The ‘True’ Power Of Oil
The world has shown its citizens the phenomena of ‘equilibrium’ and its alter ego ‘disequilibrium.’ Scientists have argued that nature is in equilibrium and mathematically in balance. In essence, nature strives to achieve equilibrium with what is naked to the human eye as well as what can actually be seen.
On the other hand however man-made creations are not ‘in balance.’ Societies, institutions, governments and socio-political systems are far from being well poised, transparent and efficiently functioning. Whatever has been created by a mortal has failed to attain nature’s impeccable perfection.
This is the certainly philosophical and in order to fully convey its essence, a pragmatic approach must be taken and an example illustrated.
‘Power politics’ (a man-made creation) refers to the military or economic threat used by nation-states to further their own interests. History has shown an abundance of examples, most notably the Cold War.
Nevertheless, the irony of power politics is that contrary to the semantics of its name, there is an ‘implicit’ balance between the major powers of the world. The US has the world’s largest and strongest army and economy par none however its feebleness has recently came to the public sphere through its incredible reliance on a non-renewable energy source:
Oil.
The world’s economy relies heavily on oil however the US has (more than other country) revealed that it would take massive strides to secure a sufficient supply for its own health. The oxymoron in ‘power politics’ is that the US might not be as powerful after all. If one closely examines the list of the top oil producers in the world, an obvious yet nonetheless peculiar observation is made.
The following are the top world oil producers in 2004 ( OPEC members are in italic):
1) Saudi Arabia
2) Russia
3) United States
4) Iran
5) Mexico
6) China
7) Norway
8) Canada
9) Venezuela
10) United Arab Emirates
11) Kuwait
12) Nigeria
13) United Kingdom
14) Iraq
The following are the world’s top oil net exporters in 2004:
1) Saudi Arabia
2) Russia
3) Norway
4) Iran
5) Venezuela
6) United Arab Emirates
7) Kuwait
8) Nigeria
9) Mexico
10) Nigeria
11) Iraq
12) Libya
13) Kazakhstan
14) Qatar
The countries aforementioned are all in the ‘watch-eye’ of the United States because of their oil producing and exporting capabilities. Here is a quick and succinct summary of their relationship with the US:
Saudi Arabia: US ally
Russia: US ally with reservations and differences
Iran: US enemy and member of the ‘Axis of Evil’
Mexico: US ally
China: US pseudo-ally with reservations and differences
Norway: US ally
Canada: US ally
Venezuela: US enemy
United Arab Emirates: US ally
Kuwait: US ally
Nigeria: US ally
UK: US ally
Iraq: Occupied by the US, unclassified
Algeria: US ally
Libya: Recent US ally
Kazakhstan: US ally
Qatar: US ally
Here is a more detailed alliance analysis with a categorical numerical value (1 = staunch ally and 8 = staunch enemy).
Category 1: The UK, Norway and Canada can be categorized as staunch US allies. They are developed countries with economic and social systems similar to that of the US.
Category 2: Mexico can be categorized as a close ally. President Vicente Fox and President Bush have had their differences especially regarding the recent illegal immigration debacle and Mexico’s role in illegal cross-border immigration in California.
Category 3: Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Nigeria and Kazakhstan can be categorized as allies. As much as Saudi Arabia has aided the US in the first and second Gulf wars, the majority of the 9/11 perpetrators were of Saudi origin. The extreme doctrine of Wahabism has bred Muslim militant extremists. Moreover, there have been numerous attacks on US property within Saudi borders and there continues to be extreme misunderstanding of both countries’ respective cultures. The Arab countries are in essence mini US strongholds in the Gulf. The US has struck business deals with all four countries and has troops stationed in all of them.
Category 4: Russia can be categorized as an ally on paper. A recent US News article about the G8 summit has revealed the many differences which continue to exist between both countries. Russia supports Hamas and has had diplomatic talks with Iran. In fact, Russia has offered to enrich uranium for Iran so that it could avoid any tensions and confrontations with the US. President Vladimir Putin is pro-democracy and anti-communist yet as Yuri Levada (Russia’s preeminent pollster) said, “we have democracy on paper. We hold elections and have a parliament, but there is no debate.”
Category 5: China is in civil and diplomatic relations with the US. China remains communist, the antithesis of democracy and of the principles of the US government. There exists an abundance of differences between the two countries and with the ever-growing Chinese population and burgeoning economy China is certainly more of a threat to the US than it is a friend.
Category 6: Libya and Algeria can be categorized as marginal allies. The US recently restored relations with Libya however the relationship is in its nascent stages. This was a strategic move by the US as the markets responded positively and oil prices decreased amid mediocre economic and inflation forecasts once Libya was removed off of the terrorist list.
Category 7: Venezuela can be placed as an outright US enemy. Venezuelan President Hugo Chavez has gone on numerous rants against the US and the US deeply criticizes his dictatorial methods of ruling his country. There continues to be tension but the US has not threatened to use force against the country however has placed numerous sanctions in the past.
Category 8: Iran is the prime US enemy at this point. Iran is a member of the ‘Axis of Evil’ (along with Iraq and North Korea) and continues to be a threat to the US because of its enrichment of uranium and its ‘alleged’ aspirations to develop nuclear weapons.
Category 9: Iraq will remain unclassified for now. The new government is obviously pro-US (since it has been approved and backed by the US) however it has been completely incompetent in dealing with the ever rising sectarian violence between the Sunnis and the Shiites. Moreover, the country is in complete social and political anarchy that it is too early to decide its ultimate outcome – i.e. its perspective on its US and its position.
Categories 3-9 are problematic in varying degrees. The implicit balance in power politics (and irony for that matter) is that over 90% of the top oil exporting countries in the world are either/and/or:
1) Developing/ nascent economies
2) Socialist/pseudo-dictatorial
3) Political enemies of the US
4) Arab (along with all the negative connotations it entails)
5) Corrupt
6) Represent the anti-Christ of democracy, civil liberties and freedom of rights
7) Harbor terrorists, terrorist cells and religious extremism
8) Large human rights perpetrators
The US has attempted to deal with one country so far: Iraq. So far it has failed miserably. Are all these other countries under its nose? What is the US cooking for Venezuela? Will the US continue to turn a blind eye to Saudi Arabia’s repressive regime and the incredible record of human rights abuses? How will it face Chinese opposition in the future?
How hypocritical is US foreign policy?
It seems that the word ‘Oil’ trumps everything.
On the other hand however man-made creations are not ‘in balance.’ Societies, institutions, governments and socio-political systems are far from being well poised, transparent and efficiently functioning. Whatever has been created by a mortal has failed to attain nature’s impeccable perfection.
This is the certainly philosophical and in order to fully convey its essence, a pragmatic approach must be taken and an example illustrated.
‘Power politics’ (a man-made creation) refers to the military or economic threat used by nation-states to further their own interests. History has shown an abundance of examples, most notably the Cold War.
Nevertheless, the irony of power politics is that contrary to the semantics of its name, there is an ‘implicit’ balance between the major powers of the world. The US has the world’s largest and strongest army and economy par none however its feebleness has recently came to the public sphere through its incredible reliance on a non-renewable energy source:
Oil.
The world’s economy relies heavily on oil however the US has (more than other country) revealed that it would take massive strides to secure a sufficient supply for its own health. The oxymoron in ‘power politics’ is that the US might not be as powerful after all. If one closely examines the list of the top oil producers in the world, an obvious yet nonetheless peculiar observation is made.
The following are the top world oil producers in 2004 ( OPEC members are in italic):
1) Saudi Arabia
2) Russia
3) United States
4) Iran
5) Mexico
6) China
7) Norway
8) Canada
9) Venezuela
10) United Arab Emirates
11) Kuwait
12) Nigeria
13) United Kingdom
14) Iraq
The following are the world’s top oil net exporters in 2004:
1) Saudi Arabia
2) Russia
3) Norway
4) Iran
5) Venezuela
6) United Arab Emirates
7) Kuwait
8) Nigeria
9) Mexico
10) Nigeria
11) Iraq
12) Libya
13) Kazakhstan
14) Qatar
The countries aforementioned are all in the ‘watch-eye’ of the United States because of their oil producing and exporting capabilities. Here is a quick and succinct summary of their relationship with the US:
Saudi Arabia: US ally
Russia: US ally with reservations and differences
Iran: US enemy and member of the ‘Axis of Evil’
Mexico: US ally
China: US pseudo-ally with reservations and differences
Norway: US ally
Canada: US ally
Venezuela: US enemy
United Arab Emirates: US ally
Kuwait: US ally
Nigeria: US ally
UK: US ally
Iraq: Occupied by the US, unclassified
Algeria: US ally
Libya: Recent US ally
Kazakhstan: US ally
Qatar: US ally
Here is a more detailed alliance analysis with a categorical numerical value (1 = staunch ally and 8 = staunch enemy).
Category 1: The UK, Norway and Canada can be categorized as staunch US allies. They are developed countries with economic and social systems similar to that of the US.
Category 2: Mexico can be categorized as a close ally. President Vicente Fox and President Bush have had their differences especially regarding the recent illegal immigration debacle and Mexico’s role in illegal cross-border immigration in California.
Category 3: Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Nigeria and Kazakhstan can be categorized as allies. As much as Saudi Arabia has aided the US in the first and second Gulf wars, the majority of the 9/11 perpetrators were of Saudi origin. The extreme doctrine of Wahabism has bred Muslim militant extremists. Moreover, there have been numerous attacks on US property within Saudi borders and there continues to be extreme misunderstanding of both countries’ respective cultures. The Arab countries are in essence mini US strongholds in the Gulf. The US has struck business deals with all four countries and has troops stationed in all of them.
Category 4: Russia can be categorized as an ally on paper. A recent US News article about the G8 summit has revealed the many differences which continue to exist between both countries. Russia supports Hamas and has had diplomatic talks with Iran. In fact, Russia has offered to enrich uranium for Iran so that it could avoid any tensions and confrontations with the US. President Vladimir Putin is pro-democracy and anti-communist yet as Yuri Levada (Russia’s preeminent pollster) said, “we have democracy on paper. We hold elections and have a parliament, but there is no debate.”
Category 5: China is in civil and diplomatic relations with the US. China remains communist, the antithesis of democracy and of the principles of the US government. There exists an abundance of differences between the two countries and with the ever-growing Chinese population and burgeoning economy China is certainly more of a threat to the US than it is a friend.
Category 6: Libya and Algeria can be categorized as marginal allies. The US recently restored relations with Libya however the relationship is in its nascent stages. This was a strategic move by the US as the markets responded positively and oil prices decreased amid mediocre economic and inflation forecasts once Libya was removed off of the terrorist list.
Category 7: Venezuela can be placed as an outright US enemy. Venezuelan President Hugo Chavez has gone on numerous rants against the US and the US deeply criticizes his dictatorial methods of ruling his country. There continues to be tension but the US has not threatened to use force against the country however has placed numerous sanctions in the past.
Category 8: Iran is the prime US enemy at this point. Iran is a member of the ‘Axis of Evil’ (along with Iraq and North Korea) and continues to be a threat to the US because of its enrichment of uranium and its ‘alleged’ aspirations to develop nuclear weapons.
Category 9: Iraq will remain unclassified for now. The new government is obviously pro-US (since it has been approved and backed by the US) however it has been completely incompetent in dealing with the ever rising sectarian violence between the Sunnis and the Shiites. Moreover, the country is in complete social and political anarchy that it is too early to decide its ultimate outcome – i.e. its perspective on its US and its position.
Categories 3-9 are problematic in varying degrees. The implicit balance in power politics (and irony for that matter) is that over 90% of the top oil exporting countries in the world are either/and/or:
1) Developing/ nascent economies
2) Socialist/pseudo-dictatorial
3) Political enemies of the US
4) Arab (along with all the negative connotations it entails)
5) Corrupt
6) Represent the anti-Christ of democracy, civil liberties and freedom of rights
7) Harbor terrorists, terrorist cells and religious extremism
8) Large human rights perpetrators
The US has attempted to deal with one country so far: Iraq. So far it has failed miserably. Are all these other countries under its nose? What is the US cooking for Venezuela? Will the US continue to turn a blind eye to Saudi Arabia’s repressive regime and the incredible record of human rights abuses? How will it face Chinese opposition in the future?
How hypocritical is US foreign policy?
It seems that the word ‘Oil’ trumps everything.
posted by The Egyptian Observer at 2:14 PM
4 Comments:
Hi EO,
Whatevr the (oil) situation is, it's much better than it was in 73! Your list actually looks pretty promising to me :)
The situation with the USSR and China alone made things so much worse in past decades. As for venezuela... don't worry about Venezula (I'm not sure that you are, but if you are!) - the US has 200 years expereince dealing with Latin American dictators. Chavez will get just what the 437 before him got, when the time comes. If the time comes. And no, it probably won't involve an invasion, much as he'd like to see it :)
It's the countries of the middle east that pose a problem. But then, that's always been the case, has it not?
@programmer craig. The 1970s were certainly worse however this does not imply that things could not get worse today.
I am not skeptical however the list I provided includes many 'superficial' allies of the US - some with their own agenda. China and Russia clearly have their own agenda and won't accept being tramped upon by the US so that the latter could enjoy hegemony.
I am not afraid of Venezuela per se and it is certainly the Middle Eastern countries which are far more problematic at this point. Oil is America's Achilles' heel amid other things (i.e. al-Qaeda and its clandestine, insurgent style methods). Iran has threatened to use oil to blackmail the US and the markets immediately responded to such threats.
The situation is delicate yet currently under control. However, the US needs to be extremely cautious with its rhetoric. If they believe that Iran is irrational then the country will act irrationally only to hurt the economy of the US and send a pertinent message to the West.
Interesting analysis
but you know all these allies can be sell the United States if they get a higher price , money is money
it is wonderful anaylsis I wish that you wrote it last year so I could have used in my research in International business :)
@zeinobia. Money is certainly money however other countries would want the US to rely on their oil supplies so as to 'cripple' the US in a sense.
Many countries on the list could very well use oil as a blackmailing tool against the US. In fact, this is probably why the US invaded Iraq, to make sure that none of these countries can blackmail it since it will have its own ample supply of oil (through its invasion).
Oil proceeds will only create an emphemeral bubble of profit for many of these countries at this point. Once oil supplies start to deplete rapidly, prices will shoot up even more allowing for greater revenue margins however that will also be followed by a large bust once the sources are completely depleted.
The US should have invested in alternative energy sources for its own consumption instead of taking the risk and invading Iraq in order to guarantee a large source of oil which will EVENTUALLY be depleted.
The cost-benefit analysis is completely distorted.
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