A bracing walk through Vienna with Mr Opec

03 June 2009

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Tom Bower talks to Ali al-Naimi, the Saudi oil minister, at Opec’s meeting and is struck by how this master manipulator escapes censure in the great oil blame game

One year ago, in his familiar search for a favourable photo opportunity, Brown had dashed to Jeddah to confront al-Naimi for failing to curb the speculators. Blaming the Saudis for profiteering by deliberately limiting oil supplies, Brown demanded they pump more oil. Al-Naimi knew there was no oil shortage. Dozens of tankers in the Persian Gulf were laden with Saudi sour crude but could find no customers. There was a bottleneck in the refineries. Then Brown jetted to Aberdeen to blame the oil companies for the decline of production in the North Sea. For their part, the North Sea operators blamed Brown’s crippling taxes for deterring their search for new oil. Having exposed his ignorance about the matrix of independent but interconnecting criteria now determining oil prices, Action Man returned to London, universally derided for being trapped in the 1970s.

Absurdly, that is where much of public sentiment remains stuck. Oil arouses mistrust, yet, while most people are ignoring al-Naimi’s potent plot, they have focused on a courthouse not far from New York’s mercantile exchange, the centre of oil speculation. Shell is being sued for contributing to the death of Ken Saro-Wiwa, the Nigerian activist, hanged in 1995 after campaigning against Shell’s environmental damage in his native Ogoniland. In reality, Saro-Wiwa’s challenge was directed against General Sani Abacha, a corrupt dictator. Nigeria’s federal government was refusing to give even 1 per cent of the proceeds of Ogoni oil back to the tribe. Shell’s straitjacketed refusal to intercede in the power struggle and rigged trial was self-destructive. ‘It is not for commercial organisations like Shell,’ said a company spokesman in 1995, ‘to interfere in the legal process of a sovereign state such as Nigeria.’ Whether Shell could have persuaded Abacha not to murder Saro-Wiwa is debatable, but it was Abacha and not Shell who killed the poet.

Oil is a tough business and the prejudices rarely change. The contrast between the blunt opprobrium heaped on Shell and al-Naimi’s silky, secretive manipulation suggests that in the blame game the Saudis, unlike Shell, can count on escaping censure. Back in Riyadh, al-Naimi has reported to the King, ‘Mission Accomplished’.

The Squeeze: oil, money and greed in the 21st-century by Tom Bower will be published in October.

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PJ Bliss

June 8th, 2009 6:49am Report this comment

It is hard to find such honesty about OPEC's determination to push up the oil price. The oil price/exploration nexus is hard to justify. The price of natural gas is at a historic low but huge funds are pouring into development of costly gas shales.

As to the glut of oil, Shell, I believe it was, tried to sell a tanker full of crude last week and found no buyers. With futures dealers taking delivery and storing the oil in tankers (contango) and total storage capacity full to overflowing price will become more difficult to hold up in a fairly short time.

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