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THE USA, Europe, and Russia are using oil and gas as the latest weapon in the current Russia-Ukraine war. These were the same countries that condemned the Arab oil exporting countries for doing exactly the same in October 1973 in retaliation against the USA and Holland for supporting Israel and providing all forms of military support such as weapons and military equipment of all kinds, as well as personnel. The westerners even protested and held demonstrations on streets against the action of the Arab oil countries.
Today, oil and gas are being used by all, while the USA and Europe have been imposing sanctions against exports and imports. Russia is reciprocating the same by slowly reducing gas exports to Europe, based on all sorts of technical and maintenance-related reasoning, rather than direct retaliation. The concern, however, is whether Europe can live without Russian gas supply during the coming winter months. This is a concern for every household. Now oil and gas are being used openly as main weapons to influence the war and maximize damage for the final consumers globally. They do so by either putting a limit to the availability or putting it out of reach by increasing the prices.
The Russian officials are anticipating oil prices to hit above $ 100 a barrel, with the same being repeated by the international financial houses. Nothing seems certain nowadays with the energy prices swinging so wildly, and no one can predict any figure for the oil price from $120 to the current price of below $ 100. This is reflecting on the consumer behavior to avoid anything expensive and to tighten the domestic belts as much as possible, while teaching children to save, save and save on anything, even their weekly pocket money, and not ask for more during dinner time.
Life is getting harder by the day, especially with the inflation, and the high prices of two most basic elements – food and energy. No one knows so far whether the impact of the oil consuming countries’ decision in 1973 on some European countries and the USA will be the same from today’s oil and gas boycott as a result of the occupation of Ukraine. The Arab countries are enjoying their best relationship with the USA and Europe, for sure.
By Kamel Al-Harami
Independent Oil Analyst