The geopolitics of oil
Capitalism’s ruthless struggle for oil and gas
EVER SINCE oil became a crucial resource at the beginning of the 20th
century, fuel for motor vehicles and modern warships, it has been at the
heart of geopolitical struggle. Today gas, used to fuel electric power
generation, industrial processes and domestic heating, is just as
important.
Lynn Walsh
‘Geopolitics’ means the struggle between rival powers for control
over territory, natural resources (oil and gas, minerals, food products,
water, etc), vital geographic features (strategic harbours and military
base locations, rivers and canals, trade routes, etc), and other sources
of economic and military advantage.
Capitalism created a world market, but at the same time is based on
ruthless competition between rival national capitalist states. This
struggle, in turn, has always been dominated by successive superpowers,
the imperialist powers of the day.
Before the first world war (1914-18), British imperialism intervened
in the Middle East to secure control of countries with big oil reserves,
like Persia (now Iran), Iraq and Saudi Arabia. Winston Churchill
recognised the strategic importance of oil as fuel for modern warships.
Together with France, Britain took control of the Suez canal and
sponsored puppet regimes in many of the strategically placed Gulf
states.
The United States emerged from the second world war (1939-45) as the
predominant western superpower. No longer self-sufficient in oil as it
had been in the 19th century, US imperialism also followed a policy of
strategic control of oil reserves and supply routes. US president,
Franklin D Roosevelt (FDR), proclaimed: "I hereby find that the defence
of Saudi Arabia [with, at that time, the world’s biggest oil reserves]
is vital to the defence of the United States."
Guarantee
In 1945, FDR met the king of Saudi Arabia aboard a US warship. In
effect, a pact was made: the US would guarantee the survival of the
reactionary Arabian monarchy, providing the Saudi ruling class
guaranteed oil supplies to the US.
During the cold war period of rivalry with the Soviet Union, the US
relied on a network of alliances with the rulers of oil states and key
regional regimes. In many cases, these regimes were little more than
puppets propped up by US economic and military aid.
The US also maintained a network of military bases, and was prepared
to intervene in the event of crisis. For imperialism, control of oil
supply has always been linked to the preservation of strategic power and
prestige.
Time and time again US imperialism intervened in the Middle East,
either covertly or through military intervention. For instance, the US
Central Intelligence Agency, assisted by British intelligence, organised
a coup to overthrow the nationalist Iranian regime of Mohammed Mossadeq,
who tried to nationalise the Anglo-Persian oil company in 1953.
The overthrow of Mossadeq allowed the Shah of Iran to consolidate his
brutal military dictatorship. This rebounded on the US big time. The
revolutionary overthrow of the Shah in 1979 brought the Khomeini regime
to power, producing a regime that has been in conflict with the US ever
since.
The US also gave massive economic and military aid to the state of
Israel, which it saw as a bridgehead for intervention in the region. In
1958, US forces landed in Lebanon, to prop up a pro-western government.
Many more examples could be given.
In 1980, president Jimmy Carter, a Democrat, restated the Roosevelt
doctrine: "Let our position be absolutely clear. An attempt by any
outside force to gain control of the Persian Gulf region will be
regarded as an assault on the vital interests of the United States."
"Outside force" primarily referred to the ruling bureaucracy of the
Soviet Union, which was increasingly trying to build up influence in the
Middle East. However, it also referred to any regime that might
challenge US domination of the region.
In 1990, Saddam Hussein, previously armed and backed by the US and
Britain against the Iranian regime under Khomeini, invaded Kuwait,
another major oil producer. The US saw this as a threat, not only to
Kuwait but also to Saudi Arabia.
Bush senior, the 41st US president, launched a massive military
assault on Saddam’s regime, forcing him to retreat from Kuwait. But Bush
senior wisely stopped short of occupying Baghdad, and opted for a policy
of containment of Saddam rather than regime change.
Meanwhile, US dependence on imported oil has steadily grown. The US
consumes about 25% of world energy while possessing only about 5% of
energy resources. US oil production peaked in 1970-71, yet the appetite
for petrol began to grow even faster.
Of the world’s 520 million automobiles, about 200 million are driven
in the US, and the US car population is growing five times faster than
the human population.
The policy of US imperialism changed dramatically when George W Bush
became president in 2001. The Stalinist system in the Soviet Union and
Eastern Europe had collapsed and was no longer an obstacle to US
imperialism. America was now the world’s unchallengeable superpower.
Bush believed that the US should use its superior military might to
enforce its interests globally, if necessary by military intervention
and pre-emptive strikes against potential enemies. The right-wing
faction around Bush in the Republican Party was closely connected with
Big Oil, the handful of big oil and gas corporations that dominate the
industry.
The attacks on the twin towers and the Pentagon on 11 September 2001
provided the Bush regime with the political pretext it needed to
implement its policy of pre-emptive intervention. The neo-conservative
hawks saw the invasion of Afghanistan to overthrow the Taliban regime as
the first step of a series of regime changes throughout the region.
First, Saddam would be smashed, and then US forces would move on to
Iran, Syria, Saudi Arabia and perhaps other states. This was justified
as a campaign to introduce western-style democracy throughout the
region. The real aim was to install pro-US puppet regimes throughout the
region, to safeguard US and western oil interests and the strategic
control of the region by US imperialism.
The invasion of Iraq, however, has become a catastrophe for the US.
US forces are bogged down in an unwinnable war. According to a secret US
National Intelligence Estimate, the occupation of Iraq "has helped spawn
a new generation of Islamic radicalism and… the overall terrorist
threat has grown since the September 11 attacks". (New York Times, 24
September) The escalating sectarian civil war in Iraq threatens the
break-up of the country, with unpredictable fallout in the region.
Moreover, Iraq is currently producing less oil than it did before the
US invasion in 2003. This decline has been one of the factors in the
recent shortage in world oil supplies.
Threat against Iran
Recently, the Bush regime has threatened the Iranian regime of
Ahmadinejad. Behind the US’s demand for Iran to cease processing nuclear
fuel on pain of economic sanctions, is the much more serious, scarcely
veiled threat of US military strikes against Iran.
The US-Iranian confrontation, however, is not really about the bomb.
According to the US’s own National Intelligence Estimate, Iran is a
decade away from producing a viable nuclear weapon. In reality, the
conflict is driven by the geopolitics of oil.
As far as oil and gas are concerned, Iran is a key country. It is
thought to have one-tenth of the world’s petrol reserves and a sixth of
its natural gas reserves. Geographically, it occupies a strategic
position in the Middle East. Iran potentially controls vital oil routes,
the Persian Gulf (including the Strait of Hormuz).
Through its influence among Shia Arabs, the regime has a powerful
influence in Iraq, Saudi Arabia and other Gulf states. To the north,
Iran borders the unstable states of Central Asia, from the Caucasus to
the Caspian Sea, many of which have massive oil and gas reserves.
Some of the neo-conservative hawks in the Bush administration have
undoubtedly been pushing for stronger US action against Iran, starting
with economic sanctions but not ruling out military attack. Some of them
seem quite mad. A former CIA officer, Reuel Marc Gerecht, now a fellow
at the right-wing American Enterprise Institute, says: "I don’t disagree
[about] the convulsive effects that a strike would have. I actually
think that it would be in the end a healthy thing for Iran internally."
A US invasion of Iran is ruled out. If the superpower cannot hold
onto its position in Iraq, it certainly does not have the forces
available to occupy a much bigger country. US invasion, moreover, would
provoke a massive national resistance. Even a military strike now
appears to be unlikely. It would have convulsive effects throughout the
region and rebound on US imperialism.
While threatening sanctions through the UN, the Bush administration
has been stepping up its propaganda efforts against the Iranian regime
and is working to build alliances with dubious exile groups.
Elizabeth Cheney, daughter of the vice-president and a senior State
Department official, has been put in charge of a government-funded
programme to spend $85 million on support for dissidents in Iran. This
is reminiscent of US support for unsavoury characters like Chalabi in
Iraq before the US invasion.
The US has tried to isolate Iran. But its threats against the
Ahmadinejad regime, together with its growing hostility towards both
Russia and China, have pushed Russia, China and Iran closer together.
There is the beginnings of a triangular alliance based on oil and
strategic cooperation.
Both China and Russia have a big interest in Iranian oil and gas
reserves, and have developed extensive trade links to the country. Not
surprisingly, they are strongly opposed to economic sanctions against
Iran, which if implemented would cut across their own interests.
China needs a huge supply of oil and gas to fuel the breakneck growth
of its industry and infrastructure. Chinese demand has been one of the
main factors in pushing up the prices of oil and gas over the last three
years. The Chinese regime has been securing deals in Africa (Sudan) and
Latin America (Venezuela) in order to guarantee the fuel it needs.
However, Iran and the surrounding region are vital to China’s economic
growth.
The Chinese state-owned energy company, Sinopec, has made a series of
mega-deals with Iran, including a 25-year contract worth around $100
billion.
China also has important deals with Russia’s oil industry, now the
world’s biggest oil exporter (overtaking Saudi Arabia in August). China
is also cooperating with some Central Asian oil exporters to construct a
network of gas and oil pipelines throughout the region.
President Putin of Russia and president Hu Jintao of China have
recently made a series of agreements. Russian and Chinese state-owned
oil conglomerates are planning for Russia to supply about 10% of China’s
oil. Gazprom, the leading Russian gas company, is building two huge
pipelines to supply China.
Both Russia and China have become increasingly alarmed at US
imperialism’s aggressive push into the Middle East and Central Asia.
Despite the mutual economic dependency between the US and China, the
Bush regime has publicly identified China as its main strategic rival on
the world arena.
At the same time, the Bush administration has become increasingly
hostile to the Putin regime in Russia. Washington has been alarmed that
the Russian government, buoyed up by surging oil revenue, has become
more assertive throughout the Eurasian region. Putin also appears to be
increasingly blocking the growth of western oil interests in the Russian
oil and gas industry.
As a result of these pressures, Russia, China and four Central Asian
countries – Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan – have
formed the Shanghai Cooperation Organisation, a regional security
alliance designed to act as a counterweight to US influence in the
region. Last year, SCO demanded the withdrawal of US troops from Central
Asia. Uzbekistan has kicked the US out of its Karshi-Khanabad airbase,
and Kyrgyzstan may evict the US from its Manas airbase. These are
serious setbacks to US policy in the region, as Washington has
prioritised the establishment of a network of military bases.
There are now talks within SCO, moreover, on offering membership to
Iran. If carried through, such a step would undoubtedly sharpen the
tensions between the US superpower, on the one side, and its two main
international rivals, Russia and China, as well as with Iran.
Competition for access to oil and gas has sharpened the competitive
struggle between rival powers, making international relations much more
volatile. High energy prices have strengthened Putin’s regime, as well
as Chavez in Venezuela and Morales in Bolivia (where the government
recently declared the nationalisation of the gas industry). They have
been able to cock a snook at US imperialism, tied down in Iraq and
increasingly dependent on imported energy.
Now, however, oil and gas prices are falling, and may fall further
with a slowing down of the US and the world economy.
A sharp fall in energy prices, where there has been massive
speculative activity, may provoke turmoil in world financial markets.
Recently, a hedge fund, Amaranth Advisers, lost up to $6 billion as a
result of speculating on gas contracts. Lower prices will create serious
problems for Putin and Chavez, as well as for the rotten regimes in
Saudi Arabia and other Gulf states. Reduced government revenues are
likely to spell growing social instability.
High or low energy prices, the anarchy of the world capitalist
market, dominated by profit-driven corporations, mean inequality and
insecurity, poverty and unemployment, for many millions of working
people.
The world is crying out for a fundamental social transformation, with
worldwide economic planning and genuine democracy based on the workers
and peasants who produce society’s wealth.
The power play of capitalist geopolitics would be replaced by
international cooperation to develop natural resources and technology in
the interest of all humankind.
