Oct 07, 2022 Letters
I hate to be the bearer of bad news, but Guyanese are in for more pain. This would be at the pump, the market, the stores, and wherever business is conducted, and goods and services have to be purchased. OPEC+ just took away 2 million barrels of oil from global supply. How things have changed, how longstanding relationships come under stress, and how the players realign themselves and further their own interests.
Expectation of a million barrels of oil being taken off the supply table had already caused deep concern across the globe, already reeling from climate change, coronavirus, and Russian adventurism, with an emphasis on the latter’s “special military operation” in Ukraine. I thought that one million barrels removed from an already tight supply chain was it, that was pleaded against futilely. There was no reception in the OPEC+ community, probably none ever harboured. Now, the world has to deal with the effects of two million barrels gone from daily supply.
China and India had already positioned themselves nicely in the precarious oil equation. Now, as oil price rises, most likely somewhere north of US$100, which increasingly looks like favoured baseline, both China and India will likely not be as severely affected as others. The wishes and hopes of America (larger West) were largely ignored in that supply reduction, plus the press for price caps on Russian fossil fuel output just ran into a roadblock. It is said that politics is war by other means, and the Russians manifested they are as good in the politics game, as any in the West.
Though fears lurk about a ‘hot war’ between adversaries, what has been playing out is more of the ebb and flow of a major economic battle for supremacy. Oil is key, and the oil weapon has been unsheathed remorselessly. In the middle of the hostilities between warring parties, a pain in the pancreas for places like Guyana, there is some lining amid the grim. I think of the grim first.
The PPP/C Government did commendably with fuel prices, regardless if overdue, or preemptive. But the OPEC+ cut just dented a hole in that 20 percent slash, more than overturned it; and it will be around for the next six months. Without the supply cut, ordinary Guyanese were already complaining that the benefits of the local price cut were not being experienced by them. I am sorry to report more rough weather for them, all of us. The pain is starting. Given that wrenching supply move, there is sure to be severe dislocation in lives globally; struggling, besieged Guyanese unspared. I anticipate that everything from bread to buses to banga-mary to bake and saltfish (and most other products) just crushed last week’s prices.
As said at the beginning, Guyana has opportunity, some room to maneuver and retable this country’s case, while planting feet immovably. ‘Leaders’ feet, that is. And that is, if they have the guts to go for the jugular. Tersely, Guyana’s current low six-figure contribution to the oil pool just assumed increasing weight. It can’t be at the same rate per pound; saying barrel or gallon is unnecessary since all understand. The Saudis grinned and bore their humiliation for decades, while they chafed under an unacceptably uneven oil relationship with monopolizing Americans. They turned the tables with full nationalization decades back, and now twist the knife, using OPEC+ as cover. To be straight, it is not the politics of revenge, but the politics of economics. In other words, business only, by seizing strategic openings and leveraging. Biden is dismissed, and America’s adversaries lead the way. Frankly, America and Europe suddenly find themselves being the humbled wearers of the other shoe.
Given circumstances, Guyana has its own chance to play hardball with Exxon. It either wants this oil on our terms, or packs its bags. Exxon was ruthless with its rackets in using Venezuela to beat us silly. Now, it is Guyana’s turn. We want more for our oil. Better terms, better returns, better and better in every area of that dastardly contract. As an American, I hate to say it, but must. America is not Guyana’s friend, but its own best friend. Leaders in the PPP/C Government (and PNC Opposition) can’t be this stupid, this slothful, this squeamish as not to discern what is before us. He who seizes the moment just built his own express track to the bank. And the Guyanese people could get to experience a little idea of what it means to be oil owners and producers of oil.
LOOK WHAT YOU’RE GETTING WITH 52%
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