The West’s – Or Obama’s – Oil Weapon
By
Tsvi Bisk
Contact information: bisk@futurist-thinking.co.il or 972-558-7940
Oil has become a double edged sword. It can now be wielded against the oil producing states as much as be wielded by them. More specifically the West can use oil to neutralize Iran’s nuclear threat without military action. Accepted wisdom posits that Iran is immune to serious sanctions because it is a major oil exporter and forceful steps taken against it would increase oil prices and destabilize the world economy. This is not the case.
The West has a medium term strategic trump card – the strategic reserves of the International Energy Agency (IEA). It also has a short term tactical advantage – redundant production capacity caused by the economic turndown.
The International Energy Agency and its constituent members have four billion barrels of oil in strategic reserves. This enables them to release two and a half million barrels a day onto the market for a period of four years. This would make possible the boycotting or disabling of Iranian oil production.
Iran could not finance its nuclear program without the revenues of two and a half million barrels of daily oil exports. Nor would its sociological and cultural character permit it to starve its people to continue the program (unlike North Korea).
Iran also imports 30%-40% of its refined oil products and uses over half its petrodollars to subsidize and keep afloat various aspects of its failed economy. A reverse oil embargo could collapse this sordid regime enabling its modern, essentially pro-western younger generation to take over their country. At the least it would render the present regime geo-politically impotent.
The question is do the IEA’s strategic reserves exist only to ameliorate a strategic oil supply interruption or can they be used to disrupt the much greater potential Iranian nuclear threat to the long term security of the West?
This is an issue that relates both to the Middle East peace process and the potential for nuclear war. The simple fact is that Israel cannot and will not tolerate Iran getting the bomb, diplomatic casuistry notwithstanding. An Iranian regime constantly threatening the very existence of Israel, in possession of an atomic bomb and missiles capable of delivering an atomic warhead would be a global “Sum of All Fears”. An atomic attack on Israel would kindle a response that would endanger 70% of the world’s known oil reserves.
Recent reports indicate that Israel is already employing various gambits to hinder Iran’s nuclear program – from straw companies selling the Iranians inferior parts to assassination of key players in the Iranian nuclear program. Israel understands that military action against Iranian nuclear facilities is almost impossible, given that development installations are dispersed in hundreds of sites.
Attacking a couple of Iranian oil ports (overtly or covertly) would be much easier and deductive logic dictates that this is being seriously discussed in Israeli intelligence circles.
The caveat to such a gambit is obvious – it would constitute a major de-stabilizing event in the Persian Gulf. A United States led embargo on Iranian oil exports is the much preferable option.
To be sure Iran would probably react by intimidating its Gulf neighbors and the subsequent psychological impact might drive up prices to 60-70$ a barrel. But since most energy analysts agree that we are headed for supply shortfalls and 150$ a barrel oil by 2011-12 this might even be beneficial. This so-called “slingshot effect” would be less damaging if it took place from a 70$ base than from a 35$ base.
The political benefits could be even more far-reaching if we turn another piece of accepted wisdom regarding Middle East peace on its head. Most “experts” advocate the following. First Israel and the Palestinians make peace. This would facilitate a Syrian-Israeli peace deal, which would neutralize Syrian aid to Hamas and Hezbollah weakening the influence of Iran.
The reverse order might be more productive. Emasculating the economic power of Iran would weaken Syrian militancy and starve Hamas and Hezbollah. Syria would become even more amenable to a politically doable peace deal with Israel, while weakening Hamas would strengthen the Palestinian Authority and reassure Israel, enabling both to enter into serious negotiations towards a two-state solution.
There is a fundamental question in regards to the geo-political aspects of energy in the 21st century. What will characterize the West under the leadership of the United States – self-indulgence, or self discipline and self-reliance? Do we have the will to do what needs to be done or do we continue our obsequious groveling before oil blackmail and the Jihadist terror that petrodollars finance?
