Home Page
Fiction and Poetry
Essays and Reviews
Art and Style
World and Politics
Montreal
Archive
 

***

CAN AMERICA'S OIL BOOM FREE IT OF PERSIAN GULF?

***

By Steve Yetiv

***

The Montréal Review, December 2012

***

"Crude Awakenings: Global Oil Security and American Foreign Policy" by Steve Yetiv (Cornell University Press, 2010) 

***

"This is an excellent book that goes against the grain of much of today's thinking. It is a rare example of superb integration of domestic politics, geopolitics, international politics, and market economics. Steve A. Yetiv sheds light on an important subject that pertains to the largest single sector of global trade and the locus of two very large wars fought by the United States over the past dozen years."

--Edward L. Morse, former Deputy Assistant Secretary of State for International Energy Policy

"Crude Awakenings is a fine piece of scholarship that enhances our understanding of global oil security."

--Joseph S. Nye, former Assistant Secretary of Defense

***

America is in the midst of an energy boom that has helped decrease its dependence on foreign oil significantly. A recent report by the International Energy Agency even concluded that the United States will displace Saudi Arabia - even if temporarily - as the world's largest oil producer by 2020. Current U.S. oil imports of around 9-10 million barrels/day are projected to fall to around 4 million b/d within one decade.

But, if that does occur, what would it mean for U.S. foreign policy? In particular, could America withdraw from the oil-rich Persian Gulf? That's an interesting question because the United States has fought two big wars there and spends between $40 to $50 billion a year, not including the Iraq war costs, to protect the free flow of oil, mainly. That expenditure exceeds the entire military budgets of all but a few countries and taxes America's already massive national deficit.

Unfortunately, America's growing oil power, while positive in many ways, is not likely to allow an easy withdrawal from the Gulf. Why so?

For starters, even if the United States used little oil, it would still have other strategic interests in the Gulf such as containing nuclear proliferation. For instance, regardless of oil, it would not want Iran to go nuclear due to Iran's anti-Americanism, threat to Israel and Arab countries, and connections to groups on America's terrorist list.

More importantly, while America's oil boom is decreasing dependence on foreign oil, it is not decreasing dependence on oil in general. Americans have been consuming more oil over the past decades. Such oil dependence makes the United States vulnerable to global oil markets where the price of oil is determined by oil traders. Even if the United States received no oil from the Persian Gulf, any serious disruptions of oil from that region would raise the price of oil (and derivatives like gasoline) for all Americans. And an American withdrawal would make it harder to prevent or contain such disruptions, because Washington has played the role of regional gendarme since the British relinquished that role in 1971.

Let's also bear in mind that global dependence on Persian Gulf oil will only rise in the future because it holds two-thirds of the world's oil reserves. As the rest of the world peaks in the production of easily and cheaply recoverable oil, those Gulf reserves will become more vital. That suggests that events in the region may become more disruptive to oil prices over time.

We should also consider that even if the U.S. displaces Saudi Arabia in overall oil production (as Russia often does), it will not become a swing producer with an extra oil capacity cushion, which can stabilize markets. In the end, Washington will still depend on Saudi spare capacity, which accounts for 70 percent of global spare capacity, to make up for lost oil due to a global oil crisis, unless it wants to tap significantly the U.S. Strategic Petroleum reserve which at present contains around 700 million barrels.

Some people think that the oil boom could allow for quickly and safely accessible oil in a time of a massive global oil disruption. Perhaps, but even that would require that American oil companies cooperate with Washington. Indeed, America is not like Saudi Arabia or many other foreign countries because its oil companies, like Exxon, are private rather than government owned. Washington cannot order its oil companies to save their oil just for Americans or to stave off foreign oil disruptions. These companies put their oil on global oil markets and live by profit motives.

Washington may be able to, and should try, to leverage its growing oil power to persuade other countries to pay their fair share for protecting the Gulf, even if such leverage is weakened by others knowing that America can't easily leave the Gulf. China, Japan, and European countries should do far more to help finance the American-led security effort, because they are far more dependent on Persian Gulf oil and because they benefit greatly from this role.

While the oil boom is positive for America, it is more important to decrease oil consumption than to increase oil production. Seriously decreasing consumption could help Washington diminish its commitments to the Persian Gulf, by making global oil prices less important to the American economy, and it would also address critical security questions of our age such as climate change and global terrorism.

***

Steve Yetiv is a political science professor at Old Dominion University and the author of The Petroleum Triangle (Cornell University Press, 2011), and The Absence of Grand Strategy (Johns Hopkins University Press, 2008). He can be contacted at: http://www.odu.edu/~syetiv/

***

The Petroleum Triangle: Oil, Globalization, and Terror (2011)

In The Petroleum Triangle, Steve A. Yetiv tells the interconnected story of oil, globalization, and terrorism. Yetiv asks how Al-Qaeda, a small band of terrorists, became such a real and perceived threat to American and global security, a threat viewed as profound enough to motivate the strongest power in world history to undertake extraordinary actions, including two very costly wars.

Yetiv argues that Middle East oil and globalization have combined to augment the real and perceived threat of transnational terrorism. Globalization has allowed terrorists to do things that otherwise would be more difficult and costly: exploit technology, generate fear beyond their capabilities, target vulnerable economic and political nodes, and capitalize on socio-economic dislocation. Meanwhile, Middle East oil has fueled terrorism by helping to bolster oil-rich regimes that terrorists hate, to fund the terrorist infrastructure, and to generate anti-American and anti-Western sentiments about American support for oil-rich regimes and perceived Western designs on Middle East oil. Together, Middle East oil and globalization have combined in various ways to help create Al-Qaeda's real and perceived threat, and that of its affiliates and offshoots. The combined effect has shaped important contours of the Petroleum Triangle and of world affairs.

--Cornell University Press

***

The Absence of Grand Strategy: The United States in the Persian Gulf, 1972-2005 (2008)  

Great powers and grand strategies. It is easy to assume that the most powerful nations pursue and employ consistent, cohesive, and decisive policies in trying to promote their interests in regions of the world. Popular theory emphasizes two such grand strategies that great powers may pursue: balance of power policy or hegemonic domination. But, as Steve A. Yetiv contends, things may not always be that cut and dried.

Analyzing the evolution of the United States' foreign policy in the Persian Gulf from 1972 to 2005, Yetiv offers a provocative and panoramic view of American strategies in a region critical to the functioning of the entire global economy. Ten cases-from the policies of the Nixon administration to George W. Bush's war in Iraq-reveal shifting, improvised, and reactive policies that were responses to unanticipated and unpredictable events and threats. In fact, the distinguishing feature of the U.S. experience in the Gulf has been the absence of grand strategy.

Yetiv introduces the concept of "reactive engagement" as an alternative approach to understanding the behavior of great powers in unstable regions. At a time when the effects of U.S. foreign policy are rippling across the globe, The Absence of Grand Strategy offers key insight into the nature and evolution of American foreign policy in the Gulf.

-- The Johns Hopkins University Press 

***

 
 
 
 
 
Copyright © The Montreal Review. All rights reserved. ISSN 1920-2911
about us | contact us