- The Washington Times - Friday, March 31, 2000

Much ado is made of coercive monopolies and price-fixing schemes except when it comes to the OPEC oil cartel. That this organization explicitly, openly and contemptuously works to squeeze the world's energy consumers seems to strike next to no one as particularly wrong let alone anything the United States government should try to do anything about.

And so we sit back as the oil barons, ensconced in luxury hotels, quarrel over how best to milk the nations of the world for their benefit. Crude oil prices have more than tripled since this time last year crashing through $34 per barrel last week. Almost all of this is the result of a deliberate cutback in oil production engineered by OPEC of some 4 million barrels per day. The cutback was designed solely to boost the revenue of OPEC member states and fits the definition of "price-fixing" exactly.

Industry analysts say it will take an immediate boost in production of at least 2 million barrels per day to prevent the price of a gallon of unleaded from cruising past the $2 mark by June. So the announcement on Wednesday that OPEC would boost production by 1.7 million barrels a day is indisputably good news. This should help to stabilize prices within 4-6 weeks. We have our erstwhile Gulf War allies Saudi Arabia and Kuwait to thank for the gesture. Other OPEC members states, however, were not pleased. Iran, specifically, denounced the production increase. So did Iraq.

While the immediate crisis appears to be resolving itself, there's still the matter of OPEC the cartel to consider. But OPEC is not subject to U.S. antitrust law, you say? True enough. Yet there are means of exerting pressure available to us and certainly it is not unreasonable to avail ourselves of any tool at our disposal to thwart what is, let's be clear, a conscious effort to rip us off as much as possible. This time, the emir of Kuwait and the Saudi ruling family got the message courtesy of some phone politicking by U.S. Energy Secretary Bill Richardson. But what about the next time?

It's worth pointing out that Saudi Arabia, by itself, has the capacity to pump a heady 11 million barrels of crude per day but it only pumps 7.8 million barrels per day by choice. In other words, Saudi Arabia, all by itself, has the ability to end the current shortfall indeed, to have prevented it in the first place. But until pressured by the United States and apparently shamed by the obvious ingratitude its actions implied the oil-rich state declined to do so. For at least the past year, the Saudi ruling family seemed more concerned about its bottom line and even demonstrating solidarity with the mullahs in Iran and other partners in OPEC than coming to the aid of the country that kept Saddam Hussein from enjoying the amenities of the royal palace at Riyadh.

We now import more than 50 percent of our oil up from 30 percent at the beginning of the 1973 OPEC oil embargo. And still we keep whistling past the graveyard. Not only do we need to apply pressure to countries that are allegedly our allies, but we need also to develop alternatives sources of oil production here at home. It's time to quit letting OPEC have its way with us. The Democrats at least realized that going into an election with this kind of gasoline price gouging occurring is to invite disaster. But is anyone out there in the Republican congressional leadership interested in listening?

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