Yesterday's crude oil excitement

Crude oil prices rose yesterday by more than $10 a barrel. As you can see from the attached chart, from the New York Mercantile Exchange, prices were trending down Tuesday and Wednesday. They were flat through Thursday morning in the neighborhood of $122 a barrel. Then, Thursday afternoon, came the start of the spike that continued until Friday afternoon.

So ... what happened? Trading at the New York Mercantile Exchange may have been driven (I say "may" because I'm guessing) by a combination of news items that together suggest further violence in the Middle East and, accordingly, more supply disruptions.

Item: On Thursday, the Turks and Iranians announced that they had launched co-ordinated attacks against Kurdish rebels in the north of Iraq. Condi Rice met with Turkish officials on the subject and released a statement that didn't mention the Iranian role at all, but did say that the Turks and the US are "on the same page" as against the rebels.

Item: a deputy prime minister of Israel said: "If Iran continues its nuclear weapons program, we will attack it."

Item: There's been a new outbreak of violence in Sri Lanka in recent days, including two bus bombings in the capital city Friday. The guerillas, a/k/a/ the Tamil Tigers, demand a separate homeland in the north of the island nation.

Consequence? The rise in the price of a barrel Friday (forget the start of the run-up Thursday) was the equal of the WHOLE price of a barrel in 1998.

If the sense of imminent doom passes over this weekend and things calm down a bit, contracts will lose some of this value in trading again next week.

But I'm still just guessing.

Iraq in 1958

Someone sent me a link, not long ago, to an article that first appeared in The Atlantic in 1958 about turmoil in Iraq.

Here is the link.

Apparently the article is circulating through the blogosphere these days in a spirit of "the more things change, the more they stay the same."

But that wasn't the lesson I drew from it. The lesson I drew was that I'm rather humbled by the extent of my ignorance of recent Iraqi history. And, yes, I call 1958 "recent" because, after all, history in Iraq goes back to Hammurabi.

Anyway, in 1958, William Polk wrote: "The keystone of the Iraqi arch of power was Nuri as-Said. Observers had long realized that if he should be removed, the whole structure would crumble. Nuri ranked as one of the more able politicians in the Middle East, and perhaps his last great compliment came from the rebel leaders when they announced to their followers that the revolt would fail if Nuri were allowed to escape. But a man who is bitterly hated by a large proportion of his people is always in danger of assassination. Nuri was more than seventy years of age, in bad health, and would probably have been forced to retire soon. In case of his retirement, which Washington should have foreseen, upon whom or what were we planning to rely?"

Until I received this link, I don't believe I had ever encountered the name Nuri as-Said.

Now that I have, it is of course easy enough to look it up in wikipedia, or in some more traditional sort of reference work. What Polk there called "the revolt" was it appears more of a military coup. But the coup was made possible, in fact it was made easy, by the popular discontent with the monarchy that Nuri was serving as prime minister -- discontent that swelled as it repeatedly lashed itself to the mast of British policy in the area.

Two years before the 1958 Iraq crisis, in Egypt, Nasser (with some help from Eisenhower) had forced the Brits and French to back down and accede to the nationalization of the Suez canal. As a result, the Brits were seen as vulnerable by the "Arab street," and Nuri was in the untenable position of acting as the local representative of an imperialism in retreat.

I really should give myself a primer on such points, to try to get a broad overview of the history of Iraq from, say, 1945 to the present.

But, hey ... I'm an American, filled with the traditional presumption of my people that it is our God-given right to ignore the rest of the globe, while demanding that it attend to our whims.