Stop invading countries, get cheaper petrol prices

How much more expensive is petrol in the post-Iraq invasion environment? I have not studied the matter in any sort of detail, but it certainly seems to have risen by a large amount. It has led to bureaucratic interventions such as the “Petrol Commissioner”, and the ACCC has been given greater powers.

But there’s a better way to bring down petrol prices – stop invading other nations. Congressman Ron Paul explains how an interventionist foreign policy affects gas prices in his Texas Straight Talk:

‘Especially since the War on Terror and the PATRIOT Act, many oil-producing nations and banks are concerned the US government may freeze assets based on flimsy pretexts. This fear contributes to dollar weakness, and therefore also high oil prices…’

16 thoughts on “Stop invading countries, get cheaper petrol prices

  1. This is a far more reasonable post Sukrit.

    However, I think it tries to put to much blame on a single cause. I think this is simplisitc.

    Why is oil and fuel (“gas”, “petrol”) so expensive? Here’s what I can rattle off the top of my head:

    1. Increased demand from BRIC economies.

    2. Long term effects of restrictive exploration laws and Saudi supply differences with OPEC (essentially oversupply), thus less exploration since early 1980s.

    3. The impact of Hurricane Katrina.

    4. The imapct of ongoing British labour disputes.

    5. The impact of the ongoing unrest and strategic control of Nigerian wells.

    6. The War in Iraq which has seen Iraqi oil exports plummet.

    7. Continued aggravation of Israel by a belligerent Iran leading to fears of Israeli airpower being deployed on Iranian strategic assets.

    8. USD quotations in the context of slow growth, massive financial restructuring and excessive and cheap credit and money.

    9. Excessive taxation of fuel, income, sales and resource rents here (and in the US).

  2. The recent increases of course have many causes but nevertheless oil prices will continue to increase in the long term, simply because its a non-renewable resource. Given this I think all other arguments are really unnecessary to the bigger issue. And well.. don’t look at me for an original solution.

    It’s one of the reason why I’m not really against a more environmentally conscious (yet freedom focused)society which moves aware consumers away from non-renewable sources. The power of the consumer is so underplayed these days.

    It does strike me as funny though that prices have increased as a result of the Iraq invasion considering the “no blood for oil” stickers being handed out by ‘Green-Left’ crazies at Uni, maybe I’ll bring it up to them.

  3. I have not studied the matter in any sort of detail

    Well i have.

    The run up in oil prices was caused by a declining dollar, vigorous growth in emerging countries such as China, India etc, an OPEC that is keen to maximise their oil revenues to keep their population frmo rioting, a failing of oil supply to keep up with demand, and rising costs in the extraction of oil.

    The recent $55 drop in oil has been caused by fears that global growth will slow significantly over the coming years.

    Sukrit – your posts are getting more and more absurd. They are based on no knowledge whatsoever, sourcing wackos such as Rothbard and Seymour Hersh (i eagerly await your next oracle – Noam Chomsky? Al Gore?), taking quotes from Obama and Palin massively out of context, and a hatred of the US that would make your average member of the Revolutionary Workers’ Council blush.

    Get a grip, man.

  4. Good on you, Sookey! Keep up these intelligent posts! There are too many Americophiles here! Sure, it gets some things right, and the Constitution seemed to start out alright, except they needed to put in admentments, so it turns out the original text wasn’t perfect.
    Australia also isn’t perfect, or this post wouldn’t exist. Indeed, Libertarians hope to create a better country and constitution in the future.
    These posts of yours can highlight areas to think about. Even when I disagree, I am forced to articulate why I disagree, and that clarifies my own thinking.

  5. Oil’s dropped back a bit atm… I think we got a ways to go to peak oil yet, but we might get there artificially early if the greenies keep it locked up.

  6. In addition to Pommys list I also think the overly strengthening (deflationary) US dollar of the late 1990s probably supressed some exploration incentive.

    For a superpower concerned with it’s force projection capability the price of oil is probably of less military concern than diversity and certainty of supply.

  7. Sukrit:

    Have you become totally unhinged? Get yourself checked out. I’m still eagerly awaiting your next piece arguing that the US government flew the planes into the buildings in order to attack the middle east for it oil.

  8. Rothbard is a perfectly good source for information. And Chomsky can be good on some issues too.

    Both are Americans. So if you don’t like them, then I can only assume you’re anti-American. 🙂

    It’s perfectly reasonable to point out that war leads to instability which can lead to higher prices in some areas.

    Anyway — Sukrit’s posts are perfectly legitimate for a libertarian blog (which also includes plenty of people who support massively interventionist socialist foreign policy — so we do have balance) so let’s just stick to the arguments and stop the attacks on Sukrit.

  9. John H

    For fuck sake., he’s now trying to find a relationship with higher oil prices and US intervention in the middle east when none exist. Other than Iran, no Middle East country has threatened to move away from the dollar for setting oil prices. There has been a shift away from the dollars in reserves management due to US economic circumstances. However to suggest this has happened because the US invaded Iraq does not equate with reality.

    Sukrit hates the US for some reason and continues spewing his bile. He now finds comfort with the Ron Paul wing of the libertarian movement who try to blame their troubled miserable lives on monetary mismanagement/government conspiracy thing. You end up here and you also end up in close agreement with the league of rights people who see a monetary conspiracy under every bed. The kid’s an idiot.

  10. so let’s just stick to the arguments

    Temujin – indeed. Mark has made numerous (patient and polite) requests to Sukrit to explain his increasingly bizarre posts. still waiting….

  11. Pommy — I wasn’t responding to Mark’s comments. I was responding to the “sukrit is an wacky idiot” theme.

    JC — It is a well known fact that increased political instability leads to a higher risk premium for doing business. That can drive up costs. Sukrit didn’t invent this idea.

  12. American oil companies are doing quite well as a result of the price, but they do have costs like the war’s impact on infrastructure in the Iraq region.
    Given the Bush connection to oil, what costs the US government (ie Iraq war) also costs US oil companies. So there is some cost link but it is also the ability to put the price up because they can as a part of the war for profit schemata.

    So there is your answer, a million dead Iraqis (including future infant mortality in the region from depleted uranium) have been added to to the cost of Australian petrol. Rather then Australians being able to buy Australian oil products at local rates.

    Next question..

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