The Oil Cartel Murders

This summer’s record drought/heat wave in the US provides cover for another banker-engineered spike in commodity prices, including crude oil. Those same corporations that funded a comprehensive campaign to attack the science behind climate change, will once again reap the windfall from climate change. Lacking serious antitrust action against the Four Horsemen (Exxon Mobil, Chevron Texaco, BP Amoco & Royal Dutch/Shell) and a crackdown on speculators, this veiled Federal Reserve cartel attempt to reflate the global economy while enriching their member bankers will continue unabated. (Excerpted from Chapter 7: The Four Horsemen: Big Oil & Their Bankers…) The first known attempt by the oil trust to stifle competition came in 1928 when Sir John Cadman of BP, Sir Henry Deterding of RD/Shell, Walter Teagle of Exxon and William Mellon of Gulf met at Cadman’s castle near Achnacarry, Scotland. Here an agreement was reached which would divide up the world’s oil reserves and markets. The Achnacarry Agreement became known to oil industry insiders as the As Is Agreement because its aim was to maintain a status quo under which the Four Horsemen controlled the world’s oil through market share agreements, sharing of refining and storage facilities, and by agreeing to limit production to keep prices high. [263] Big Oil signed three more agreements in the next six years. The 1930 Memorandum of Understanding for European Markets was followed by the 1932 Heads of Agreement for Distribution and the 1934 Draft Memorandum of Principles. Between 1931 and 1933 the Four Horsemen ruthlessly cut the price for East Texas crude from $.98/barrel to $.10/barrel. Many Texas wildcatters were run out of business. Those that remained were forced to agree to strict production quotas under threat of ruin by the majors, quotas that still exist today. They serve to keep the US dependent on Persian Gulf oil, where Big Oil dominates, and to keep at bay independent challenges to their hegemony. They also put thousands of US oil workers out of jobs in Texas and Louisiana. During World War II the Four Horsemen showed their true colors when Exxon and Texaco collaborated with the Nazi I.G. Farben combine to provide oil to Hitler’s military machine. Sir Henry Deterding, who ran RD/Shell, was even more overt in his support of the Nazis. After the war the Four Horsemen focused on the Middle East, where the cartel operated under the names Iranian Consortium, Iraqi Petroleum Company and ARAMCO. With the rise of OPEC as a producer cartel, the companies devised increasingly sophisticated ways to diminish OPEC’s collective bargaining ability. Nationalistic governments were destabilized, discredited and overthrown by the CIA at the behest of Big Oil. Henry Kissinger set up his International Energy Agency, which the French called a machine de guerre. Nixon’s Twin Pillars Policy and Reagan’s GCC were both efforts to divide OPEC between wealthy banker nations and poor industrializing nations, with the Saudis playing the key role of swing producer in both schemes. As oil trader George Perk once commented of the Four Horsemen/Saudi relationship, “The oil markets are not free markets. Oil company officials bribe officials in Saudi Arabia. They only get into the market for a fix.” Following the Gulf War Jordan’s King Hussein commented of the Saudi role in diminishing OPEC’s bargaining power, “At the grassroots level, long-submerged feelings of resentment on the part of most Arabs toward the Saudis are now out of the bottle. We resent the fact that they buy everything – technology, protection, ideas, people, respectability… the Arab people are saying that the US and Saudi Arabia are indistinguishable, and from this they conclude that the Saudis are backing Israel. Have the Saudis no shame?” OPEC emerged from the 1973 embargo determined to craft regional solutions which would lessen its dependence on the West in obtaining hard currencies necessary to function in the global economy. The 1972 Arab Summit in Khartoum, Sudan, which ended the first war between North and South Yemen, called on the rich Gulf State sheikdoms to divert their Western-bound petrodollars into development schemes for poor nations. The industrializing OPEC price hawks formed the Steadfastness and Confrontation Front which consisted of Iraq, Libya, Algeria, South Yemen, the PLO and Syria. OPEC issued The Solemn Declaration which called for a more just and equitable New International Economic Order. This led to the Conference on International Economic Cooperation in Paris, where 19 developing countries from the G-77 met with their G-7 counterparts to discuss creating a more just global economic landscape. OPEC leader Algeria led a political bloc at the conference called the Non-Aligned South Solidarity Movement, which advocated a trickling down of OPEC oil wealth to developing nations. But Kissinger’s IEA showed up in Paris demanding that the conference focus solely on energy, with no linkage to the larger question of global economic injustice. The IEA is dominated by the international bankers, who deplore the idea of OPEC petrodollars helping the world’s poor. The bankers want this vast pool of money plowed back into their Western piggy banks, spent on US military hardware and made available for the CIA covert operations which protect their multinationals. The Steadfastness and Confrontation Front met in Damascus in 1979 to plot a strategy to stop the Camp David Peace Accords between Israel and Egypt, which the Saudis and the US were firmly backing. The price hawks knew that Israel served Four Horsemen interests in the region. They feared further division within OPEC if this first Arab peace treaty with Israel was signed. But the US offered Egypt massive military aid and the Accords were signed following an intensive US effort led by former Bechtel executive Philip Habib. The Accords, coupled with the creation of the GCC in 1981, accomplished the goals of Kissinger’s machine de guerre. To add insult to injury, the very next year the IMF was officially created. The IMF serves as enforcer and collection agency for the international bankers whom Kissinger represents by pressuring Third World debtor nations to open their economies to multinational corporations owned by their banks. Already usurping OPEC oil wealth, which the G-77 envisioned being utilized for Third World development, the bankers now had the audacity to loan these petrodollars to the South at exorbitant interest rates, plunging poor nations into a bottomless cycle of debt. Most of these loans go to set up tax-free multinational operations or end up in the pockets of these countries’ elites, who then make off with the cash through BCCI-like vessels. Workers of the Third World are left responsible for paying back debt from money they never even received. Venezuelan President Carlos Andres Perez once called this IMF smoke and mirrors routine, “economic totalitarianism”. In 2001, when the Argentine government was forced to default on $132 billion it “owed” the bankers because the IMF canceled a bailout package when Argentina refused to accept its draconian terms, the country’s Minister of Finance Domingo Cavallo called the IMF “international vampires”. [264] Cavallo resigned, as did a succession of four Presidents who refused to play the IMF’s rigged game. A more recent Four Horsemen trick has been to increase oil production in non-OPEC nations. In 1990 Exxon Mobil obtained 29% of its US-bound crude from Angola, 16% from Oman and 16% from Columbia. RD/Shell purchased 19% of its US-bound oil from Mexico and 17% from Yemen. Chevron Texaco got 26% of its US stock from Mexico. None of these nations are OPEC members. [265] A recent study by the American Petroleum Institute stated that non-OPEC production growth since 1980 has eroded OPEC market influence. The 1984 North Sea oil discoveries by Norway and Britain further weakened the bargaining power of OPEC’s industrializing price hawks. Norway and Britain became net exporters of crude, using that leverage to drive world oil prices lower. The OPEC nations of Venezuela, Iraq, Indonesia and Nigeria are particularly dependent on high crude prices because oil provides a large percentage of their total exports. In Indonesia two Presidents have been ousted since the 1999 devaluation of the rupiah thrust the world’s fourth most populous nation into an extended period of civil unrest and economic meltdown. A December 28, 1998 article in Business Week detailed Mobil’s massive oilfields and petrochemical facilities in the troubled Aceh region of North Sumatra. Indonesian troops under the direction of President Suharto, whom the CIA installed after their 1964 John Hull-led coup, overthrew the nationalist Sukarno government and massacred protesters right next to the Mobil facilities. It was a moment of historical continuity. In 1882 Aceh tribesman had attacked RD/Shell headquarters in the very same region. The Dutch colonial government put down the rebellion in similarly brutish fashion. Indonesia was made an economic basket case when a consortium of US banks led by Citibank began dumping money into the lap of General Ibnu Sutowo, Suharto’s right-hand man who controlled the purse strings at Pertamina, the state oil company. Sowoto squandered the loot on pal