Posted 11:27 AM by Robert

"Nobody seems to have thought ..."

Lynne Kiesling raises even more profoundly the basic question "just who the heck is 'nobody' supposed to be, anyway?"

Among other things, Lynne says: "So Krugman's hyperbole seems unfounded; market participants are certainly paying attention (and I would bet that administration members are too) to the possible disruption of world oil markets."

So very true. And the clearly astute and reportedly babelicious Dr. Kiesling won't lose money on that bet, because OPEC exporters have publicly sought to tame soaring prices by pledging to fill any supply gap left by the strike in Venezuela or a possible war on Iraq, with Saudi Oil Minister Ali al-Naimi specifically telling reporters at a meeting of Arab oil ministers in Cairo: "Shortages, when determined, will be made up. We want to have no imbalances in the market."

In this case, one doesn't have to have been in attendance at administration meetings that may have addressed this issue in order to refute Professor Krugman's preposterous claim that "nobody seems to have thought about the state of oil markets if there is simultaneous turmoil in the Persian Gulf and Venezuela."

On the contrary, the commercial oil markets are obviously obsessed with this possibility, and if the Administration is not aware of - and working in overdrive on - this very issue, then the reality is contrary to all appearances, especially since - according to the New York Times itself - a lot of people have been harping at the Administration to release oil from the united States Strategic Petroleum Reserve for exactly this reason:

Increasingly, industry analysts and oil traders have called on the Bush administration to release oil from the strategic petroleum reserve to ease the supply shortage. But they also concede that the administration may be waiting to gauge what the full impact of a war in Iraq could be on the oil market, and to release crude oil from the reserve only then.