OIL reached a new record price above 120 dollars a barrel on Tuesday, with New York’s main oil futures contract, light sweet crude for June delivery, at an all-time high of 120.23 dollars.
A supply crisis in Nigeria and geopolitical tensions over Iran and its influence in oil-rich southern Iraq, plus the Turkish army’s interventions in northern Iraq near to oil-rich Mosul, added to the pressures forcing the price of oil upwards.
Every sharpening of the class struggle, and every setback for US imperialism is almost immediately reflected in the price of the black gold, as the British government found out during the brief but powerful 48-hour Grangemouth strike.
The problem in Nigeria was a strike action by Nigerian oil workers and Nigerian militants attacking an oil ship off the coast. Royal Dutch Shell’s production from Nigeria is down by about 164,000 barrels a day after its pipelines suffered a series of attacks. Shell accounts for about one-half of Nigeria’s 2.1 million barrels-per-day output.
The soaring oil price is producing tensions between the US ruling class and the Arab Gulf states, particularly Saudi Arabia. The United States has been pressing for Opec to increase oil production and cut prices.
The chairman of Opec recently predicted that oil prices would reach $200 a barrel, and refused to raise output.
This prediction is now being taken seriously by capitalist governments, and bankers and bosses all over the world.
White House spokesman Scott Stanzel said on Monday that US President George W Bush will make US concerns about soaring oil prices ‘very clear’ when he visits Saudi Arabia next week.
Bourgeois economists were yesterday united in stating that oil at $200 a barrel will ‘snuff out’ any recovery in the UK economy and in economies around the world.
Analysts at Goldman Sachs, in a report on Monday, predicted oil could reach between $150 to $200 over the next six months to two years.
If oil prices stayed at current levels of $120 or rose further to $150, this would have ‘serious consequences’ for the strength of the economy, economic forecasters said.
Steeply rising oil prices will mean massive increases in food prices, and petrol prices, and bring the class struggle in the western capitalist countries to the sharpest point of socialist revolution, of this there is no doubt.
At the same time as this massive inflation in basic commodity prices is taking place, its opposite is also developing, banking collapses, and a slump as far as investment and production is concerned.
The Swiss bank, UBS has suffered more than any other bank from the US sub-prime crisis and is cutting up to 5,500 jobs, after unveiling losses for the first quarter of 2008 of 11.5bn Swiss francs ($11bn; £5.5bn).
UBS has so far reported write-downs of $37bn (£18.5bn), more than any other leading bank.
So, it is to be slump, hyperinflation, trade war, and oil and gas wars between the imperialist powers and the oppressed nations, while at home it is to be the class war sharpening to the point of revolution, as the working class and the middle class find out that the only way to defend living standards is through a socialist revolution.
The world crisis of the capitalist system, which Leon Trotsky called its death agony, is now developing apace.
There is not the slightest doubt that it is driving forward the world socialist revolution with seven-league boots.
The issue of the hour is the building of sections of the Fourth International in all of the major countries to lead this worldwide socialist revolution to its victory.
This means replacing the anarchy of capitalist production and its integral boom to bust cycle with a worldwide planned socialist economy producing to satisfy the needs of the people.
