Venezuela and Iran team up
Well, this certainly isn't a good sign:
Venezuela and Iran are forging closer oil ties in hopes of reducing their dependence on the United States, inking a $4 billion deal to develop a block of the lucrative Orinoco Reserve in Venezuela.
According to Venezuelan Oil and Energy Minister Rafael Ramirez, production at the Ayacucho 7 block should begin in two years.
The block is believed to hold more than 30 billion barrels of oil, making it one of the largest in the country.
A recent statement by Venezuela`s state-run oil firm PDVSA said Iran will build four oil rigs offshore Venezuela by the end of the year.
That's 30 billion barrels of oil which will either be off limits to the US market or will come with draconian strings attached. Bank on it.
This is a consequence of the Bush administration's refusal to hold talks with Iran and Venezuela on a variety of topics. Bush's myopic insistence on casting the world as a binary, us/them, black/white, good/evil Hobbesian see-saw is just as surely a failure in the oil game as it has been in all other instances of its application by this White House.
This may be just the beginning of the toxic consequences of the Bush years:
In an effort to wean themselves and other nations off U.S. petrodollars and its aid, Venezuela and Iran announced at the beginning of the year they would create a multibillion-dollar fund to help finance projects in countries that traditionally rely mainly on U.S. funding.
By migrating away from the dollar as the de facto currency of the oil trade, Iran and Venezuela are firing the first shots in what may be a long, ugly, and protracted economic war. The global oil trade is now conducted entirely in US dollars, which gives the dollar much of its global force as the main currency of international commerce. If oil-producing countries deliberately move away from the dollar as the currency of trade, the international value of the dollar will erode, US enterprises will become much less appealing to foreign investors, and the economic influence of the US will wane. This will inevitably cause the internal wealth inside the US to drop in value.
We've already squandered most of our international prestige since 2003; we can't afford to lose any more of it, nor can we afford to let Bush's short-sightedness compromise our internal economic prosperity.
This latest move may turn out to be small potatoes, but it sets the stage for other oil-producing countries to follow suit. Bush imperils our future by simplistically labeling Iran part of the "axis of evil," and he endangers our economy by writing off Chavez as merely a tin-pot dictator.
Sadly, both Bush and Ahmedinijad are pandering to their respective bases; neither is particularly powerful on his own, but with their respective fundamentalist bases of support riled up, they gain power. There's a hair's breadth of difference between them. They're both just playing domestic politics, ignorant of the international consequences.
Chavez is no longer the wild card he was a couple of years ago; it's now completely obvious he's intent on becoming another Latin American "President For Life," and he's gone a long way toward fulfilling the tin-pot caricature of him drawn by the White House (although I did think his "stench of sulfur" line at the UN was pretty dang funny).
We cannot afford much more of an administration hell-bent on isolating us from the rest of the world, determined to caricature everyone else just to please its narrow, chauvinistic, small-minded base. Larger issues loom, and it's high time the adults took charge to address them.