Oil Weapon?

Geopolitics.
Note that all of the following is just a personal guess.

Oil moving down with many causes, from warm winter in the Eastern US (where heating oil is a major market) to Goldman Sachs shifting the mix in their commodity index, to simply unwinding of last year's bubble.

Who wins?
Consumers.

Who looses?
Producers, from Venezuela to Iran and Russia.
Note that oil prices were a major tool used by Regan to put pressure on Russia to end the Cold War. Is the same tool being used against Iran?


(image from WSJournal)

Has the Bush Administration decided to play hardball for the last 2 years it has left?

Upping the ante in Iraq with troop buildup (which will be used to counter Shia militia as well as Sunni's), support for Ethiopia against "Islamic Courts" in Somalia, now adding pressure through the markets to signal Iran and Russia to "play nice."

How does China fit in?
Treasury Sec. Paulson seems to have had some success in currency discussions.
Lower oil prices help China, is there a quid pro quo?