There is no doubt it is hard to feel sorry for Big Oil. It pulls in billions of dollars in profits whenever oil prices go up, and yet higher oil prices result in higher petrol prices for the public.
So whenever these companies are doing well, the public is doing worse. And that, inevitably, leads to talk about punitive taxes (or at least a loss of tax breaks) for the oil industry.
That time has come once again. A few weeks ago, the world’s biggest oil companies reported massive profits just as petrol moved up and beyond, in some cases, $4 a gallon. That is a big deal in the US, where people often commute long distances to work, particularly in sprawling cities like Houston, Chicago, Los Angelos, and other highly populated areas. And it is particularly important now when the economy has not fully recovered, unemployment remains high and the public at large is still having economic difficulties.
Wikileaks has an impeccable sense of timing. As Hilary Clinton meets counterparts from Arctic nations in Greenland to talk about oil, the whistle blowing website publishes a raft of cables showing just how much international tension the country’s natural resources have provoked.
The cables make for fascinating reading, and tell a tale of US perceptions of Russian paranoia and aggression in the territory. They claim:
The warnings may finally be coming true. Four months after the OECD warned that the soaring oil price could damage the economic recovery in developed nations (since when Brent has advanced another 19 per cent), the IEA has noticed that global oil demand has begun to flatline.
In its March Oil Market Report, it notes the first month of near-zero growth since the summer of 2009, which was just as the recovery was getting under way.
Part of the decline in demand is because of the Japanese refinery capacity which was knocked out by the earthquake and tsunami.