ChevronTexaco Corp. CEO David O'Reilly has his finger on the world's oil pulse, noting on Feb. 15 that the era of cheap petroleum is over. "We're seeing the beginnings of a bidding war for Middle Eastern oil between East and West," he said.
The coincidence of rising oil demand and the decline in its production by members of the Organization for Economic Cooperation and Development has produced an "inflection point," O'Reilly said.
He did not define the meaning of "inflection point" but the same day, Dutch Economics Minister Laurens Jan Brinkhorst had his finger on the same pulse.
Following a meeting in Indonesia, Brinkhorst expressed hope that the Organization of Petroleum Exporting Countries would meet with the European Union in either May or June to discuss the stabilization of oil prices.
"We must have a dialogue between oil-consuming and oil-producing countries for the benefit of both," Brinkhorst said, adding that such a meeting should be held every 6 months.
The Dutch Minister said high oil prices, which soared to more than $55/bbl in October, have both political and economic implications, making the meeting between the two groups necessary.
Brinkhorst expressed concerns about the economic implications, saying that current oil prices of around "$50/bbl are too high" and that a reasonable level would be somewhere around $30-35/bbl.
Of course, terrorists read economic reports and create the starkest political implications of high-priced oil for both producers and consumers. High prices mark the bull's eye of the terrorists' political target.
Oil prices and terrorism
Regarding price and terrorism, Saudi Arabia's ambassador to the UK Prince Turki al-Faisal likewise had his finger on the pulse of the new oil era identified by O'Reilly and Brink- horst.
Also speaking on Feb. 15, al-Faisal said Saudi Arabia seeks "a reasonable and affordable price" for oil, but he did not take up an offer to define what that price would be.
Al-Faisal, who formerly served as Saudi Arabia's intelligence chief, was more reassuring on the implications of political terrorism.
He said Saudi security forces are on high alert to protect the infrastructure and wells of the world's biggest oil exporter. "We're always vigilant and prepared," he said.
Getting up to speed
But Saudi Arabia is not the whole world, and other countries are just getting up to speed.
In Brazil, where defense resources are limited, the government is said to be worried about possible terrorist attacks on the country's 120 offshore oil exploration platforms.
On Feb. 16, just a day after the comments of O'Reilly, Brinkhorst and al-Faisal, Brazil's navy began testing its defenses of Petrobras installations.
It sent 10 men from Brazil's most secret military unit, the Combat Divers Group, to liberate a rig that—for exercise purposes—had been attacked and occupied by international terrorists.
We'll probably never learn who won that particular war game. After all, loose talk costs lives—and oil. Welcome to the new oil era.
