OPEC, Meet OPIC

BEIJING/LONDON (Reuters) – China is scouring the world for alternative oil supplies to replace a fall in its imports from Iran, as it seeks to negotiate lower prices from Tehran, and has been drawing heavily on Saudi Arabia.

Industry sources told Reuters that Beijing had bought the bulk of an increase in crude oil supplies from top oil exporter Saudi Arabia in the last few months.

The world’s second-largest oil consumer is also importing more cargoes from West Africa, Russia and Australia to replace reduced supplies from Iran.

China is the top buyer of Iranian oil, taking around 20 percent of its total exports, but since January it has cut purchases by around 285,000 barrels per day (bpd), or just over half of the total daily amount it imported in 2011.

Saudi Arabian output reached 9.76 million barrels per day (bpd) in December, up 360,000 bpd from October, OPEC data show, and has remained near that level in January, according to a Reuters survey. Several sources in the oil industry said China has bought a good part of the extra oil.

“On average, Saudi exports went up by 200,000 barrels per day and this went to the East, overwhelmingly to China,” said one of the sources, a senior executive with the trading arm of a U.S. oil company.

Look at what’s happening right under your nose. The world is changing, and for me, that’s for the better. The days of oil importing countries fighting one another tooth and nail to secure oil reserves are coming to an end.

It helps when the biggest oil importers also seem to have the biggest standing armies.

Why have we been letting OPEC set oil prices for this long, while a good portion of the proceeds go to causes directly pitted against us? There’s no reason for that sort of thing.

OPEC may control a huge chunk of the oil production, but we control the oil consumption.

Their fields are low maintenance and the recoverable oil is cheap. There’s no reason we should be paying Iran $100 a barrel when their costs are $10 (or whatever they really are). Especially since lots of that money is just flooding back into their weapons programs.

Here’s a better idea: the U.S., China, and Europe divide up the planets oil strategically, so that these places either provide the goods at lower prices to one or fewer consumers, or else they can see their net income from oil exports plummet perilously, sending their people into violent rampages.

Farfetched? What else was Geithner doing in Asia this whole time?

It’s happening as we speak. China is putting on a grand performance, demanding the West leave its super-best-friend Iran alone, and threatening WW3. But at the same moment, they are proceeding very delicately, setting up to knife Iran in the back and mow them over on the way to their energy needs. Who will over bid them; the EU? America?

A million Chinese boots will soon be high stepping over Khamenei’s backside.

The days of putting open with the OPEC oil trust are coming to an end. Those countries have become too dependent on their oil revenues. They cannot afford to cut production, and therefore cannot afford to force prices higher.

OPEC won’t be missed.

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