Oil's Still Well With OPEC

Iraq's call Tuesday for a rerun of that 70s embargo — and Iran's helpful tips on how it might work — put a scare into Wall Street with the specter of $50-a-barrel oil prices throttling the global economic recovery in its swaddling clothes. But by Wednesday the rest of the Arab world was quietly making it known that they're not about to let a policy disagreement get in the way of a good buck.

"Politics need to be distanced from these prices," Qatar Oil Minister Abdullah bin Hamad al-Attiyah told his official news agency. Saudi Foreign Minister Saud al-Faisal pointed out to the French paper Le Monde that oil and gas revenues — which account for some two-thirds of the typical Gulf state's budget — are "what Arab nations need most for their development," adding diplomatically that such revenues were also the best way for Arab nations to bolster their defenses against the rampaging Israelis.

And like it or not, the U.S. is not only the world's only superpower — a bad enemy to make, particularly at a time when Bush is trying so hard to be nice — but also a very big a customer to lose. Saudi Arabia, without whom an effective embargo would be impossible, has spent three decades since the 1973 effort proving to financial markets that it is a reliable oil supplier (and a worthy recipient of U.S. aid); an embargo would destroy all that. And the economic recovery in Asia, Europe and the U.S. has now begun to bring prices up to where OPEC wants them — kill the recovery, kill the demand, and prices with it.

Certainly the White House doesn't sound too worried. Grilled on the subject of rising pump prices Wednesday, press secretary Ari Fleischer dismissed the idea and drily referred reporters to his boss' energy legislation (including ANWR drilling) as a way to reduce the American dependence on foreign oil — perhaps the Senate should consider passing it.

Is all this subject to change? Absolutely. Oil may be the Arab world's daily bread, but it's also its only weapon — if, say, Arafat is killed or Israel goes too far in its incursions into Palestinian territories, popular sentiment in the already-shaky local regimes could force Arab governments to put up a show of defiance to calm their constituencies. And even the threat of an embargo could push up global prices, just as the more immediate threat of a war-related supply disruption is doing so now. And it might even have the desired effect — just as Sept. 11 has made "reducing our dependence on foreign oil" a cause celebre of both parties (the disagreement is over how to do it), a politically painful stretch of sky-high oil prices could see Washington getting serious about reining Sharon in.

But for now, whatever the U.S.' differences with the Arab world — and they are many and inflammatory — it's nice to know that the two worlds still see eye-to-eye on one thing: The Almighty Dollar.