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OPEC in the
crosshairs
By Ehsan Ahrari
The issue of oil adds a new twist to that old
adage, "Blood is thicker than water." That twist is "oil
is thicker than either". Understanding a comprehensive
picture of why the United States wants to invade Iraq,
why the Saudi government continues to remain ambivalent
about letting the Americans use its military facilities,
and why Qatar and Kuwait are willing to play a role in
the impending invasion of a "sister" Arab state, it is
safe to say, it's about oil.
Or, more to the
point, it's about crippling OPEC.
Let's examine
some facts. According to the Alternate Energy Institute,
Saudi oil reserves are at 261.5 billion barrels (25.5
percent of the total world); Iraq 112.5 billion (10.8
percent); Kuwait 96.5 billion (9.3 percent); Iran 93
billion (9 percent); and Venezuela 71.7 billion (6.9
percent). No two sources would quote the same figures,
given the prevailing nature of international oil prices
at the time of reporting, but keeping that in mind,
there is little doubt that the aforementioned countries
loom largely in any calculations over the future
availability of oil. Even in terms of estimates of
"undiscovered" oil, Middle East and North Africa top the
list. In those regions, that estimate is about 230
billion barrels of oil and 1370 TCF (trillion cubic
feet) of natural gas (35.4 percent and 29.3 percent of
the world, respectively).
Of the aforementioned
major sources of oil, the US has considerable amount of
influence in all countries, save Iran and Iraq.
Venezuela, a major source of US oil supplies, is
undergoing turbulence, which has pretty much crippled
its oil industry. The US is not only watching that
situation intently, it is also playing an important
behind-the-scenes role in managing and calming it. Iraq
will enter the circle of US supplicant states once
Saddam Hussein is removed through military invasion. The
US oil companies are counting on it.
Iran has
not been a major force for radical increases in oil
prices in the past decade or so. That is a major
departure from that country's oil policies during the
reign of the Shah Mohammad Reza Pahlavi in the 1970s.
So, as long as the Damocles sword of a threat of regime
change hangs over the head of the Iranian government,
its oil policy will not be a source of major concern for
Washington. Besides, a supplicant Iraq will fulfill all
US needs for lowered prices and heightened production,
especially under the supervision of American
administrators of that country.
Consider also
two scenarios involving Iran and Saudi Arabia. First,
even if Iran does not become the next target of regime
change by the US, Iran is likely to become very careful
about its own nuclear and missile production programs
after a military invasion and occupation of Iraq.
Despite the fact that the government of the Islamic
Republic of Iran has been reiterating its intentions
related to the peaceful use of nuclear energy, the
administration of President George W Bush is not likely
to pay much attention to such claims. The North Korean
claim that it has a nuclear weapons program has become a
source of enormous anguish for Washington. Its level of
tolerance for the flirtation of another member of the
so-called axis of evil with nuclear program is likely to
be very low. So, the pressure on Iran is likely to
intensify in the coming years, especially after a regime
change in Iraq.
Second, after a regime change in
Iraq, it will be easier for the United States to apply
pressure on the Organization of Petroleum Exporting
Countries (OPEC) to keep its production and pricing
policies in check. The Iraqi oil reserves may always be
used to break the traditional aspirations of OPEC to
"manage" world oil prices. Even though that
organization's capabilities to fluctuate those prices
have not been significant for the past two decades, the
US remembers only too well the hardships of the 1970s
(the so-called petroleum decade) that the economies of
the industrial nations had encountered, and how hard it
was for them to recover from an economic slump stemming
from OPEC's pricing policies.
Oil is also a
major reason why the Saudi monarchy has maintained its
uneasy partnership with the Washington. The very basis
of this partnership of many decades ago - that
materialized during the 1945 historical meeting between
President Franklin Delano Roosevelt and King Abdel Aziz,
the legendary founder of the Saudi dynasty - was that
the Saudis pledged to ensure the availability of oil at
a reasonable price. In turn, the US guaranteed the
survival of the monarchy from outside threats. Needless
to say, both sides stuck to their respective sides of
that bargain. Even during the oil decade, the Saudis
maintained their promise, and often remained the lone
voice of moderate increases, while Reza and other "price
hawks" of North Africa were undermining the Saudi
moderation by introducing periodic price escalations
throughout the 1970s. Most recently, Washington
demonstrated its resolve to defend Saudi Arabia when
Saddam invaded and occupied Kuwait in 1990 and was
seemingly posturing to advance toward Saudi Arabia.
Even now, Saudi Arabia serves as a voice of
moderation in oil pricing. It has been effective in that
role largely because it is capable of wielding the
ultimate weapon: its role as a "swing producer". What
that means is, under major international oil supply
shortages stemming from whatever emergency related to
one or more major oil producing country, Saudi Arabia
has the capacity to introduce major escalations in its
production levels to calm global oil prices. That
country has used that power during the 1970s and has
promised to use it again. Its current production rate
stands around 8 million barrels per day (bpd), but it
has promised to increase it to over 10 million bpd, if
or when needed. From the US perspective, that is a major
source of reliability, considering Saudi past
performance.
In turn, the US continues to serve
as a source of regime stability for Saudi Arabia. No one
knows that fact more than the Saudi autocrat. The
religious puritanism of their polity is such that the
government is never sure how stable it is going to be at
a given time. Even when internal threats to regime
survivability are minimum, it still wants that
"external" guarantee of regime stability. The religious
zealots in that country also know that. That may also be
just one more reason why the US is so resented within
that country.
For Kuwait, a regime change in
Iraq will be a major source of comfort. But notice how
quiet that emirate has been regarding the issue. One
reason may be the presence of al-Qaeda sympathizers
within its borders. My sources tell me that Kuwaitis are
very double-minded about the proposition of toppling
Saddam. In principle, they cannot agree more with such
happenstance. However, they remain very worried about
Washington's intentions regarding Iraq. They are
concerned about the remote possibility of dismemberment
of their neighboring state between Iran and Turkey. In
addition, they are wary that a potential occupation of
their Muslim neighbor by a Christian country will not at
all bode well for the region. In fact, they are sure
such a prospect will be highly deleterious for their
neighborhood.
The oil reserves of Qatar are
reported to be about 15.2 billion barrels. As a state
that is likely to serve as one of the major launching
pads in the impending US invasion of Iraq, it is hard to
fathom that state's motives. Even though US forces are
being deployed at the al Udeid airbase (near Doha) and a
very sophisticated operation center is also being built
by US forces, the standard line that the officials of
the Qatari government are feeding to the media and to
their own people is that they have not been approached
by the US government about the use of their emirate as a
launching pad.
For Qatar, the motives are not
related to oil, but may be about geopolitics. Qatar is
in the process of developing its regional niche, which
includes independence from Saudi domination, good ties
with Iran, and making continuing progress toward
evolving into an open system, or even a constitutional
monarchy. Its GDP growth for 2002 was approximately 3.8
percent, and inflation in that emirate remains
relatively low, around 2.8 percent for 2002. However,
given the intense anti-Americanism that currently
prevails in the region, Qatar faces a possibility of
poisoning its domestic environment by becoming a major
conduit for the US presence in the region.
Ehsan Ahrari, PhD, is an Alexandria,
Virginia, US-based independent strategic analyst.
(©2003 Asia Times Online Co, Ltd. All rights
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