International Information Programs
Office of Research Issue Focus Foreign Media Reaction

October 7, 2004

October 7, 2004





**  The "surge in oil prices" will negatively affect both economic growth and inflation.

**  Nigerian outlets assail "illegal oil bunkering" as a "national embarrassment."

**  China is now a "major economic player" in the world oil market. 

**  Outlets push for both energy conservation and alternative sources. 




'Great impact on the global economy'--  Dailies expressed concern that "continuously climbing" oil prices will "disturb the world economy."  Japan's business-oriented Nihon Keizai warned that expensive oil will "accelerate inflationary pressure and undermine economic growth."  However, several papers acknowledged that the world's economy "has proven surprisingly resilient despite the cost of oil"; Hong Kong's independent South China Morning Post said that oil prices at the current level "will not stop the global recovery," though "inflationary pressures" may increase.  Blaming "speculative trading" for the surge in prices, several writers demanded international cooperation to stabilize markets.


'A geopolitical quagmire'--  Observers held "global geopolitical tension" ranging from instability in the Middle East and Venezuela to the "ongoing financial crisis with Russia's oil giant Yukos" responsible for hikes in oil prices.  Many outlets noted the rebel threats aimed against oil companies in Nigeria.  Nigerian papers dubbed these rebels "predatory gangs" who are launching a "tide of armed gangsterism."  Other Nigerian dailies lamented the "economic sabotage" of oil smuggling that, as the independent Daily Champion asserted, "attacks the nerve center of Nigeria's economy."  Britain's conservative Times urged all oil producers to "use their wealth to create sustainable growth" and thus maintain stability.


'China's thirst' is pushing oil supplies 'to its limits'--  Commentators cited the "soaring oil demand" in India and especially China to explain the rise in oil prices.  "The real reason" for the surge, held India's centrist Navbharat Times, is the "huge increase in demand" that stems from "rapid economic growth in China and India."  Chinese papers backed Beijing's decision to establish oil reserves to "cope with its economic development and growing strength"; the official China Daily suggested that Beijing "increase the strategic resource reserves, such as oil reserves," because it and the U.S. are now the world's "two major oil consumers."


'Adopt energy conservation as a high priority'--  Editorialists backed measures to reduce demand for oil.  Japanese papers urged the U.S. to "renew its undertaking for energy conservation" and the world "to accelerate their energy-saving efforts."  Dailies stressed the need to "apply good-practice existing technology more widely," citing "alternative energy sources such as ultra-heavy oil and liquefied coal."  South Korea's independent Joong-Ang Ilbo promoted nuclear energy as a way to be "more energy-efficient."  Kenya's independent Nation advised Nairobi to "harness and exploit alternative, more environmentally friendly and certainly cheaper sources of energy" to avoid the "vagaries of the oil market." 


Prepared by Media Reaction Branch (202) 203-7888,


EDITOR:  Ben Goldberg


EDITOR'S NOTE:  Media Reaction reporting conveys the spectrum of foreign press sentiment.  Posts select commentary to provide a representative picture of local editorial opinion.  Some commentary is taken directly from the Internet.  This report summarizes and interprets foreign editorial opinion and does not necessarily reflect the views of the U.S. Government.  This analysis was based on 37 reports from 16 countries over  24 September - 6 October 2004.  Editorial excerpts are listed from the most recent date.




BRITAIN:  "Crude Shock:  OPEC Countries Must Not Spend It All At Once"


An editorial in the conservative Times read (9/29):  "The U.S., Britain and Norway have absorbed oil wealth without surrendering to oil dependence, but few developing countries have managed the same trick, tending instead to squander their cyclical bonanzas on lavish infrastructure projects that generate as much popular resentment as gratitude; or leaders simply embezzle the funds--offshore oil ends up in offshore accounts....  The challenge facing oil exporters is to use their wealth to create sustainable growth that will outlive their oil. Meeting such a challenge usually requires the discipline engendered by having no oil in the first place, but the alternative is a very bumpy transition to whatever follows the age of oil."


"Higher Oil Prices Are Just What We Need"


Associate Editor Hamish McRae commented in the center-left Independent (9/29):  "The most favourable outcome [to higher oil prices] would be for the present high price of energy to encourage the biggest users, the U.S. and China, to adopt energy conservation as a high priority.  Were they do to so, they would have the oil market on their side.  Markets do work even if they sometimes do so in capricious and unpredictable ways.  In the short-term all that can be done is to apply good-practice existing technology more widely.  The higher price should certainly encourage everyone--businesses of course but also public sector agencies and consumers--to do that....  In the longer-term the future prosperity of the world will depend on the next technology that comes along behind oil.  We simply do not know what that will be.  What we do know is, that as coal was displaced by oil, so oil will be displaced by something else."


FRANCE:  "An Ominous Note"


Right-of-center Les Echos editorialized (9/28):  "If the prices stay as high as they are it will have an impact on the economy. It will take at least a year to recover from the consequences of the current prices....  A sword of Damocles hangs over the year 2005."


GERMANY:  "False Analysis"


Torsten Riecke said in business-oriented Handelsblatt of Duesseldorf (9/30):  "The oil market is one of the most transparent markets in the world.  It is right that speculators are taking advantage of the current situation.  But they are riding on this price wave as surfers do on real waves.  The real driving force behind the increase in prices are large-scale investment funds that hedge their portfolios against the implications of high oil prices.  It is not a lack of transparency, but an increase in the risks for the economy and companies that are driving oil prices....  That is why the G-7 finance ministers should not try to influence the oil price with a few cosmetic corrections.  In the short term, nothing can be changed. That is why it is all the more important that the large industrialized countries eliminate the imbalances in the global economy.  The IMF presented a recipe to do this:  America must eliminate its vast budget deficit and the deficits in its balance of payments.  And Europe and Japan should finally balance their domestic demand.  If the global economy has straighten itself out again, it can also withstand a new oil price shock."


"Africa's Oil--Africa's Crisis"


Michael Bitalla opined in center-left Sueddeutsche Zeitung of Munich (9/30):  "The unrest in Niger is as old as the exploration of oil in the delta of the Niger River.  And the latest unrest has by no means reached the degree it had last year.  That is why the reaction of the markets surprising....  The feeling of uncertainty among oil traders is so great because the significance of Africa's oil has drastically increased.  The U.S. in particular plans to increase its oil quota from Africa from 15 to 25 percent.  And African oil has only advantages.  It contains less sulphur and can easily be reprocessed.  And the sea routes from Africa to the United States are only half as long as the ones from the Gulf....  By exploring and producing oil, the African continent could easily resolve its most serious problems...but oil exploration has rather intensified problems.  In Nigeria per capita income has declined from 800 to 300 dollars...and the same is true for the second biggest exporter, Angola....  In view of its raw material the African continent is faced with a similar debacle like during the Cold War.  At that time, neither the West nor the East took care of democracy human rights, or market economy as long as the despots stood on the right side.  In the new struggle for Africa, it is now not the right way of thinking but mineral resources, and this struggle will intensify in the coming years.  Even if the oil companies would commit themselves not to producing oil in corrupt countries, companies would then certainly get the license."


"Oil Prices"


Center-right Thueringer Allgemeine of Erfurt observed (9/29):  "The threat of Nigerian rebels against oil companies was the final straw that shocked the world.  Everybody was nervous anyway because of the attacks against Iraqi pipelines, the conflicts between the Russian government and Yukos and the negative repercussions of the hurricane in the Gulf of Mexico.  China's thirst also pushed Opec's capacity to its limits.  None of these causes will go away.   China and India will require more and more oil, as billions of people want to drive cars.  Those who save energy will win the international competition."




Center-right Frankfurter Allgemeine argued (9/28):  "The U.S. government has now declared its willingness to release part of the strategic oil reserve.  But it is not President Bush and Energy Secretary Abraham's goal to push down the high oil prices at the global markets.  They are only interested in overcoming bottlenecks...caused by the most recent hurricanes along the Gulf coast.  Nevertheless, with this initiative, the Americans' attention is directed to one aspect that has played a role in the presidential election campaign for months:  America's enormous dependence on oil, primarily from the Gulf region....  The voters are not interested in the reasons for this increase in prices; they want cheap gas and heating oil.  But neither Bush nor Kerry can offer a convincing energy policy."


ITALY:  "Oil Prices Soar: 50 Dollars Per Barrel"


Centrist, top-circulation Corriere della Sera held (9/28):  "In addition to the sabotage of Iraqi pipelines, the surge in oil prices can be attributed to new signs of global geopolitical tension, beginning with the escalation of violence in Nigeria--the world’s fifth leading oil producer--whose militia has announced ‘total war’ against the government starting October 1....  In Russia, the continuing tug-of-war between the government and Yukos is causing instability in oil supplies....  G-9 leaders in Washington on Friday for the annual meeting of the IMF and World Bank are increasingly concerned about the effects oil will have on economic growth and inflation. This sense of alarm is also felt in Italy and has resulted in an increase in oil prices.”


"Political, Not Economic"


Influential, left-leaning La Repubblica declared (9/28):  "The reasons for the current high oil prices are more political than economic....  Factors contributing to it include the crisis in Nigeria, where rebels are threatening oil concerns Shell and Agip, the ongoing attacks on Iraq’s oil pipelines and the insecurity in Saudi Arabia. On top of those geopolitical factors...are the hurricanes which have damaged off-shore oil production in the Golf of Mexico and the ongoing financial crisis with Russia’s oil giant Yukos....  All of this compounds historically high levels of oil consumption and the imminent arrival of winter."


RUSSIA:  "Price Of The Issue"


Natalia Gevorkyan observed in reformist business-oriented Kommersant (9/29):  "The outcome of the November presidential election in the U.S. is the political price of current games in the world oil market.  Paradoxically, the interests of a collective bin Laden correspond to the interests of all those who are not interested in unilateral strengthening of the U.S.' positions in the world.  The latter include, in particular, respected members of the G-8 group, who have not joined the coalition, which means have not obtained their piece of the oil pie in the Middle East.  Moreover, they have lost what they used to have. Naturally, oil price hikes have also dealt a blow to them, but they have an explanation for their electors: we have nothing to do with that, you should lay claims to America which has been bogged down in Iraq and unable to start normal oil production there....  This is an unlucky coincidence a month before the presidential election in the U.S.  Naturally, the U.S. is not Spain where train explosions were enough to change power in the country. Substantially more powerful levers and bigger resources are required for playing games on the domestic political ground of the world's biggest power.  Perhaps, the most serious ones such as oil."




QATAR:  "The World Can Live With High Oil Prices"


The semi-official English-language Gulf Times declared (9/30):  "OPEC believes that there is already a surplus of 2mn barrels a day on international markets, making it futile to try to increase the supply in an effort to bring prices down....  However, experts agree that OPEC's ability to produce additional oil is limited, with only Saudi Arabia having excess capacity....  The price surge that has taken place in recent weeks is a result, on the one hand, of strong global demand and the expectation that will continue, and on the other of worries about the reliability of the supply. Key issues in the last few days have been the threat to oil production in Nigeria, the loss of supply because of a spate of hurricanes hitting the Gulf of Mexico, the political and financial problems plaguing Russia’s Yukos, the worsening situation in Iraq and, to a lesser extent, uncertainty over Venezuela’s political prospects.  In part, the problem is the result of a disastrous mistake by Washington’s 'neo-conservatives' some of whom dreamed that the occupation of Iraq would drive oil prices down to the lowest possible levels. Instead, Iraqi output has been cut....  This unusual collection of concerns about many of the world’s main oil producing areas has convinced speculators that the price can only rise further....  The global recovery has proven surprisingly resilient despite the cost of oil....  It may be that the energy price has shifted permanently to a higher level as a result of a fundamental change in the supply/demand equation. If so, it will be painful for the world to adjust but it can do so and, if necessary, it will. Higher prices will also encourage the development of more difficult reserves....  The current price is unusual but, when adjusted for inflation, it is still below the highs reached in the 1970s and 1980s."




CHINA:  "Crisis Looms Due To Weak Dollar"


Jiang Ruiping said in the official English-language China Daily (9/28):  "Many international institutions and renowned scholars have recently warned that the possibility of a US dollar slump is increasing and may even lead to a new round of 'U.S. dollar crisis.'  Since China holds huge amounts of US-dollar-denominated foreign exchange reserves, the authorities should consider taking prompt measures to ward off possible risks.  It is still too early to conclude if the US dollar is heading towards a crisis. But it is an indisputable fact that it has gone down continually. Its rate against the euro, for example, has dropped by 40 per cent since its peak period and it lost 20 per cent of its value against the euro last year alone.  It is becoming more and more evident that the possibility of a further slump of the US dollar is increasing....  Given the deteriorating relations between the U.S. and the Arab world, quite a few Middle Eastern oil-exporting countries have begun to increase the proportion of the euro used in international settlement. Reportedly Russia is also going to follow suit.  If an 'oil euro' is to play an ever increasing role in international trade, the U.S. dollar will suffer.  In China's case, its rapidly increasing foreign exchange reserve will incur substantial losses if the U.S. dollar continues to weaken....  The high concentration of China's foreign exchange reserve in US dollars may also incur losses and bring risks....  Besides, investing most of its foreign exchange reserves in US treasury bonds also holds great political risks.  To ward off foreign exchange risks, China needs to readjust the current structure, increasing the proportion of the euro in its foreign exchange reserves.  Considering the improving Sino-Japanese trade relations, more Japanese yen may also become an option....  China could also encourage its enterprises to 'go global' to weaken its dependence on US treasury bonds.  And using U.S. assets to increase the strategic resource reserves, such as oil reserves, could be another alternative.”


"Why Doesn’t The U.S. Use Its Oil Reserves"


Li Changhong wondered in official international Global Times (Huanqiu Shibao) (9/24):  “Behind the highfalutin excuses [for not using oil reserves], the Bush administration, which represents the oil monsters’ interests, is taking advantage of high oil prices to let the oil monsters reap enormous profits....  This is undoubtedly the reason that the Bush administration has repeatedly refused to use oil reserves.  Not only not using oil reserves, but the Bush administration even has added to the oil reserves by 100,000 barrels a day....  Such behavior can only ‘add fuel to the fire’ at a time when world oil prices are continuously climbing.  In fact, if and when the Bush administration wants to use oil reserves...other Western countries will have to respond.  International oil prices will drop accordingly and meanwhile at the same time this would exert pressure on OPEC and send a warning to international oil speculators....  Certainly, although this would be beneficial for the growth of the world economy, to require that President Bush, who has built a career on oil, to make such a decision will in no doubt prove fruitless.”


CHINA (HONG KONG SAR):  "Threat From Oil Prices Must Be Taken Seriously"


The independent English-language South China Morning Post editorialized (10/4):  "If the higher oil prices are, as some of the economic chieftains of the world assure us, a short-term phenomenon, the damage may be limited to temporarily narrower margins for the transport companies and other businesses that rely on oil.  For the average consumer, there is no sign yet that higher costs will be passed on; and for wider economies, the inflationary pressures that could materialize are also some way off.  That is the reassuring part.  The less comforting news is that uncertainty about supply is expected to continue, and spare capacity is at a record low.  Meanwhile, demand in economies such as the U.S. and the mainland shows no signs of easing, and speculators are thought to be more active in the futures markets than before, contributing to the recent record prices....  The concerns over next year's oil price levels are valid.  Current growth assumptions such as the IMF's are based on an oil price of less than U.S.$40 per barrel.  We are now still far from repeating the energy and stagflation crises of the 1970s.  But the next several weeks will tell whether the market finds a new equilibrium and where that equilibrium is.  If it is much higher than US$50, we should expect to see next year's growth assumptions revised downwards.  Oil prices remaining at these levels well into next year will not stop the global recovery, but they do represent some potential roadblocks.  Consumer buying and confidence could take a hit, and the danger is that rising interest rates called in to fight oil-induced inflation will deal the fatal blow.  If the IMF's measures for heading off a growth-derailing oil crunch are to work, they have to be implemented soon."


"Preparing For The Worst"


Mass-circulation Chinese-language Oriental Daily News noted (10/4):  "Oil prices continue to rocket, causing a great impact on the global economy.  During last week's meeting of the G7, financial chiefs also expressed their concern.  They issued a joint statement saying that the outlook of the global economy was still good.  The soaring oil prices, however, had created risk for economic growth....  If oil prices continued to soar, this would put pressure on Hong Kong's economic growth."


"Don't Exaggerate Impact Of Oil Prices; Saving Energy Is The Best Option"


Independent Chinese-language Ming Pao Daily News said (10/3):  "Oil prices have surged to U.S.$50 per barrel.  Because of this, the Asian Development Bank has lowered economic growth estimates for Asian countries.  There has been much discussion on how high oil prices will affect the U.S. and Hong Kong economies.  We believe that the soaring oil prices will definitely slow down economic growth.  The impact, however, will not be serious.  According to Asian Development Bank estimates, the soaring oil prices may last for seven quarters.  Hong Kong is projected to have 5% economic growth next year, with no more than 2% inflation.  The oil crisis of the 1970s will not repeat itself.  Hong Kong political and business circles should think about how to save energy and improve the efficiency of energy use." 


"Indirect Impacts Of Oil Prices Will Be Bigger"


Independent Chinese-language Hong Kong Economic Times commented (9/29):  "People are most worried about the impacts of high oil prices on the U.S. which is strong in appearance but weak in reality.  The first impart is that the U.S. Federal Reserve said the risk of inflation was medium when it raised the interest rates this month.  It means that the risk is not big, thus the pace of interest rates increase will progress gradually.  However, the surge of oil prices will heighten the risk of inflation.  It may compel the Federal Reserve to quicken its pace of the interest rates increase.  The economic growth will be under pressure.  The second impact is that the surge of oil prices is tantamount to imposing oil taxes.  The U.S. is the number one oil consumption country.  It has to pay the heaviest 'tax.'  U.S. consumers have spent all their force.  The growth of consumption is mainly due to the tax cut and the low interest rates which push the property prices up.  Now interest rates have begun to rise and the tax cut has been over.  Thus, the soaring oil prices will hinder spending....  The U.S. is the locomotive of the global economy.  If the locomotive breaks down, the whole world's economy including Hong Kong will have to suffer."


"High Oil Prices Will Not Tip Over The Economy"


Pro-PRC Chinese-language Ta Kung Pao remarked (9/29):  "There is no doubt that the recovery of global economy and the booming Chinese economy have stimulated oil demands and intensified the tense situation in the international market.  Nevertheless, there is no serious shortage of supply.  OPEC will also increase production to cope with the increasing demands.  Judging from the basic factors, the soaring of oil prices will not last long.  And due to domestic and geopolitics considerations, the U.S. has to suppress oil prices and it will not allow the soaring oil prices to disturb the world economy and affect the U.S. presidential election.  Hence, the U.S. has already decided to use its strategic oil reserve and its allies, such as Saudi Arabia, have promised to increase production.  In brief, it seems that the fluctuation of oil prices is due largely to speculation.  It is anticipated that the situation will continue to last for some times."


"Establish Oil Reserves; Fluctuating Oil Prices Disturb China"


Independent Chinese-language Hong Kong Economic Journal observed (9/28):  "Some analysts believe that the surge in oil prices is more or less due to market speculation.  In other words, these record high oil prices are being caused by 'man-made factors.'  The fundamental reasons for the high oil prices, however, are rising global demand for oil and restricted supply from oil producing countries.  High oil prices may therefore become a long-term phenomenon....  Countries with oil reserves maintain that the reserves should not be easily tapped.  When Bill Clinton was the U.S. President, he triggered strong domestic debates by using U.S. oil reserves to combat record high oil prices.  Thus if China establishes oil reserves, it should not use them to adjust oil prices.  Instead, the reserves should be used only in case of emergency such as war, which could lead to sanctions or the cutting off of oil supplies.  China has become a big economy and now plays an important role in the international arena.  Its establishment of oil reserves is therefore a move to cope with its economic development and growing strength....  China observed that fluctuations in the oil market following last year's U.S. invasion of Iraq did not affect Japan, which has maintained oil reserves for thirty years.  Since establishing such reserves will take time, China's internal consumption, trade and investment will still be affected by high oil prices in the short run."


JAPAN:  "Oil Prices Should Be Curbed By International Cooperation"


Top-circulation moderate Yomiuri urged (9/30):  "The surge in oil prices would deal a severe blow to the U.S. and China, the two major oil consumers in the world.  We expect G-7 finance ministers to send out a clear message to market players that they should stop speculative trading but instead regain stability in the market.  The structural change in global oil supply and demand has partly caused recent record-high oil prices.  Rapid economic growth in China and India has boosted global oil consumption and major oil-producing countries and major oil companies have remained extremely cautious about the increase in oil production since the nightmarish price drop in 1999.  In addition to the deteriorating situation in the Middle East, the lack of investment in oil field development caused the recent hike in oil prices.  It may be time for us to explore alternative energy sources such as ultra-heavy oil and liquefied coal.  However, in the short run, oil-consuming nations need to accelerate their energy-saving efforts.  We hope the upcoming G-7 talks would serve as an opportunity to advance such efforts."


"Consumer Nations Must Act"


Liberal Asahi editorialized (9/29):  "The global economy has been reinforced by expanded consumption in the U.S. and China's economic development, both of which are vulnerable to rising oil prices.  As their economies have begun to already slow, the surge in oil prices would deal a blow to the two economic giants.  In an upcoming financial ministerial in Washington, G-7 ministers must jointly ask OPEC and other oil-rich states to increase their oil production.  The U.S. must also make extra efforts to bring stability to the Middle East....  The U.S. must also renew its undertaking for energy conservation by curbing oil demands through a hike in gasoline tax and by augmenting strategic petroleum reserve."   


"Rising Oil Prices Casting Dark Shadow Over Global Economy"


Business-oriented Nihon Keizai argued (9/29):  "We cannot overlook negative effects on the global economy from the continuing rise in oil prices, because the latest surge is likely to accelerate inflationary pressure and undermine economic growth.  Ministers from G-7 nations and China are expected to meet in Washington shortly to coordinate policies for sustainable growth.  Because China has become a major economic player in terms of energy consumption, the upcoming gathering will become a great opportunity to discuss measures how to deal with the oil crisis."


INDONESIA:  "Dilemma Of Oil"


Muslim-intellectual Republika averred (10/1):  "On the one hand, for some countries in the Middle East and Brunei, the oil price increase has clearly been extremely advantageous....  The increase has become a disaster for oil importing countries, such as China, South Korea, Japan, Malaysia, the Philippines, Singapore, Thailand, and Indonesia. It is worried that the continued increase of the oil price will affect the growths of Asian economies which have been good recently."


"Oil Price Rages"


Bandung-based Pikiran Rakyat maintained (9/30):  "The threats of Nigerian militants to sabotage foreign oil companies in the country have pressured the oil price to quickly increase up to 50.47 US dollars per barrel....  Such an increase has not been surprising....  Not surprising because in the last three years world politics and security have indeed been extremely unstable due to the war on terrorism sponsored by the US and Britain. Western unilateralism has made the world more insecure."


MALAYSIA:  "Price Increases"


The editorial of independent, Chinese-language Oriental Daily News read (10/4):  "The rise in petrol, diesel and gas prices at the beginning of October has already triggered price increases in several goods and services relating to transportation trade.  Among them are the hiking fees of school bus fares for children, which have affected most families....  While the Consumer Affairs Ministry said it will monitor and regulate the prices of some controlled items, the fact remains that when the transportation cost has increased, it would be better for the government to develop a free market competition system so that the supply and demand of goods can be regulated gradually.   This would be a better government policy instead of controlling the prices of essential goods.   In this way, all businesses can then learn to survive during this oil crisis."


"It Is Not Proper For Consumers To Expect Subsidies"


Leading government-influenced Berita Harian opined (10/2):  "Due to the surging demand for oil as winter is drawing close, world oil prices have risen to over $50 per barrel.  Worse still, the crisis in Iraq have finally compelled the Malaysian Government to raise petroleum prices....  We are actually more fortunate when compared to prices elsewhere....  The continued subsidies from the government means it might have to reduce spending on development sectors and projects for people's well-being.  In reality, the government should not transfer allocations from important sectors.  Taking such matter into consideration, Najib reminded consumers not to focus on the five sen increase in oil price, but on the government's loss in taxes, the government subsidies that are too heavy and may jeopardize the country's budget.  In reality, consumers in Malaysia are still fortunate compared to vehicle owners in Singapore, Thailand and other countries.  The low rates of petroleum prices here have made consumers from the two neighboring countries fill their tanks in our border areas."


SOUTH KOREA:  "New Energy Strategy Needed"


Independent Joong-Ang Ilbo declared (10/4):  "Hurricane damage in the southeastern U.S., renewed security fears in Nigeria and a host of other factors have caused crude oil futures to rise sharply....  Oil prices might drop briefly, but we can't expect prices to fall to the levels we knew in the past....  We can't stress enough the effect of oil price increases on the economy.  Oil price hikes are fatal to factory operations and business management, and lead directly to a rise in consumer prices.  High oil prices discourage people from spending and influence nearly all fields, including exports and economic growth.  In short, life gets tougher for everyone....  Korea imports most of its energy resources, so we must hurry with our preparations to soften the blows caused by a world of high oil prices.   We must restructure our industries to become more energy-efficient and implement new energy-saving policies....  It is only thanks to nuclear energy that we are not suffering from a shortage of energy.  The government must work harder to convince the public of the necessity of nuclear energy.  It must also encourage voluntary participation in saving energy.  We must also work to diversify our energy imports and develop alternative energy sources.  The government and the oil industry should not repeat their old habit of kicking up a fuss when the oil prices rise, then quickly forgetting about the matter....  The future of our country depends on how efficiently we adjust to the era of high oil prices."


INDIA:  "Oil Prices Skyrocket"


The influential centrist Hindi-language Navbharat Times held (9/30):  "International crude oil prices have touched a record high.   But neither is there any report of the economy being affected by the hike, nor is there any sign of worry.  Perhaps the world has become capable of withstanding rising trends in the oil prices, or it has accepted the inevitable in the absence of any alternative....  But economists have started predicting global depression.  Instability in West Asia, political instability in Nigeria, their effect on the U.S. production and the problem in Iraq are said to have caused shortages in oil supply.  Increasing demand for oil in the fast developing country China and India's growing economy are also responsible....  The real reason is due to the huge increase in demand....  What makes matters worse is that the prices are unlikely to be brought under control in view of the crisis in Iraq and the U.S. presidential elections.  The oil market is under tremendous pressure....  The 25 EU countries consume one-fifth of the world's supply.   It would, therefore, be more practical to work out a system of fixing the oil price....  Regardless of the reasons for the price hike and whatever method is used for deciding the oil prices, the government must ensure that the consumers are not adversely affected by it."




NIGERIA:  "The Challenge From Niger Delta"


The Abuja-based independent Daily Trust observed (10/6):  "Originating in classic guerrilla fashion as small bands in the rural areas, these hoi polloi fragmenting into predatory gangs, have smartly anchored their rebellion in resource control and self determination as answers to their prolonged immiseration, exploitation and state neglect, a clever mask for their real ideological essence which is rent seeking.  These insurgency groups are, therefore, correctly speaking, rascals but it is the Nigerian state that has given them opportunity....  Every section of the country may not have oil or strategic cities through which it can shut down the country or bring the government to a humiliating negotiation but once this model of getting an ethnic group into power becomes a fad, nothing would stop the invention of impeccable reasons for that.  Dialogue is always welcome but kid gloves can be dangerous." 


"Dialogue, Not War"


The Lagos-based independent Comet concluded (10/6):  "The spate of armed insurrection in the Niger Delta reached a head last week with Asari Dokubo giving an ultimatum to the Federal Government, and asking for the ejection of foreign oil companies and the transfer of the control of oil resources to the Niger Delta people, failing which he would blow up oil installations and seize oil fields....  In reaction to this development, President Olusegun Obasanjo made a spirited effort to stem the tide of armed gangsterism in the Niger-Delta and restore the confidence of the international community in his ability to control the situation....  What the Niger Delta insurgency implies is that the country is confronted with well defined problems and the way to resolve them is not through war but peaceful means." 


"So-called Rebels"


Olusegun Adeniyi wrote in the independent Lagos-based This Day (9/30):  "Because Americans love oil, the other god beside dollars, it is not surprising that a news item from Nigeria has become a major staple for all the local television networks....  It has helped to push the prices of crude oil to an all-time high of $50 per barrel....  The news that 'some rebel groups in oil producer Nigeria have declared war on the federal government'....  From my understanding of the situation, this so-called rebel group may be no more than some bandits who feed fat on the tragedy of the Niger Delta people by encouraging violence which in turn help to fuel their illegal oil bunkering so I know the situation back home cannot be as bad as it is being painted here....  But I am also aware there are deep-rooted problems at home....  Nigeria remains a very poor nation despite our enormous endowment and potentials as well as the capacity of our people....  What we have been subsidizing for years are corruption, weak governance, rent seeking and plunder and we cannot continue on that road....  How do we address the growing poverty in which we cannot even feed ourselves?....  We do not need the coming anarchy. It should be averted."


"The Missing M. T. African Pride"


The Lagos-based independent Daily Champion maintained (9/28):  "The M. T. African Pride, an oil vessel which was arrested for illegal oil bunkering in Nigeria's territorial waters, disappeared recently in mysterious circumstances. The disappearing act remains a national embarrassment.  But beyond this, the development raises questions which critically border on national security....  On August 17 last year, the Navy impounded the DWT tanker reportedly laden with 15,000 barrels of crude oil. Also impounded about the same time, for similar offence were five other ships....  The apprehension of the ships had seemed a remarkable development. Over time, illegal oil bunkering has become a thriving enterprise in the country...that attacks the nerve center of Nigeria's economy. These unholy alliances exploit the weaknesses of the country's surveillance and control systems, then use vessels and manpower from outside to cart away their loot. Without doubt, illegal oil bunkering requires powerful local forces to pull the strings and execute this lucrative act in economic sabotage.  Unfortunately over the years those involved in the illegal oil business seemed to be above the law. More often than not, the perpetrators of the business go away free while the government continues to lose large sums of its revenue....  No wonder the business of illegal oil bunkering has been booming.  The arrest of M.T.Africa Pride had seemed both a major hit on the bandits and a loud statement that government is truly on the trail of the criminals.  The embarrassing disappearance of the detained ship is in itself a negation of this hope....  The reputation of the government and indeed that of the nation is at stake....  Even between the Navy and the Nigerian National Petroleum Corporation (NNPC), there is still a dispute over the exact quantity of crude oil the missing ship was carrying. The Navy said the vessel had 15,000 barrels of oil as at the time it was arrested. The NNPC said only 6,700 barrels of oil....  The case of M.T.Africa Pride must not be swept under the carpet. Everything must be done to unravel this national embarassment."


"Missing MT African Pride As National Shame!"


The Lagos-based pro-labor independent Vanguard concluded (9/28):  "It was a bemused nation that was greeted with the news of a missing vessel, MT African Pride, last month. The vessel had earlier been arrested by men of the Nigerian Navy for engaging in illegal bunkering in the nation's coastal waters.  It was reported that about 15,000 barrels of crude oil estimated at N20 billion were found....  It is, therefore, baffling that the ship disappeared after its arrest....  Maintenance has since turned into disappearance.  We consider this entire saga a national shame. The allegations and counter allegations will lead to nowhere. What we know is that it is the duty of the Nigerian Navy to protect and administer the goings-on on the Nigerian waters. And this includes vessels or ships operating thereon....  The Nigerian Navy has an explanation to offer Nigerians for the disappearance of MT African Pride from the Nigerian coastal waters.  Everything points to top flight conspiracy by high ranking government officials. Bunkering is not a trade for the poor. The powerful and influential are the ones who engage in it....  A government that professes to fight corruption must do everything to get to the root of this national shame. A ship is not a needle in a hay stack to disappear like that. Saboteurs behind this ignoble act should be searched for, apprehended and sanctioned in accordance with the laws of the land."


KENYA:  "Lessons From Rising Oil Prices"


The independent Nation declared (10/3):  "With oil prices having soared as high as they have done, and with no immediate prospect of any relief, it must have been heartening to hear that President Kibaki is trying to negotiate a deal with Saudi Arabia to cushion Kenya against the high prices....  However, let nobody think that we are out of the woods on this issue yet. There is always the possibility that the deal could fall through or even be rejected by the Saudis....  Basically, in the long run, what countries such as Kenya will have to do to save themselves from being constantly bludgeoned by the vagaries of the oil market is to harness and exploit alternative, more environmentally friendly and certainly cheaper sources of energy....  The reality on the ground is that almost all our energy needs are oil related and oil prices will be getting more expensive before they get cheaper....  It is feared that food prices, and the cost of manufactured goods could also rise because of higher energy and so will transport costs....  It would seem that oil prices will remain high as long as the security situation in Iraq, and more recently in Nigeria (Africa's largest producer), continues to be of concern....  In the final analysis, unless we strike oil or find some way to get really cheap oil for use in our economy, the solution will lie in actively pursuing alternative sources of energy."




CANADA:  "Oil Hits A Perfect Storm"


David Olive concluded in the liberal Toronto Star (10/2):  "With each dramatic leap in the world oil price, North Americans...have reason to worry: Are we on the brink of another energy crisis, with unsettling implications for runaway inflation and stalled economic growth?  Will we have to embrace disruptive changes in both consumer behaviour and industrial use of scarce energy resources?  While there's no easy answer to those questions, the smart bet is not to fret about the short-term impact of this week's historic rise in the world oil price....  There is ample reason to take seriously the longer-term implications for energy security....  The most recent price run-up has the earmarks of an anomaly, a perfect storm of threats by Nigerian rebels to disrupt production, damage to Gulf of Mexico rigs from Hurricane Ivan, continuing sabotage of Iraqi oil installations and a traditional low in U.S. oil inventories....  And all that comes against the backdrop of soaring oil demand from the world's two fastest-growing economies, China and India....  The longer-term outlook is more troubling....  Even at its somewhat less dynamic economic growth rate forecast for next year, China is destined for decades to have a near-insatiable appetite for oil....  Even moderate sustained increases in Chinese and Indian demand will put tremendous pressure on the world supply structure.  Most troubling, though, is the factor of political risk....  The dilemma is that today's biggest discoveries, and the bulk of global production, are tilting toward regions notable for varying degrees of political instability....  In short, the global industry is gradually evolving into a geopolitical quagmire, pitting industrial-nation consumers against peasant farmers whose lives are disrupted by oil rigs and pipelines without any significant benefit apart from the occasional Western-built clinic, school or summer camp....  Long before the world runs out of oil, disputes escalating into warfare over the ownership of oil reserves and the benefits accruing from them will make supply disruptions commonplace....  The Nigerian rebels' warning this week was directed not so much at the regime in Lagos as the rest of us, as we enter a long struggle over the morally legitimate ownership of the world's oil wealth, and how to deal with the unequal sharing of its blessings."


VENEZUELA:  "Venezuela: The Booming Times Are Back"


Alfredo Toro Hardy commented in leading conservative El Universal (9/30):  "All the indices seem to indicate that Venezuela is on the threshold of booming times.  Besides experiencing the highest economic growth in the region over this year, a number of structural reasons announce a sustained period of high oil prices and of important investments in the energy sector.  First, most specialists think that the oil prices will remain high over the next four years.  Second, we can now find a gap between the rise in the oil consumption and the accelerated decline in the level of the reserves.  Third, new sources of oil are not being found.  Fourth, the lack of new sources prompts an adequate development if the existing reserves.  Fifth, the bituminous oil and gas reserves become vital areas of development.  Sixth, in addition to the 78 billion barrels of oil in conventional reserves, Venezuela has the world's sixth largest gas reserves.  Seventh, the world press and international oil companies increasingly turn their attention towards Venezuela's hydrocarbon reserves.  Eighth, the impact of high oil prices anticipates an important and sustained period of economic growth. Ninth, this economic growth will inevitably come along with the strengthening of Venezuela's geo-strategic position."


"A Large Gas Station"


Alexander Guerrero E. wrote in leading conservative El Universal (9/30):  "The evidence in these years of high oil prices shows an intense decline in the investment in the oil sector and a loss of private capitals in the non-oil sector of Venezuela.  This has the socioeconomic impact of a new million people unemployed and another million underemployed people in the informal market.  The loss of capital in the non-oil sector has reached such levels of gravity that the markets' perception, also evident in the economic and political relations, is that Venezuela is only an oil-producing country and that's all, which is a grotesque economic degradation.  This is the reason why our neighbors see us a large gas station, regularly visited by ships and airplanes to fill up their tanks.  To some extent, this is what the diplomatic corps credited in Caracas reflects."



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