Just what is Harun Rashid on about ? Harun has made a string of claims relating to the current crisis of the world oil price. Yet little of what he claimed is even remotely connected to anything else he wrote in his column, much less what to do about world oil price hikes.

On the one hand, Harun doesn't think the current oil price has anything to do with supply or demand. Nonetheless, he gives some space in his specious commentary to economic factors that govern oil price rises, including supply and demand.

Conversely, Harun mused if the United States and Britain have a military plan to pressure the (Arab) oil producing states in a bid to control the world oil price to a level that's more sustainable, if not for the Western industrial economies, then at least for the world economy.

Yet here, however, Harun forgets that before the Iraq war in early 2003, and even during it, the world oil price was around US$18 a barrel.

In fact, between the first and the start of the second Iraq war, world oil price had been as low as US$12 a barrel much to the displeasure of oil producers and sellers. Prices these low admittedly don't add much profitability to both the oil producing states and especially the oil majors like ExxonMobil and Shell. Nor does it please oil company shareholders what with dismal share values and returns on their investments.

Still, world oil price did climb back up sharply, to around US$28 a barrel. That's when Bush declared, in May, the end of major confrontations in the US-led war against Iraq. And for all the problems that have brewed immediately after Saddam Hussein's ouster, world oil price stayed at that level for some considerable time. You'd have to ask why.

Only in recent weeks did the world oil price rocket to around US$42 a barrel. It has come down to a smidgen below US$40 in recent days. That's not to say it won't fall more, nor does it mean world oil prices won't shoot higher, too.

Fact is, world oil prices bounce up and down like a buoy in a pretty menacing ocean. And in world politics, oil as the juice that keeps the world's major industrial states ticking is seen behaving precisely that way.

It's sheer bunkum for Harun to suggest there's no relationship between oil prices and global supply and demand. The erratic pricing of oil in recent years, or even in recent weeks much like the oil crises of the 1970s and 1980s fundamentally trashes Harun's simplistic analysis.

World oil price is governed about as much by world market supply and demand as by a string of other factors, including geopolitical. But whatever the historical and political complexities of the highly volatile Middle East, world oil price is not subjected in any way to the mendacious and hubris-tic value of culture.

Something else Harun ignores is the cartelisation of the world's major oil companies and the cartel of oil producing countries. If he had done his homework, Harun would have realised that even before the start of the Cold War, oil cartels and states have often worked together to ensure smooth supplies of oil. But rarely have they been able to influence stable world oil prices, at least not for too long.

That's not to say oil cartels and oil producing states haven't had an overwhelming influence over world oil supply and price today. And in the absence of any real energy substitutes at least in commercially viable quantities both cartels also have a stranglehold on demand, especially prices during major conflicts where they can tighten supply even before anyone can blink.

True, a 24-hour delay in a tanker delivery is enough to send jitters through the oil futures market, but with no immediate price impact at the pumps of petrol retailers. But Harun's claim that producers and oil majors can withdraw oil from markets if it doesn't meet their price is bizarre. First, he presents no evidence to back his claim. Second, research shows no such precedent whatsoever.

Besides, given the huge investments both producer states and the oil majors will have made in the oil business, sitting on oil stocks until their price is met will hurt them more than, say, even the US, which is known to have stockpiles of oil for strategic and dire economic times.

But lesser developing states could be held hostage to the oil majors, given the pariah status of their developmental status in relative global terms. Yet states like Nigeria and Indonesia, which produce oil for the world market, have squandered oil revenues instead of building their economies or improving the living standards of their peoples.

There are a few reasons why world oil prices have shot up and seem to be staying high up. For starters you'd only have to look at the oil futures market to know that key benchmark prices for Brent North Sea crude oil and the New York reference light sweet crude, for June delivery, have been hovering close to US$40 a barrel anyway.

That's a reflection of the growing jitters about the tenuous role of the US-led coalition in Iraq and the wider Middle East.

Saudi Arabia may well say to the world media it plans to boost production, but in the greater scheme of world oil politics, especially world geopolitics and the world economy, statements like this are a no-brainer. They're meaningless.

Because in Iraq, tanker loadings of crude oil have been halved systematically for some time amid attacks on Gulf oil facilities, like the one in Yanbu port on May 1. One of the two feeder pipelines in the southern port city of Basra in Iraq was also sabotaged.

Who cares about price elasticity of oil demand? Everybody who wants their economies to grow and those who wish to keep their jobs in industries that are heavily reliant on oil imports. That's who. Even blind Freddy could have told Harun this.

And who knows where Harun has been but at some point in time price elasticity of demand for oil can sway folks from driving their own cars to using public transport instead.

Because it's more (real) income based, oil price changes generally tend to adhere more to income elasticity of demand. An upward oil price movement is like an increase in tax or inflation: it robs consumers of real income and spending propensity.

And there's nothing to stop transport companies from passing their higher costs on to consumers, like Malaysia Airlines did .

Something else Freddy would have told Harun: during the northern winter in the West, demand for oil is greatest than most other months.

But if the US economy the world's biggest, contributing 35 percent to world GDP keeps growing as fast as it has recently, thanks to rising consumer confidence, US demand for oil will this time round be very high, including during summer and the fall. And the winter cycle isn't that far away, again.

Add to this rising demand for oil from the growing economies in Asia, principally the oil-starved Chinese economy, and you can bet your bottom dollar that the world oil price will stay very high up as world aggregate demand soars in the second half of the year.

That's the nature of the beast and it's called supply and demand. However, price equilibrium in world oil markets doesn't match the textbook model found in Economics 101 courses. The world oil market doesn't act and react in the wacky ways that Harun suggests.

Oil majors and oil producing states will seek to influence one another on the amount of oil to be pumped out from oil wells and sold to world markets at prices on which they may collude. Wink, wink, nudge, nudge: that's all that needs to be said between these parties in their so-called collusion talks.

Plus the fact that most oil majors and producer states still work within the peculiar oil market economics called 'posted prices'. This doesn't only work in the Middle East but anywhere else where oil is found, pumped, processed and sold by the tanker-load.

One can be sure that just as it had happened when the world economy was dependent on coal to power their industries in the 19th century it'll be foreign policy, not military action, by the US primarily, that will seek to ensure smooth oil supplies though this does necessarily also mean bringing down world oil prices.

Because in the end, states will gladly allow the greater socialisation of higher oil prices with consumers, from which each state's coffer will only fatten through taxation, duties and levies.