From yesterday’s Congressional testimony of Gal Luft of the Institute for the Analysis of Global Security:
Mr. Chairman, members of the committee, 10 years ago, Osama bin Laden set a target
price for oil at $144 a barrel. At the time, crude oil prices stood at $12 a barrel and his
figure, aimed to compensate the Muslims for what he called “the biggest theft in the history
of the world,” sounded delusional.
Four years ago, just prior to the U.S. elections, when oil prices stood at $38, bin Laden explained his economic warfare strategy: “We bled Russia for 10 years until it went bankrupt and forced to withdraw in defeat. We are continuing the same policy to make America bleed profusely to the point of bankruptcy.”
Reputable energy analysis outfits held a completely opposite view on the future of oil. A
2005 report by Cambridge Energy Research Associates (CERA) held that by 2010 global
oil supply would rise by as much as 16 million barrels per day (mbd). “We expect supply to
outstrip demand growth in the next few years, which would take the pressure off prices
around 2007-2008,” wrote the report’s authors. As we know, this never happened. World
oil production has been flat since 2005 and $144 might soon become a fond memory.
Today, with oil prices above bin Laden’s stated goal, his economic warfare strategy seems
like a resounding success.
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