It's all About the Oil

The so-called "War on Terrorism" has so far none nothing to alleviate the constant threat of international and domestic terrorism, but has always been about the geo-politics and logistics of the oil economy. At the forefront of this oil-base war against Afghanistan are the major international petroleum companies, most notably ExxonMobil and Unocal, and the Commander-in-Chief himself, Mr. George W. Bush.

Recent documents unearthed by our research staff provide irrefutable proof that the war against Afghanistan had been planned as early as three years ago and that even without the World Trade Center/Pentagon bombings the attack would have been carried out anyway. It is abundantly clear that Afghanistan is to be a central route through which Central Asian oil is to be pumped to Asian markets by U.S. oil interests.

Ever since the fall of the former Soviet Union ten years ago, ExxonMobil, Chevron, Unocal and the other big oil monopolies have been scheming to get their hands on the vast oil and gas wealth around the Caspian Sea, just north of Afghanistan. This region's oil reserves may reach more than 60 billion barrels - enough to service Europe's oil needs for 11 years. Some estimates are as high as 200 billion barrels. The Caspian Sea reserves are 10 percent of the world's known supply - worth about $5 trillion at today's prices.

Having a government in Afghanistan that is beholden to U.S. interests, along with stationing U.S. troops in the former Soviet Republics of Kazakhstan, Uzbekistan, and Turkmenistan, would secure the region and allow this project to proceed. And just in time, as far as the U.S. oil companies are concerned, because there is international competition for the Caspian Sea oil resources.

In his testimony before the U.S. House Committee on International Relations on Feb. 12, 1998, John J. Maresca, vice president, international relations of Unocal Corp., emphasized the need that Unocal and other oil concerns have for multiple pipeline routes for Central Asian oil and gas. He also expressed the need for U.S. support for international and regional efforts to achieve "balanced and lasting political settlements within Russia, other newly independent states and in Afghanistan," as well as the need for "structured assistance to encourage economic reforms and the development of appropriate investment climates in the region." By "appropriate investment climates," he means putting the existing political infrastructure in Afghanistan in its place through brute force of U.S. military might - so that oil will be able to flow freely through the region.

Mr. Maresca pointed out that the Taliban and other governmental structures in the region make the Unocal's dream of building a central pipeline through Afghanistan virtually impossible. He strongly hints that Congress should authorize the U.S. military to "do something" about this "problem." Keep in mind that his testimony was made when Bill Clinton was in office. Clinton was embroiled in his own share of political and personal scandals at the time and the last thing his administration needed was yet another black eye in the form of a phony war against Afghanistan. This is why an obscure governor from Texas named George W. Bush, whose family are billionaires in the oil business, was tabbed to be the next U.S. president. It is also why a Mr. Dick Cheny was singled out for the post of vice president since he has vast experience as an engineer working with international oil development.

To achieve the coveted access to these oil-thirsty Asian markets, Mr. Maresca proposes building a "Silk Road" through Afghanistan through the force of military arms while acknowledging that such a task is "far from simple.

The risks are high, but so are the rewards," he states. Indeed.

Tellingly, Mr. Maresca told Congress in his 1998 address, "One obvious potential route south would be across Iran. However, this option is foreclosed for American companies because of U.S. sanctions legislation. The only other possible route option is across Afghanistan, which has its own unique challenges.

"The country has been involved in bitter warfare for almost two decades. The territory across which the pipeline would extend is controlled by the Taliban, an Islamic movement that is not recognized as a government by most other nations. From the outset, we have made it clear that construction of our proposed pipeline cannot begin until a recognized government is in place that has the confidence of governments, lenders and our company.

"In spite of this, a route through Afghanistan appears to be the best option with the fewest technical obstacles. It is the shortest route to the sea and has relatively favorable terrain for a pipeline. The route through Afghanistan is the one that would bring Central Asian oil closest to Asian markets and thus would be the cheapest in terms of transporting the oil."

He added, "Unocal envisions the creation of a Central Asian Oil Pipeline Consortium. The pipeline would become an integral part of a regional oil pipeline system that will utilize and gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia." Very interesting indeed. Perhaps this explains the profound relative strength in Russia's stock market over the past year. It makes perfect sense when one considers the amount of U.S. capital that is pumped into Russia's markets on almost a daily basis (most of it from New York). When the oil factor is thrown into the equation it sheds even more illumination on the puzzle.

The U.S. has it's own oil reserves, and does not need to rely on oil from abroad. However, Europe, Japan and Asia are dependent on oil from the Middle East (oil that is controlled by U.S. and British companies) and they are eager for alternative and cheaper sources. The continuous U.S. bombing of Iraq has kept oil prices high enough to make construction of a U.S.-owned pipeline seem possible. The profits to be made from controlling the flow of oil are the issue at stake in "America's new war".

And the new war couldn't have come at a better time from the perspective of oil company profits. The rate of change in future anticipated profits for leading oil company ExxonMobil (XOM) has exploded in recent weeks as manifest in the stock price for XOM. Insider buying around $33-$36 is extremely visible on the tape and XOM's dominant cycles are still in the ascending phase. All of this portends higher stock prices for XOM, and this in turn augurs improving corporate profits. The insiders who control's the market for XOM stock like what they see on the horizon. The same could also be said for Texaco and Conoco, among other smaller petroleum concerns.

So regardless of what the mainstream press proclaims in the days and weeks ahead concerning America's "War on Terrorism," remember this: It's really all about the oil.