Since many months the price of oil has plummeted from nearly 120 USD per barrel to 60 USD per barrel and even 40. Some suggestions have been made that it may come down to even 20, which I believe is unlikely. However, it may possibly hover between USD 40-USD 60 per barrel. But one never knows. US stimulus money without any backing was being used to prop up the price of oil and other commodities.
For the time being, it appears that fracking for oil and gas, a very dubious harmful and very greedy method of producing energy without taking into account long-term ill effects, which is the policy of neo-capitalism, has been given a welcome suspension if not death for the time being. There have been agitations against fracking all over America, even in Canada, England and elsewhere.
However, fight for search, production and routes for transport of petroleum or gas would continue to dominate the world strategic balance and disturbances. These were brought about in greater Middle East and North Africa after the catastrophic policies followed by US and dutifully backed by British poodle, while the military-industrial complex and energy sector in the West has gained. But USA and Europe are no longer the power they were before 2003. UK has become a standing joke.
It may be recalled that one of the major objectives of the Marshall plan was to make Europe change from use of coal for energy to oil, which had been discovered in Middle East, which were under the tutelage of London and Washington .Thus Europe became indebted to USA and UK because of diversion from coal for energy and industry. In the process research into clean use of coal was probably retarded.
It is before WWII that Washington and Riyadh signed agreements to be a part defence alliance. Saudi Arabia provides its immense energy resources and Washington and London provide military protection to Saudi Arabia and other Gulf states. As has been brought out London decided to divide India for reasons including one of not allowing an independent nonaligned India any direct linkages with USSR, not even across the Wakhan corridor.
USA has exploited ruthlessly its status of dollar as the reserve currency, without which it is bankrupt .Now many countries, including even China, Saudi Arabia and others have interest in keeping the dollar steady as sudden decline would bring about unintended consequences for the world economy. Interlinked economies have become like a worldwide casino, in which USA has control over chips which it can increase or decrease. Mostly with these chips it is making money i.e. from those who have to keep dollars because of its being as reserve currency and bilateral trade settlements.
But slowly many countries especially from the Brics and even others have started using their own currencies for bilateral trade .New International development banks are being created to counter the World Bank and International monetary fund. Last year some reports had suggested that the dollar will come under severe strain in the middle of 2015.
According to reports, the Federal Reserve is thinking of finally levying interest rate by minimum amount increase which will lead to withdrawal of some of the Trillion 3 dollars stimulus gurgling around stock exchanges all around the world.
Another lifetime strategic development to consider is the emergence and acceptance of Iran as a major regional power by U.S.-led West, even Moscow, much to the discomfort of Saudi Arabia. China needs energy from Iran as does India and if Pakistan can be pacified then Iran can provide much of all the energy needs which India requires.
It was a foolish decision on the part of Prime Minister MMSingh to vote against Iran in Vienna and send the case to United Nations. There is little point in babbling about civilisation similarities when you hurt Tehran in their time of distress. New Delhi did not even extract a good price since US was interested in squeezing Iran .Apart from photo-ops which Indians love with white leaders ,India got a unfair indo-us nuclear deal . NDA was rightly opposed to it.
China is courting Iran for its energy needs and as a big new market for supply of military hardware and other goods for which you will soon find US, EU nations, Russia, China and others competing. Once the sanctions are relaxed or removed Iran will add one to two million bpd, which will go into keeping the oil prices down, even if Saudi Arabia cuts down its oil production .Good news for India and lucky BJP.
Riyadh is in a real quandary. They are worried about the ISIL fighters, an organisation which was openly and surreptitiously created by USA, NATO powers, including Turkey, Jordan and Gulf states led by Riyadh and which now controls parts of Syria and Iraq in adjoining Eastern provinces of Saudi Arabia, which has Shia majority and big part of total of Saudi energy reserves. It is unlikely that USA will let Saudi Arabia down.
The problems lie within with restive young population not part of the thousands of princes corporation called Saudi Arabia Inco .But US is not likely to provide troops, as decorated Marine Col Murtha had said that the American army was broken in Iraq , never mind immense and brutal destruction brought to that country.
An apprehensive Saudi Arabia does not even trust most of its tribes to be the soldiers in its army. It is really worried and according to media reports wanted Pakistan to provide some brigades on it’s on the border between Iraq and Saudi Arabia. For a decade Pak troops were stationed in Saudi Arabia after 1979 Shia revolution in Iran .Reportedly Nawaz Sharif has declined for the time being.
Riyadh is also worried that sooner or later, Iran will have nukes and the balance in the Gulf will go in its favour. There were reports nearly 10 years ago in German media that Saudi Arabia, which had given huge grant for the development of nuclear bombs to Pakistan might even have a few of them somewhere in Saudi Arabia itself. In any case, at some stage, it may ask Islamabad to pay for all the assistance Riyadh has given.
But Pakistan itself in a very sorry state of affairs. There is very little point in India being gleeful about it. The hell fire raging in Pakistan has been created of course, with full support from Pakistani leaders and rulers, with military and financial support from the US led West, Saudi Arabia and even China. It has completely broken down .Pakistan terror apart from spilling over into India can also pose dangers to China through training of Uighur terrorists in Pakistan and Afghanistan.
In a fanciful future world, there can be energy pipelines, from Iran to India via Pakistan and Central Asia to India via Afghanistan and Pakistan. If all Asian powers, beginning with Russia, China, India and later on, Japan come together, Pakistan may even build energy corridors. China, has already suggested an industrial corridor through Park occupied Kashmir and Pakistan, which will ultimately lead to Baluchistan port of Gwadar.
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|Liaquat Ali Khan|