It's about oil
Many charge that the United States is in Iraq for the oil and oil alone -- a perception that has hardened by the obvious fact of the U.S. dependence on oil

June 30, 2005
iranian.com

In the aftermath of yet another Arab-Israeli war in October 1973, the Arab oil exporting countries shut off the spigot and caused a major change in America’s thinking about the Arab countries. While the American public concerned itself with gasoline and fuel shortages, the policy-makers could not help but feel the country being held over a barrel. This was a moment of extreme national vulnerability. By December the seizing of oil-production areas in Saudi Arabia, Kuwait and Abu Dhabi was the possibility uppermost in American thinking. [See “1973 spy files warned US could take oil fields,” in The Boston Globe, January 2, 2004, P. A8]

Not much has changed since 1973 in the American dependence on Persian Gulf oil. In May 1996 a State Department official summarized for a researcher the gist of the U.S. policy in the Persian Gulf in the 1980s as one “securing the free flow of oil at reasonable prices, freedom of navigation and the support of the friendly Arab regimes in the area.” [Christin Marschall, Iran’s Persian Gulf Policy (London, 2003), p.180]

When President George Bush intoned in 1990 that the Iraqi occupation of Kuwait “threatened the American way of life and jobs” we all understood that oil was at the heart of it all -- the rationale mobilized the American domestic support for the coalition that would beat back the Iraqi invaders.

Today many charge that the United States is in Iraq for the oil and oil alone -- a perception that has hardened by the obvious fact of the U.S. dependence on oil. This is why Gawdat Bahgat’s American Oil Diplomacy in the Persian Gulf and the Caspian Sea (2003) is a revealing work -- especially because once again America finds itself agonizing over political access to the Persian Gulf’s oil and security of its supply.

The insignificant contribution of the much-ballyhooed Caspian Sea oil makes the present U.S. need for Arab oil all the more urgent. With Iranian oil being embargoed by the United States and the Iraqi oil not quite on line, the U.S. dependence on Saudi and Venezuelan oil is even greater.

In six meticulously researched chapters, Bahgat plumbs the United States’ insatiable and unapologetic appetite for foreign oil and gas. The first two chapters repeat an enormous amount of petroleum and other energy data about the U.S. and the world at large -- variety of fuels, reserves and supply, demand and production, and investment and price. The next three chapters focus on the U.S. energy relations with the premier oil-producing region of the world, the Persian Gulf, which the author calls (p. xi) “the main reservoir” and (p. 173) which “occup[ies] the driver’s seat in meeting the growing world demand.”

The issues of access to the Persian Gulf oil and security of supply are explored in the context of the U.S. energy relations with Saudi Arabia (ch. 3) and Iraq (ch. 4) and non-relation with Iran (ch. 5). With respect to Iraq, the book’s publication date precluded discussion of the effect of Operation Iraqi Freedom and President Bush’s crusade of “democracy in the Middle East” on the global energy situation in the long term.

The last chapter is dedicated to the subject of “Geopolitics of the Caspian Sea.” The author concluds that while the Caspian oil and gas reserves enhance the global supply picture, the introduction of Caspian oil and gas into the consumption cycle would be gradual and slow because of structural and market limitations on production, transportation, internal rates of return on capital investment, and discord among the riparian countries. There is however little analysis or assessment of the role of China as the major importer of Caspian oil and gas -- the more China imports from the Caspian region there will be less to go around for the U.S.

There is an implicit conclusion on the part of Bahgat that for Washington the road to security of oil supply should pass through Tehran, as it is the one Persian Gulf country that abuts also the Caspian Sea. While Iran itself has not shown to have much in the way of oil reserves off its Caspian shore, the country may offer a desirable outlet for the oil that is produced by the other Caspian countries through swaps and/or pipeline traffic.

To pave the way for an eventual opening with Iran, in chapter five, Bahgat prescribes the lifting of the American sanctions against Iran (p. 139). He argues that this removal of the barrier to trade and investment makes sense also as a matter of globalization and efficient allocation of economic factors of production. For a comprehensive if not excellent dissertation on the U.S. sanctions on Iran, see Hossein Alikhani, Sanctioning Iran: Anatomy of a Failed Policy (2000).

In the context of bilateral rapprochement between Iran and the United States, the author sees the Iranian hostility toward the United States less of an issue because unlike in the 1980s the Iranian government has less need for anti-Americanism as a source of internal legitimacy (p. 139). In this assessment the author mistakes legitimacy for purpose; hostility to the United States, by the clerical government or previously by the secular nationalists is a purposeful and informed Iranian reaction to half-century of perceived injustice perpetrated by the United States -- and in its sentiment it is arguably no less potent than the anti-Americanism which brewed among the secular Iranian nationalists before the Islamic revolution.

Regardless, the author states (p. 139), “Iran has always been a major player in the global energy market.” Because oil and gas are fungible commodities, easily allocated on paper, Iran need not be a direct bilateral player in the U.S. energy market and that fact has and will continue to render less urgent the need on the part of successive U.S. administrations to normalize relations with Iran simply for the sake of oil and gas.

My sole disappointment with the book was its readability. The difference between tapestry and patch-quilt is that the former is created from the weaving of elemental threads and the latter is sewn from more or less independent pieces. While in the former, the internal cohesion of the work is more an intrinsic byproduct of the creator’s effort; in the latter the unity of the work requires something more than just slapping a number of parts inside a forced framework with a catchy and all encompassing title. Bahgat’s American Oil Diplomacy is of the second variety.

Nevertheless, I look at Alikhani's volume as a valuable primer on economics and geopolitics of oil. Diplomacy and diplomatic history, on the other hand, are not what this book is about, nor does the author claim the contrary (p. xi), the misleading title notwithstanding.

About
Guive Mirfendereski is VP and GC at Virtual Telemetry Corporation since 2004 and is the artisan doing business as Guy vanDeresk (trapworks.com). Born in Tehran in 1952, he is a graduate of Georgetown University's College of Arts and Sciences (BA), Tufts University's Fletcher School (PhD, MALD, MA) and Boston College Law School (JD). He is the author of  A Diplomatic History of the Caspian Sea (2001) >>> Features in iranian.com