In an interview with Channels TV, on Sunday, December 7, 2014, Gen. Muhammadu Buhari of the All Progressives Congress (APC) said he “will stabilize the oil market” if elected president. This statement has led individuals to question the economic intelligence of the former Head of State; how he intends to single-handedly stabilize the dwindling oil price or if he spoke in ignorance. Despite the wide negative reactions, and against major notions, I perceive that Gen. Buhari’s statement may not really stem from economic cluelessness as some Nigerians have claimed. There may be a hidden agenda as powerful individuals can influence the global oil price.
General Buhari (Rtd.)
General Buhari (Rtd.)
In 1973, Egyptian President, Anwar Sadat, convinced Saudi Arabia’s King Faisal bin Abdulaziz Al Saud to cut production and raise prices, then to go as far as embargoing oil exports, all with the goal of punishing the United States for supporting Israel against the Arab states. It worked; and the “oil price shock” quadrupled prices. This happened again in 1986, when Saudi Arabia allowed prices to drop precipitously, and then in 1990, when the Saudis sent price plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy.
The current oil price crash appears to be a ploy by the Saudis and the United States to punish Russia and Iran for supporting Bashar Assad’s presidential regime in the Syrian war. Saudi Arabia’s refusal to cut OPEC production in the face of the oil-supply glut this year hit hard Russia, Iran, Venezuela, and indirectly Nigeria. The Saudis have a clear political reason for refusing to cut production. And the oil price will stay pretty low as long as Saudi decides not to cut production. They have deep pockets and can handle the consequences for a while. If it inflicts damage on Russia, Iran, Nigeria, and Venezuela… then it is okay for the Saudis.
Buhari enjoys good relationships with both the Saudis and the same US government that wants Goodluck Jonathan ousted. Hence, he must have been banking on the support of the Saudis and the US when he boldly asserted that he will stabilize oil market. Reportedly receiving support from both the US and Saudi ahead of the March 28 presidential election, it is possible that Gen. Buhari and the APC may have a hand in the timely arrangement of this oil price fall. Whilst it is obvious that the Saudis and the US are working together to hurt Russia and Iran, one cannot say for certain if the timing was strategically targeted at the Nigerian elections for the discredit of the present government.
Purposely causing the oil price to crash is one of the most deflationary things that one could possibly do. The global financial system is already extremely vulnerable. Those playing politics with the oil price are playing with fire. By the end of this year, the entire planet could be dealing with the consequences. If Gen. Buhari is serious about service to Nigeria, he mustn't wait until he is elected president before intervening to seek for solutions. The Saudis play a key role here. If they want to see this through for the next few years, it will - and vice versa. It won’t be a surprise if the oil market is stabilized shortly after Nigeria’s presidential election.
Since Buhari clearly stated that he will stabilize the oil market, there may be something he can do to influence the price. If he is really that powerful, waiting until he is elected president means he is more concerned about personal glory than the well-being of Nigerians. One thing is certain; with or without Buhari, the global oil market will be stabilized on the long run, and the value of our currency will return. The ongoing petro-politics will surely come to an end.