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Dependence on Foreign Oil and Its Effects on American Foreign Policy Back before the 70 s oil from the Middle East was very cheep, and in North America, it was about $ 4 a barrel. But then, the leaders of the Middle East discovered that everyone needed their oil, so they formed OPEC (Organization of Petroleum Exporting Countries). Practically overnight, they jacked up the prices of oil by limiting the supply. This was the first oil crisis. It lasted for a while, but then they got greedy, and started supplying more oil, in hopes to make more money. But then there was more supply, so the price of oil started to fall.
Just recently, they are getting back together, driving oil prices up again, and making these few countries rich. Over the past two decades, oil prices have increased very sharply. Especially the rise in the price was noticeable during the last 3 years, with the Funds reference price rising from a 25 year low of $ 11 per barrel in February 1999 to a peak of close to $ 35 per barrel in the first week of September 2000, now settling around $ 30 per barrel. The recent World Economic Outlook contained an extensive discussion of the potential impact of higher prices. This is a trend because for the past few months, oil and gas prices have been steadily rising, and there is a growing concern for the energy needs of the United States. This trend will greatly affect Americas future because our country continues to use a lot of oil in everyday life.
A large amount of people own cars, and use oil to heat their houses. This oil that nearly everyone uses is becoming increasingly more expensive, and is depended upon many variables that we cannot control. Because there are very few efficient substitutes, the United States remain dependent upon foreign oil. A lot of this oil, we have to import from the Middle East, which is not such a good thing. Many countries in the Middle East are in turmoil, which makes it very difficult to depend on them for oil.
If they go to war, oil prices would be expected to drastically change. There are a few places in our country, which are very rich in oil. Alaska has a lot of oil, and because of the rising prices, Alaska and Texas has made a lot of money. If the technology can be invented to extract more oil from different parts of the United States then our country would not be so dependant on the imported oil.
When you depend on some other country or resource of that country it certainly affects the foreign policy of the dependant. Since the United States is a powerful nation it is possible for us to provide the whole country with just right amount of oil. Nevertheless, many oil exporting countries are concerned that within next 40 years their valuable resources will be depleted, which changes the situation on the oil market and greatly affects the price of oil. The United States has rich oil resources as well, but our country attempts to preserve them for the future and prefers to purchase oil from other nations. Global rising of oil prices could affect the United States economic policy because prices could rise to the extent where the Government has to step in and try to drive prices back down.
We have tried to drive the price of oil down by releasing a reserve of oil. This unfortunately did very little; leaving North Americans paying whatever the Middle East decides what to charge. The American government may have to step in to try bringing the price of oil down because so many Americans and American businesses depend on it. America and other developed countries of the world that buy oil from OPEC should try to terminate this trend. The countries in the Middle East are not selling their oil, which the rest of the world requires, at a fair price.
They have enough oil to last the world for 200 years, yet they are limiting the supply just so that they can make more money. One way to terminate the trend would be to extract oil from other sources. This way, the United States would not be so dependent upon the Middle East and the oil will be cheaper. A second alternative would be to get these countries to sell their oil at a reasonable price by force. The U. S.
alone has a big military advantage over the Middle East, so the U. S. could tell some of the countries in the Middle East to either sell their oil at a fair price, or the U. S. could just take over those countries. If the U.
S. were to invade the Middle East, they could take all their wealth that they acquired from selling expensive oil, and then oil could go back to being around $ 5 a barrel, giving the economy the boost it needs to prevent or pull out of a recession. With the 2000 Presidential election looming and both candidates in a near deadlock, Al Gore and George W. Bush have been forced to take stands on some very tough issues, such as what to do about the recent escalating crude oil prices. Many people believe that the candidates should promise to open up the strategic crude oil reserve until the prices stabilize.
Others believe that the candidates should promise to negotiate with members of the OPEC bloc in an effort to stabilize prices. Many others believe that the candidates should look within the country, and begin oil drilling in untapped regions of the country such as Alaska. There are several benefits to opening additional wells in the Alaskan region, such as new jobs for American workers, cheaper crude oil, and less dependency upon an often unstable Middle Eastern region. These people believe that because there are already wells drilled in Alaskan regions with similar environmental conditions as the region in question, that there will be no harmful affects to begin drilling. Obviously there are many dissenters of this opinion who believe that by drilling in regions such as Alaska, we risk environmental disasters such as the Exxon Valdez, regardless if we drill in the ocean, or if we drill on land. These people believe that by drilling on land, we will destroy the permafrost that the oil derricks will be set upon permanently as well as well as risk the overall contamination of the environment.
If we decide to drill into the ocean floor, we risk the chance of an oil pipe bursting, and risk an environmental disaster even worse than the Exxon Valdez incident. In addition, there are also several solutions to the increase in crude oil prices that do not involve risking the environmental region of Alaska. The new wave of OPEC leaders are, according to the Augusta Chronicle Editorial Staff, Harvard-education business executive who have all been schooled in global economics. These leaders recognize the dependency of the United States and the rest of the world upon crude oil and will charge whatever the demand curve will allow (web). In addition to threats by new leaders of OPEC, members of the Arctic National Wildlife Refuge state that, Nearly 58 % of oil used in the United States is imported from foreign countries (web). This creates an unprecedented dependence on crude oil imports.
In fact, according to the ANWR, we export over 10. 5 million barrels of oil a day, including a staggering 1. 4 million from Saudi Arabia alone. The ANWR argues that by opening up the coastal area of the region, it could produce 16 billion barrels of recoverable ofthe equivalent of 30 years of Saudi Arabia oil. Thus the need and desire for internal oil production is evident. A perfect example of the importance of oil for the United States foreign policy is the Arab-Israeli conflict. The Arab-Israeli conflict can trace its accentuation into the forefront of world politics back to the British and Americans after the end of World War II and the formation of the United Nations. Israel was created by the United Nations to provide a homeland for the many millions of persecuted Jews throughout the world.
It also created a serious conflict with the Arab countries of the region. The newly created country had the backing of the United States and Great Britain, while the Arabs, for the most part, had the backing of the Soviet Union. Yet, Iran, Egypt, and Jordan were friendly to the U. S. and this presented a unique problem for America.
They supplied billions of dollars of military aid to Israel to help them to fight wars to keep the Arabs out of the new country. The U. S. needed oil from the Arab countries and supported the Arabs enemy, Israel with military. The conflict required a special solution and it significantly affected Americas foreign policy for the next years.
The U. S. sold military goods to, maintained trade and diplomatic relations with Israel, and needed to maintain that relationship to show other countries that America would stand behind her friends. At the same time, the U. S.
also needed Arab oil. The need was so great that the oil embargo that was imposed on the U. S. by the Arab countries actually forced the U. S. to speed up peace efforts in the Middle East.
The Arabs, small and somewhat unorganized, could yield some power over the greatest superpower in the world. The U. S. had to and did act to overcome the situation. Henry Kissinger, and later President Jimmy Carter, acted in accordance with Americas best interests to gain a peace agreement. Although little was done to resolve this conflict, they landed several treaties, which ended most of the open warfare and provided for many of the issues that concerned each side.
Kissinger got the oil embargo lifted and Carter negotiated a treaty to end Arab-Israeli hostilities. However, it is easy no notice that America is successful in its foreign policy when it comes to oil. Even today oil remains to be the major American concern on the Middle East. What is good is that our country meets its goals when it comes to resources, which shows that the foreign policy is working for the goodwill of the nation. Nevertheless, current changes in the foreign policy describe how America is facing the biggest energy crisis in its history. It targets Saddam as a threat to American interests because of his control of Iraqi oilfields and recommends the use of military intervention as a means to fix the United States energy crisis. (Mackay) Sources: Alaska Oil Drilling (web).
ANWR Oil Amour, (web). Top 10 Reasons to Support Development in ANWR, (web). Worried About Fuel Prices? ANWR Equals 30 Years of Saudi Oil, (web). To nelson, Alan. What Is The National Interest?
The Atlantic Monthly, 1991. Oil Has Always Been Top of Bush's Foreign-Policy Agenda, (web). Mackay, Neil. The Battle over Oil, Sunday Herald, October 7, 2002 (web).
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