia, with its "guest" workers—class conflicts are a potentially explosive ingredient.  
 
 
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