...In Saudi Arabia, a Fragile Monarchy

recruited volunteers for the Iraq insurgency. Thanks to our oil addiction, the United States thus finds itself in a deadly embrace with a country that, were it not for oil, would be viewed as posing a threat to stability every bit as great as Iran.

Moreover the monarchy is threatened by what has been called a “slow motion insurgency”, owing to a number of causes ranging from resentment of wealth hoarded by the vast royal family to the presence of American troops protecting its oil fields. Almost half of Saudi oil comes from one field, and two-thirds of its oil passes through a single processing facility and two terminals, one of which was the target of a thwarted attack in mid-2002. A successful attack that closes the spigot of almost 11 million barrels a day from Saudi wells is all it would take to crash economies worldwide.

The Russian company, Gazprom, is the world’s biggest provider of natural gas and through acquisition owns the world’s third largest oil reserves after Saudi Arabia and Iran. Once reliant on its military, Russia now wields energy to dominate the neighbors that it formerly controlled, shutting off supplies to Ukraine in an intensely cold winter to force them to accept price increases and threatened to do the same to Belarus. Many former Soviet Union countries are entirely dependent on Russia for their energy, the former satellites rely on Russia for most of their supplies, and the threat extends to Europe, which gets 30% of its gas from Russia.

More relevant to the U.S., Russia is now using environmental complaints and health and safety inspections to stall multinationals developing the rich oil and gas deposits of Sakhalin Island northeast of Japan. The delays are viewed as an attempt to force new terms to replace contracts that were signed with Royal Dutch Shell and ExxonMobil when oil was much cheaper, and possibly appropriate a share of ownership in the hugely costly projects – Shell is spending $20 billion, ExxonMobil $17 billion – possibly without reimbursement.

Russia, producing 11.4% of world oil, runs a close second behind Saudi Arabia’s 12.6% despite ranking eighth in proven reserves. Putin’s steady march to squeeze the multinationals for control of oil and gas, if not its outright nationalization, is seen as how he intends to restore Russia to world power status and challenge the West, this time using its oil weapon rather than the military.

Venezuela has similarly moved toward nationalization. Brandishing the slogans “The Oil is Ours” and “Down with Imperialism”, Hugo Chavez last April announced that Venezuela would commandeer majority interests in projects underway in the heavy oil fields of the Orinoco Belt in which six companies -- three of them American – were investing upwards of $30 billion. Some threatened to pull out, but relented, ceding operational control rather than foregoing the prospect of 600,000 barrels a day from deposits that could surpass those of Saudi Arabia or the Canadian oil sands.

Chavez calls his biggest customer, “the North American empire…the biggest menace to our planet” and speaks of George W. Bush as “the devil”, but America