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Washington Turmoil Roils Global Oil Markets

Washington Turmoil Roils Global Oil Markets

Turmoil in the United States…

John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Mexican Government Under Assault From Drug Cartels, Washington Yawns

Suspected Mexican drug traffickers from the Zetas drug cartel on 20 September drove two trucks to a main avenue in the Mexican Gulf coast city of Boca del Rio in Veracruz state and dumped 35 corpses during rush hour while gunmen stood guard, menacing frightened motorists with automatic weapons.

So, why is this being written about here?

Well, if for no other reason, Mexico’s drug cartels have declared a de facto war with the government for control of the country’s northern provinces for exports routes into the United States.

Meanwhile, Washington, fixated on the decade-old war on terror, the Middle East and stopping Palestine’s incipient bid for statehood at the UN, doesn’t even mention a yawn, despite the fact that in the last five years drug violence has claimed more than 35,000 Mexican lives, according to government figures. And that’s the low end of the curve, as a number of human rights groups estimate that the true death toll is 40,000.

Forty thousand.

More than 12 times the number of Americans killed in the 9/11 2001 terrorist attacks, in a neighboring country.

Who cares? After all, we all know that Central America is prone to violence, and well… that’s just the way it is. Why should Washington care?

Quite aside from the human issues involved, Washington should care because, according to the U.S. Energy Administration, of United States total crude oil imports now averaging 9.033 million barrels per day, Mexico with its 1.319 million barrels per day of exports is exceeded only by Canada as the U.S. top importer of crude, and exceeds Saudi Arabian imports by over 200,000 bpd.

But in dealing with Mexico Washington is in a classic state of addict denial – and, after all, it is addicted to not one, but three Mexican narcotics – oil imports, drugs and cheap labor.

As for oil, it is worth remembering that all of Mexico’s energy imports fall under the purview of Petroleos Mexicanos state oil monopoly, more familiarly known as Pemex. Accordingly, threats against the government’s authority, as the Boca del Rio massacres most assuredly are, ultimately threaten the central administration’s ability to rule, which in turn calls into question larger governmental policies.

And the assault on oil exports is led by the cartels’ determination to both preserve and expand its footprint in the lucrative gringo market north of the border.

If we are to believe official Washington, these thugs have somehow managed to thwart border controls to flood the U.S. with cheap narcotics. The real truth, which one can only uncover by a close reading of the regional U.S. press in border communities, is that drug money has largely co-opted the local, state and federal authorities responsible for policing the frontier. Of course, in the post-9/11 security debate this is not discussed to unsettle the electorate.

And the third element complicating the issue is the estimated 35 million Hispanic immigrants, mostly illegal, now present in the U.S., a source of their wealthy employer’s interest in cheap, undocumented labor, a handy device for driving down wages.

So, as long as America continues to inject cheap oil, drugs and below minimum-wage labor into its collective arm to satisfy its cravings, little will change.

But it’s worth remembering that the U.S.-Mexican border, all 1,969 miles of it, is the only place in the world where the Third World washes up against the First. One can make a case for the divided Korean peninsula being a similar case, but the populations on both sides of the DMZ share a common culture, unlike the U.S-Mexican frontier, where a desperately poor Latino culture exists next door to the rich, English-speaking U.S. society.

Washington has got at some point to address all three interrelated issues - oil dependency, the drug culture destabilizing the frontier and the massive swell of undocumented aliens across the frontier. Washington’s fixation since 9-11 on the Middle E|ast and South Asia has allowed the issue to slip from what should be front and center of U.S. diplomatic policy, for all its ominous long term consequences.

Mexico’s narco-terrorists have effectively declared war on the government’s authority in Mexico City – rather than expending U.S. diplomatic capital in blocking the Palestinian’s bid for independence at the UN, or nation building in Iraq and Afghanistan, Washington might refocus its efforts to our southern neighbor.

After all, imagine Mexico’s carnage figures transplanted to Europe, or even the Middle East – Congress would be foaming at the mouth for intervention. To use the most recent statistics – last month, before the final push on the Libyan capital Tripoli began, a representative of the Transitional National Council estimated that 35,000 Libyans had been killed.

Grievous as the 35,000 Libyan deaths are, a similar number of casualties have occurred in Mexico – America’s neighbor.

In the Western Hemisphere.


Next door.

Time for a rethink in Washington – Mexico City is clearly under siege, and Mexico’s destabilization bids ill for those oil exports.

Bring the troops home…

And deploy them along the Rio Grande.

Or, perhaps not, given Washington’s self-absorption about the electoral races next year.

In the face of such torpor, horrific images such as those from Boca del Rio are likely to be only the beginning.

By. John C.K. Daly of OilPrice.com

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  • Anonymous on September 23 2011 said:
    According to the ONDCP, two-thirds of the cartels' money comes from selling marijuana in the U.S. The main reason for their killing is to protect their supply routes to this market and maintain market share.The massive, unrelenting demand for marijuana in this country combined with no legal supply diverts more than $10 billion a year to the cartels. Given the amount of money at stake, it doesn't matter if we eliminated every cartel member today - tomorrow more impoverished, desperate people will take their place seeking to make some of that money their own. We will NEVER end the sadistic cartel murders while marijuana remains illegal.Parents in this country have to decide if we want drug dealers selling marijuana to kids or supermarkets selling legally-grown marijuana to adults at prices low enough to prevent illegal competition. Forty years of failed prohibition has taught us that "nobody selling marijuana to nobody" is NEVER going to happen!
  • Anonymous on September 23 2011 said:
    I share your outrage over the Cartels takeover of Mexico. I don't think the White House is yawning. Check our Obamas July 25 2011 Executive Order declaring Transnational Organized Crime a National Emergency. I'm surprised to see the subject addressed so seriously on an Oil related website. Who do you think the Cartels work for? Here's a hint. The Cartels are at the bottom of the organizational chart - not the top. ;-)
  • Anonymous on September 23 2011 said:
    Re: Bring the troops home…And deploy them along the Rio Grande.Changing locations would not improve the essential ineptness of the idea. When will Americans understand that this is not a military problem? For Americans everything is a military problem. Got a problem? Shoot it, bomb it. That's the American way. The US simply will not admit to its own total fault in this destruction. Its naturally predatory and arrogant attitude precludes it. But the fact is that Mexico has a US problem. A nation of drug abusers constituting an enormously lucrative market for criminals and for officials co-opted by the money--and it goes all the way to the top. The banks launder money, officials turn a blind eye. The whole business is rotten to the core, just as the country's soul has become profoundly corrupt. The entire world needs a very long vacation from the United States, the world's most predatory and murderous, obscenely greedy and self-satisfied country on earth.
  • Anonymous on September 23 2011 said:
    Let me think for a moment - 1st world, 3rd world . . . Mexico has an excellent free health care program, civil liberties unequaled anywhere in the world, excellent education programs,low taxation and an economy equal to those of Australia and Canada that has been stable for more than 20 years. The United States has what? Oh,a demand for illegal drugs second to none, no medical care, poor education standards, high unemployment blah blah ...
  • Anonymous on September 23 2011 said:
    What happens in Mexico is of no concern to Zionist occupied Washington DC or AIPAC either one. The USA is no longer a defender of freedom rather they are an occupied government that is concerned with Zionists almost exclusively.
  • Anonymous on September 24 2011 said:
    A lot of people will probably agree with you Jillian, but I wonder how many thinking parents will. A nightmare for thinking parents must be to have children who are junkies. Uncle George W. and Uncle Obama thought it right and proper to fight stupid wars in distant parts of the world to make the world a better place, and the stupid Cameron, Sarkozy and Fogh Rasmussen went to Libya to protect civilians. What about making their countries better places, and protecting civilians and the children of civilians in their own countries.By the way, Galloway is the boss of an investment bank in the novel I am writing.
  • Anonymous on September 25 2011 said:
    One of the points Luigi touched on is interesting, and this is educational standards in the US. Something has gone wrong with these, and dope might be one of the reasons. On the other hand, many excellent engineering graduates from Mexico come north and get jobs that American 'heads' either do not want or are so spaced out they have nothing to offer. I'm thinking here of 'non-hackers' like my good self when I was expelled from engineering school for poor scholarship, or was fired from my engineering job in Los Angeles. However, as Stan (and Bertold Brecht) pointed out, the army was still recruiting, and I paid the 'Green Machine' a visit on both occasions.Let me say something here Stan that my one of my commanding officers said to me: without wars or preparations for war, the US might be in serious trouble. Hallelujah to that Major H. You sure got that right!
  • Anonymous on September 26 2011 said:
    John, this is really a good article, but face the facts of life. Obama is incompetent, Bush was worse than incompetent,and.... and the American voters are getting what they deserve. Why did things become like this? While did our political masters develop serious outbreaks of the stupids. Clearly, it is their international preoccupation - butting in on the affairs of others.

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