Before the American presidential election, many oil analysts had predicted a relative fall in the global oil prices, once a definite outcome of the election was known.
Given the facts that the domestic prices of petroleum products in the U.S. are direct followers of the world crude prices and that the public opinion is quite sensitive to price of gasoline, it follows that high oil prices could affect the popularity of vice president Gore and help Bush win the election ("The U.S. presidential election & oil prices" views on news, Energy Economics; issue no 10)
The history of presidential elections in America show that economic issues have a very special place in the votes of the people. Recession in the U.S economy in the final year of president Bush's office costs him the election in 1992.
And conversely, the glittering economic situation under Clinton years was quite promising in allowing the Democrats to continue occupying the White House for (at least) another term. This way the Republicans would be left with no hope of regaining power for quite sometime to come.
On the other had there was little doubt that almost the entire U.S. oil industry and major oil companies are in the Republican camp and had rallied around Gorge W. Bush.
Even smaller oil companies as well as oil consulting firms were donating good sums of money to the election campaigners of Bush.
It is then easily concluded the pro Bush U.S. oil companies, who are quite influential at the international level, had a clear motive and interest in keeping the oil prices high, mainly because it would help their candidate win the race.
What supports such a scenario is that the price of WTI was leading the world prices up for a considerable period ("Which way is WTI heading"? views on news, Energy economics issue 11&12). In addition the U.S. domestic prices for products had a noticeable effect on the global oil market.
To this end, following leverages could have been employed by the American oil Companies:
1)Using the futures markets to create artificial demand leading to higher prices.
2)Keeping some of their potential capabilities in all sectors of the industry (in upstream, logistics and downstream) stagnant, both inside and outside America.
3) Changes in routine overhauls, repairs etc in order to create constraints in the market.
4)Manuplation of their commercial reserves volumes.
5)Manuplation of data and statistics to create anxiety in the market.
In any case, due note must be taken of the drastic downward trend of the oil prices soon after the U.S presidential election was over.
It should be noted, however, that factors affecting the oil market are too complex to be confined to the said election. But the leverages mentioned earlier could certainly have accompanied the impacting factors.
Finally one can not write off certain effective international tendencies and countries who benefit from the Republican's reign as the catalysts to the whole affair.
Source: www.iies.ac.ir.
© 2001 Mena Report (www.menareport.com)
