So what rank have you decided to give to Iraq?
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The Big Irony: Osama May Yet Oust the Yanks From Arabia
They say it’s about religion and social values, and it is. But ultimately this “crusade” is about
oil and the way the West defends its Arab oil supply militarily.
Ernest S. McCrary
One of Osama bin Laden’s complaints that resonates in the Islamic world and wins converts to his terror
tactics is his anger that US troops are based in Saudi Arabia---and have been for more than a decade.
They are there to protect Western access to Saudi oil and to shore up a fragile royal family that has been
accommodating to the West since King Ibn Saud’s government signed the country’s first exploration and
production contract with Standard Oil of California in 1933.
Today’s fighting in Afghanistan is different from the Gulf War of 1990–1991 because America has been
attacked, and the confrontation has been justified by both bin Laden and President George W. Bush on
opposing religious and moral grounds. But the real issue is still oil, just as it was when Saddam Hussein
invaded Kuwait and when the big (mostly Arab) oil exporters cut production in 1973 and boosted prices
from $3 to $12 a barrel within months.
The United States imported 33% of its oil in 1973, but today more than 50% comes from abroad. In 2001
the United States imported an average of 2.6 million barrels per day from Arab OPEC countries—a quarter
of all crude oil imports. Yet some studies show that if the United States had continued to conserve oil as it
did during the late 1970s and early 1980s, there would have been no need to import Persian Gulf oil by
1985. The price of this vulnerability is huge.
Before the war the United States was already spending a third of its $300 billion annual defense budget on
keeping the Persian Gulf safe for oil transport to the West. And oil is by far the largest part of the staggering
$370 billion annual US trade deficit.
One step toward ending this lunacy is to reduce domestic consumption by mandating auto and truck
makers to produce more efficient engines, and to promote the development of alternative energy sources
such as ethanol from biomass and hydrogen from fuel cells. Such a program might even kick-start a
recovery of the US economy.
Another is to boost domestic drilling and diversify the foreign sources of US oil supply. That explains in part
President Bush’s ardent new friendship with Vladimir Putin, because Russia is the most likely large
alternative supplier of oil to the world. Oil, mostly from Siberia, already accounts for 25% of Russia’s
exports and finances 15–20% of the government’s budget. Russia refuses to join OPEC and won’t play the
cartel’s production controls games aimed at reversing recent price declines.
This brings us to the true oil play now at stake in Afghanistan. The world’s largest known oil
deposits—even larger than Saudi Arabia’s 262 billion barrels—are in the Caspian and Central Asian
region, controlled by Russia and the “Stans.” But before large amounts of this 270-billion-barrel reserve
can be sold anywhere, the oil and gas have to be transported by pipeline to adequate and safe ports. The
shortest and best route, technically, is across Afghanistan and Pakistan to the Arabian Sea, although other
routes have their proponents.
The Osama Irony
It’s ironic that Osama bin Laden has done Russia, the United States, and other big Western oil consumers
a favor by giving them a pretext to clean out the shaky and hostile Taliban regime in Afghanistan.
Furthermore, this is being done with the help of the newly “cooperative” military government in Pakistan that
until now had been another obstacle to Western investment.
This opening to Caspian oil could break the back of OPEC and reduce the dependence of the United
States and other Western powers on Arab oil—and their military presence there.
So in the end Osama bin Laden may win what he said he wanted most: the removal of American forces
from Saudi Arabia. But unless the United States changes its import-dependent energy policy, it will remain
just as vulnerable to the next plot that endangers its foreign supply lines—from the Caspian region or
wherever.
Ernest S. McCrary is the executive editor of Global Finance.
E-mail: emccrary@gfmag.com |
