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A lot of Iranian and Venezuelan oil is not being sold on world markets. Many times it's sold at a discount to curry favor with a particular nation. Forbes mag had an article how Cuba sends indentured doctors to Venezuela to minister to the masses of the poor who love them. In return Castro gets 100,000 barrels of oil a day from Venezuela.

We get our oil from the freely traded markets while China's lining up long term supplies under contract. Yesterday Iran abrogated a contract with India that was selling them oil a t $31/barrel

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Oil and gas are playing a growing role in world politics. Oil has become the lifeline of the modern industrialized society. The West has grown increasingly dependent upon the oil of the Third World countries. Russia has also become a very important supplier of gas to the Western European countries. As developing countries (like China and India) develop heir economies, their need for oil is also rapidly growing. They are trying to secure supply for their growing needs. This is leading to increasing competition for the existing resources. This is also giving more power to the oil-producing countries.

We have seen how Venezuela is gaining more clout in South America. Hugo Chavez has used oil as a very powerful leverage to advance his political goals. He has become one of the leading political figures in South America. He has used the oil money to oppose the policies of traditional globalization. He has spent the oil money for social welfare programs, and has shared the oil wealth with the poor people of the country. Evo Morales, the newly elected president of Bolivia, wants to follow footsteps of Hugo Chavez.

Oil has also played a very important role in the Middle East politics. Iran and Iraq are very good examples. Iran has become more and more defiant as its share of the Middle East Oil has grown. Both China and India have signed long-term oil deals with Iran for billions of dollars. It will be very difficult for China and India to vote against Iran. Iran is buying billions of dollars worth of arms from Russia. It has deals to develop nuclear energy with Russia. It will be very difficult for the Western countries to impose sanctions on Iran in the Security Council. Russia and China can veto any resolution against Iran.

Iran can cut back on its oil production and that can increase the prices of crude oil, which can jack up the prices of oil. This increase in the price of crude oil can hurt the western economies, which have become more and more dependent upon the Middle East oil. The terrorists have also learned to use oil as a weapon. They have attacked oil installations in Iraq and disrupted the oil production and supply. This has led to deepening of the crisis in Iraq and has led to an erosion of authority of the pro-American government. This is also leading to instability and anarchy in Iraq and may eventually lead to civil war and disintegration of Iraq.

In another example of oil playing a role in the world affairs is the visit of the Saudi King Abdullah to China and India. The Saudi king knows that China and India are going to become two of the biggest customers of the Saudi oil. China became the first country the king visited. After China, the king went to India where he was the chief guest at the Republic Day celebration in India.

Russia has found out that its vast energy resources are a powerful tool in pursuing its diplomatic objectives. Russia is increasingly flexing its energy muscle. A few years ago, Russia's economy was on the verge of collapse. But now, thanks to the growing demand for gas and oil, Russia has surplus budget. This newfound economic strength has revived Russia's desire to regain the status of an important player in world affairs. Russia has put pressure on its neighbors to reconsider their pro-Western stand. Russia, together with China, is trying to balance the influence of the Western powers. Russia traditionally has always had very close relations with India. A closer relationship between Russia and China will act as a big impetus for improved relations between India and China. Eventually, a grand alliance between Russia, China and India may lead to a new world order, where relations between the West and the East are more balanced.

It was the greed of the oil companies, which prevented any alternative source of energy for oil. It has made the whole world more dependent on oil. This has not only had serious political implications but also has compounded the environmental damage and global warming. Alternative sources of energy can be developed which will cause much less damage to the environment and in the long run, can also be cheaper. However, as long as we are governed by the traditional globalization, the welfare of humanity will not become the topmost priority. The traditional globalization has actually encouraged its opponents and achieved exactly the opposite results to what it intended.

Remember President Reagan with cajones???

Following the September 21 raid, Iran amassed 60 gunboats and directed the flotilla toward Khafji, a Saudi-Kuwaiti oil facility. The USS La Salle, flagship of Rear Admiral Harold Bernsen, commander of the U.S. Navy Middle East Force, moved to intercept the gunboats, which turned back after being buzzed by Saudi warplanes. Another encounter involved an Iranian warship that locked fire control radar on a USN destroyer, the Kidd; warned off by the Kidd's skipper, the Iranian ship sailed away. Then, on October 8, Iranian gunboats fired at a U.S. Army helicopter, missing the target but attracting the attention of two U.S. AH-6 gunship choppers, which sank one of the gunboats and damaged two others. Iran responded by firing Silkworm missiles at the U.S.-owned Liberian supertanker Sungari and the reflagged Kuwaiti tanker Sea Isle City, damaging both vessels. There were no fatalities, though the American skipper of the Sea Isle City, Captain John Hunt, was blinded.
Few doubted the U.S. would retaliate. Two weeks later, four U.S. destroyers fired over one thousand rounds of 5-in. shells into Iran's Rashadat oil-loading platforms in the Persian Gulf -- after giving the platform crews twenty minutes to evacuate. Ninety minutes of continuous shelling left the platforms smoldering ruins; SEAL commando teams exploded the pilings and sent the rubble plunging into the sea. The Iranians answered by firing another Silkworm at Sea Island, Kuwait's deep-water oil-loading facility, destroying the loading dock. "We're not going to have a war with Iran," said President Reagan. "They're not that stupid." But it certainly seemed as though an undeclared war was already underway. A public opinion poll revealed that while 68% of Americans expected a "military exchange" between the U.S. and Iran, 60% were in favor of stronger retaliatory action against the Iranians.
The situation remained tense throughout the winter, but not until April 1988 did violence erupt once again in the Persian Gulf. Ten seamen were injured when the USN frigate Samuel B. Roberts struck an Iranian mine on April 14. Being careful to consult with Congress this time, President Reagan ordered a retaliatory strike against two Iranian oil platforms in the southern gulf -- platforms that served as bases for Iran's intelligence service. While one platform was shelled by the frigates Simpson and Bagley, Marines helicoptered to the second, seized it, planted explosive charges, and destroyed it. A few minutes later, the Simpson sank an Iranian patrol boat that had fired a missile at the USN guided-missile cruiser Wainwright. (The Wainwright defended itself by dispensing aluminum chaff in the air, which deflected the missile.) Meanwhile, near the Strait of Hormuz, two Iranian frigates and several gunboats were sunk by American warships and an F-14 Tomcat from the aircraft carrier USS Enterprise. During the day-long battle, a Cobra helicopter carrying two American crewmen was shot down by the Iranians.
This defeat at sea, coupled with grave setbacks in the land war with Iraq, persuaded Iranian leaders to seek improved relations with the West. The Ayatollah Khomeini agreed with Hashemi Rafsanjani, Speaker of the Iranian Parliament, on the need to pursue a new foreign policy that would defuse tensions in the Persian Gulf. As for the United States, its resolve in the gulf in 1987-88 improved its standing with allies, not only in the Middle East but also around the world.