JOURNAL: A Shadow OPEC?

Intentional disruption of the global oil system (MEND shut down 169,000 barrels a day this week in Nigeria and Terrorists shot an RPG at a Japanese Oil Tanker off of Yemen) is driving the price of oil well past $100 a barrel.

Have we reached the point where guerrillas/terrorists now have more control over the price of oil than Saudi Arabia? A real and quantifiable Shadow OPEC, where even small attacks can influence prices? Perhaps.

If so, this would be the realization of a potential I identified back in 2004, when I began to write about the trend in global terrorism towards systems disruption.

Comments

[Duncan Kinder]

An historical analogy:

The term "blackmail" derives from the era of the Border Reivers, cattle raiders along the English Scottish borders during, roughly speaking, Tudor times.

"Blackmail" then differed from its present means. In return for payment, reivers would forbear from raiding your cattle. It was sometimes also called "black rent."

This cattle raiding was perceived by the Tudor and Stuart crowns as criminal, yet to it, to some extent, arose from a cultural misunderstanding.

Reivers belonged to a society that did not understand that one's ownership of herd animals, such as cattle or sheep, was fixed but rather was yours only for so long as you could hold it. Therefore, it was, for them, logical to charge rent for the service of forbearing from raiding you of your cattle.

Anglo-Saxon common law has a similar concept, the "wild animal rule" or the "law of capture." It applied to non-domesticated animals, such as dear, bears, squirrels, and so forth. They were originally nobody's property and and could become yours for only so long as you could hold them.

Interestingly, the wild animal rule also applies to oil and other fugaceous minerals which one can extract from the earth. After petroleum became important in the 19th century, the problem arose if you owned Blackacre, I owned neighboring Greenacre, and both of us had wells drilling oil from an oilfield lying beneath both our properties. Arguably, I could be sucking the stuff out from underneath you, so would not thereby be taking your oil? The law decided to apply the wild animal rule. The oil belongs to whoever "captures" it by drilling it out.

So the global guerrillas attacking oil supplies are, in a sense, merely liberating the wild animal, much like the reivers once did to the cattle.

[mi]

>> The law decided to apply the wild animal rule. <<

Void the fact that this time you're operating in a globalised free market with hedgefunds storing the stuff to drive up price and of course OPEC.