The Saudis as rational economic actors want to ensure that their oil in the ground remains valuable. A short-term revenue spike does not interest them so much as they already have more money than they can spend or sensibly invest. Other OPEC governments which are broke and into mindless spending are doubtless greedy for every additional dollar that they can earn for each barrel that is taken out of their dwindling reserves. Despite arguments to the contrary, the rest of the world should not be clamouring for low oil prices; paradoxically we have a vested interest in a high oil price. This is particularly true of those parts of the world interested in new discoveries, inventions and innovations. The Silicon Valley investors in alternate energy start-ups, Indian engineers grappling with solar lights and yet-to-be discovered potential Thomas Edisons are all quite happy, thank you. The pain of middle-class Indian LPG consumers may be real. But in this pain (and the resultant demand) is the hope for new fuels to emerge.

Oil has been at best a mixed blessing for its possessors. Consider Venezuela, once a shining democracy true to Betancourt’s legacy, an economy on the make, a net exporter of rice till the ‘60s. The oil bonanza has made them a country that imports everything and encourages profligate, even bizarre, governments. Consider Nigeria. Under Tafawa Balewa it was moving to become a shining exemplar for Africa. But then, oil struck. Without oil there would have been no ghastly Biafran war, there would not have been the enormous corruption that is endemic to rentier societies, there would not be the anarchy that now passes for a country. Consider Iran, or Persia, if you will. Without oil there would have been no meddling by the Anglo-American Oil Syndicate, Mossadegh would not have been overthrown by the CIA, a megalomaniacal Reza Shah (he considered himself the metaphorical descendant of Cyrus the Great) would not have started a nuclear programme with the support of President Nixon, a programme that now President Bush would love to shut down, there might not even have been an Islamist dispensation and Iranian women might have made steady progress towards freedom and the pursuit of happiness.

... contd.