By Mazhid Kat:
In 1945 Franklin Roosevelt was the first President to admit that the United States had become oil-dependent.[i] This occurred because the American government had introduced a ‘conservation policy’ aimed at reducing the production of domestic oil and saving reserves for future generations by substituting it with imports.[ii] As a result, Roosevelt and King Abdul Aziz Ibn Saud – of Saudi Arabia – signed the Quincy Pact, which included the promise of an American monopoly to develop oil fields in exchange for protecting Saudi Arabia from external threats.[iii]
During the Cold War period, the Persian Gulf represented an important region for US strategy against the Soviet Union.[iv] In order to contain Soviet influence in the area, the Truman Doctrine was elaborated,[v] followed by the Eisenhower Doctrine in 1957, which stressed the importance of the Middle East in terms of a global strategy against the expansion of ‘international communism’.[vi] For states like Saudi Arabia, the US became an ally, always willing to support resistance against any possible leftist advance, like the internal opposition in the Saudi royal family represented by the ‘Red Prince’ Talal bin Abdulaziz Al Saud in the 1960s, who was inspired to see Saudi Arabia developing in a similar way to Egypt with its Arab socialist ideology.[vii]
At the same time, Saudi Arabia (and its local satellites) and the US became the ‘ultimate frenemies’. This term points to the contradictions inherent in America’s relations with these states, specifically the tension between Wahhabism and American liberalism. Wahhabism is the religio-political movement that constitutes the basis of Saudi foreign policy. It is a doctrine which resists the idea of democratization and modernization; instead emphasizing the role of Islam in society. This principle is at odds with the democracy-promoting policies of Washington.[viii] Therefore, the American support for liberal values in the region has always been fighting against the ‘dark side’ of oil and security matters, which results in Washington opposing democratic changes, viewed as a threat to the status quo in the Persian Gulf.
At the beginning of the 21st century, President George Bush uttered a famous phrase: ‘America is addicted to oil’.[ix] Although the major U.S. oil suppliers are in the Western Hemisphere, the Persian Gulf countries accounted for about 25% of the total U.S. crude oil imports in 2013.[x] In addition, Saudi Arabia provided discounts on oil for the U.S., amounting to $8.5 billion from 1991 to 2003.[xi] Partly as a result of this, currently U.S. troops are deployed in Kuwait (13,021), Bahrain (3,227), Qatar (592), Saudi Arabia (332), United Arab Emirates (313), Egypt (267) and Iraq (750).[xii] However, in recent years domestic oil production in the United States has significantly increased as the result of the shale revolution.
During Obama’s tenure in office, large shale oil deposits have reduced America’s dependence on Middle Eastern oil, gradually eliminating the need for such a considerable military presence to help their Gulf allies. This has provided Washington with greater flexibility in its relations with the Gulf monarchies to solve the conflict with Iran. Sanctions have led to Iran showing a willingness to let observers inspect their nuclear facilities in exchange for the supply of uranium being enriched to 20%.[xiii] This means that the United States may accept the ‘threshold status’ of Iran, which would be an important milestone in the thawing of relations between the two countries.
Above all, the shale revolution alleviates American dependency on foreign oil: imported fuel now accounts for 30% of overall oil consumption compared to 60% in 2005.[xiv] The U.S. government has minimized risks of exogenous oil shocks, and so the recent turmoil in the Middle East did not significantly affect oil prices.
Nevertheless, the new trends in the oil industry are not all rosy for the USA. American oil reserves constituted only 2.6% of the world’s total reserves at the end of 2013,[xv] suggesting that the shale revolution will not completely eliminate American energy dependency. That is part of the reason why the US-Saudi coalition has neither been weakened, nor strengthened, by the Shale revolution.
In addition, Washington still needs the support of Riyadh to affect the global oil market through its domestic production and alliance with Saudi Arabia. Some experts argue that the recent drop in the oil price level is an American attempt in cooperation with the Saudis to put pressure on Russia and Iran.[xvi] (This was discussed in Strife a couple of weeks ago.) That is what happened in 1985 when Saudi Arabia increased oil exports from 2 million barrels per day to 10 million, dropping the price from $32 to $10 per barrel. As a result, the Soviet economy lost approximately $20 billion per year.[xvii] This development undermined the ability of the USSR to continue its anti-Western strategy. Another example is when the United States used energy supplies as a mechanism of control over Japan during the Cold War. The ability to manage oil exports to Japan was a unique method of imposing restrictions on Japanese industrial and military policy.[xviii]
Part of the reason why Washington wants to maintain its strong influence in the Persian Gulf is to secure diminishing but still substantial oil imports. But, most importantly, retaining the ability to affect the global oil market represents a tool to increase the bargaining power of Washington in relation to Moscow and Tehran. Of course, Russia and Iran are quite sustainable today, but the continuing trend of low oil prices can weaken their positions.
At the same time, oil can be used by the American government to improve internal governance, civil rights and increase transparency in the Islamic monarchies, thanks to the increased flexibility over the issue of oil supplies. This can shrink the social base for terrorist organizations, which often emerge in response to petro-dictatorships. It is a crucial measure against transnational terrorism because, for example, the majority of hijackers on 9/11 terrorist attack were Saudis. Although they were not working from within Saudi Arabia, they were members of al-Qaeda, and as Hilary Clinton indicated in 2009: “Saudi Arabia remains a critical financial support base for al-Qaida, the Taliban, LeT and other terrorist groups”.[xix] The only question is whether the current administration is willing to begin a transformation to make its allies in the Gulf more democratic and to eliminate the ‘dark side’ of its foreign policy.
Mazhid Kat is an MA student on the International Political Economy programme at King’s College London. His research interests include the political economy of the Middle East and the Post-Soviet region.
[i] Colin S. Cavell, America’s dependency on Middle East oil, Global Research, April 11 2012 http://www.globalresearch.ca/america-s-dependency-on-middle-east-oil/30177
[ii] Wallace F. Lovejoy, Oil conservation, producing capacity, and national security, Natural resources journal, January 1970
[iii] Louisa Dris-Aït-Hamadouche and Yahia H. Zoubir, The US-Saudi relationship and the Iraq war: the dialectics of a dependent alliance, Journal of Third World Studies, 24(1), 109-135, Spring 2007
[iv] Michael J. Butler, U.S. Military Intervention in Crisis, 1945-1994: An Empirical Inquiry of Just War Theory, The Journal of Conflict Resolution, 47(2), 226-248, April, 2003 http://www.jstor.org/stable/3176168
[v] Pierre Tristam, The Truman Doctrine and the Middle East, About.com http://middleeast.about.com/od/usmideastpolicy/a/truman-doctrine-explained.htm
[vi] Salim Yaqub, American Orientalism: The United States and the Middle East since 1945, by Douglas Little, Reviews in American History, 31(4), 619-625, December 2003 http://www.jstor.org/stable/30031381
[vii] Sandra Halperin, The Post-Cold War Political Topography of the Middle East: Prospects for Democracy, Third World Quarterly, 26(7), 1135-1156, 2005 http://www.jstor.org/stable/4017808
[viii] Febe Armanios, The Islamic Traditions of Wahhabism and Salafiyya, CRS Report for Congress, December 22, 2003
[ix] Michael T. Klare, Blood and oil, Media Education Foundation, 2008 https://www.mediaed.org/assets/products/124/presskit_124.pdf
[x] U.S. Energy Information Administration (EIA), http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbbl_a.htm
[xi] Jennifer R. Peck, Do Foreign Gifts Buy Corporate Political Action? Evidence from the Saudi Crude Discount Program, Job Market Paper, 1-51, October 2012
[xii] Total Military Personnel and Dependent End Strength By Service, Regional Area, and Country, Defense Manpower Data Center, 2014 https://www.dmdc.osd.mil/appj/dwp/getfile.do?fileNm=SIAD_309_Report_P1406.xlsx&filePathNm=milRegionCountry
[xiii] Iran dilutes enriched uranium stockpile, Aljazeera, July 21, 2014 http://www.aljazeera.com/news/middleeast/2014/07/iran-dilutes-enriched-uranium-stockpile-201472111930102600.html
[xiv] Christian Berthelsen, U.S. Oil Exports Would Lower Gas Prices, Government Report Says, Wall Street Journal, October 20, 2014
[xv] BP Statistical Review of World Energy 2014, British Petroleum http://www.bp.com/content/dam/bp/pdf/Energy-economics/statistical-review-2014/BP-statistical-review-of-world-energy-2014-full-report.pdf
[xvi] Thomas L. Friedman, A Pump War?, The New York Times, October 14, 2014 http://www.nytimes.com/2014/10/15/opinion/thomas-friedman-a-pump-war.html?ref=opinion&_r=1
[xviii] Noam Chomsky, After the Cold War: U. S. Foreign Policy in the Middle East, Cultural Critique, No. 19, The Economies of War, pp. 14-31, Autumn, 1991
[xix] Declan Walsh, WikiLeaks cables portray Saudi Arabia as a cash machine for terrorists, The Guardian, December 5, 2010 http://www.theguardian.com/world/2010/dec/05/wikileaks-cables-saudi-terrorist-funding