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The Importance of Oil In U. S. Foreign Policy Introduction During the oil and energy crisis of the mid- 1970 s Americans became painfully aware of the consequences of the United States dependence on foreign sources of oil. Unfortunately, research and exploration for alternative sources of oil in North America has not been pursued vigorously enough to cease such foreign dependence.
As a result, in the mid- 1990 s Americans find themselves in the same precarious position as they were during the 1970 s. The Persian-Gulf War in 1991 was all the proof needed to convince the United States of how strongly oil still influences our foreign policy and international relations in general. Oil and U. S. Foreign Policy: Historical Issues The United States has had a long history of supporting and aiding oil-rich countries in time of political or economic crisis.
Specifically, the U. S. has relied predominantly on oil imports from the Middle East since the 1920 s. This was a result of several events.
The availability and cost of gas became a critical issue in 1920, because there were numerous oil shortages on the Pacific Coast. According to Beaver (1991), Union Oil and Standard Oil of California rushed petroleum by rail from Texas to the Los Angeles area in order to ease the acute shortage of gasoline and the long lines at service stations. In Portland, Oregon, gasoline was rationed during the summer months as the price climbed to 50 cents per gallon (Beaver, 1991, p. 241). As a result of this situation and another historical factor, consumption of oil almost doubled during the decade.
This factor was Americans love of the newly invented automobile. Right after World War I and throughout the 1920 s, the U. S. began to experiment with ways of developing its own energy resources, namely the use of synthetic fuels. However, during the 1920 s, synthetic fuel development was ultimately not successful. However, the issues surrounding oil did become more clearly defined.
According to Beaver (1991), the availability and cost of conventional energy sources; national security concerns; the technical, legal, and economic uncertainties related to synthetic fuels; and the emergence of large oil companies as major forces in shaping energy policy. These issues that became salient in the 1920 s remain relevant to the 1990 s (Beaver, 1991, p. 241). Both the Wilson and Harding administrations took proactive foreign policy actions in order to ensure adequate supplies of oil for the booming economy. Both administrations assisted major U. S.
companies in their attempts to secure foreign oil agreements. For example, the government tried to persuade Great Britain and the Netherlands to allow U. S. oil companies into the Middle East and Pacific regions where they controlled most of the oil reserves. The U. S.
government hoped to gain an open door policy in oil exploration. However, U. S. diplomacy failed to secure this from either the British or the Dutch. According to Beaver, Such failures frustrated U.
S. officials. Frank G. Lane, secretary of the interior, called British control of Middle Eastern oil a menace.
In fact, anti-British sentiments prompted Congress to pass retaliatory legislation barring foreigners from acquiring oil leases on public lands (Beaver, 1991, p. 241). The postwar initiatives to secure foreign oil set a precedent that was to become more important in later decades. Namely, when oil was in short supply, major companies, with the support of the U. S.
government looked to Latin America and the Middle East rather than concentrating on domestic solutions. As a result, These initiatives reduced any sense of urgency to explore synthetic fuels; as long as foreign oil could be obtained at reasonable prices, the difficult task of developing synthetics could be averted (Beaver, 1991, p. 241). Thus, the U. S. found itself dependent upon oil from the Middle East.
The Middle East, except for the constant struggle between Israel and her Arab neighbors, had long been calm. Soviet pressure on Greece, Turkey, and Iran had been successfully contained in 1947 by a combination of local opposition and firm American support. In 1971, the British announced that they would withdraw their remaining forces from the Persian Gulf. The French and British withdrawal from such colonial dependencies as Syria, Lebanon, Palestine, Egypt, Jordan, Syria, Cyprus and Aden had pacified local nationalists and helped to calm tension within the region. Soviet attempts to cross over the barrier of the northern tier and to win countries such as Egypt, Iraq, and Syria with massive military and economic aid had been only partly successful. In addition, relations between Washington and the major oil companies with the leading oil producers, Saudi Arabia and Iran were friendly.
The most serious problem for the companies was persistent competition from the Soviet oil exports and from smaller Western companies rapid expanding their fields in Libya. The result had been a recurrent glut of oil and a slow-motion price war that both tripled the volume of oil traded in world markets in a decade and cut the price of the standard grade of Saudi crude petroleum from $ 2. 08 a barrel in 1958, to as little as $ 1. 30 in 1970. However, in the mid- 1970 s that all began to change due to the growing political unrest in the Middle East. The first crisis was the Arab-Israeli war of 1973. It was during that year that oil prices jumped from $ 2 to $ 10 and during the Iranian revolution of 1979, prices went from $ 13 to $ 32. From that point on, the United States found that it had a vested interest in engaging in serious foreign policy relations with the Middle East countries to ensure the continuing availability and cost containment of its oil to the United States.
Oil And Its Impact On Foreign Policy Why is oil considered part of U. S. foreign policy? According to Rustow (1982), Oil is the most important commodity in the world economy.
Its price is set in the Middle East, which both contains most of the worlds reserves and is its most troubled political region (Rustow, 1982, p. 19). Although the United States appears the most vulnerable to the economic dangers of a gas crisis, and the political dangers from the Middle East, it also have the greatest potential to impact the economy of oil and the politics of the Middle East than any other single nation. According to Rustow, More than half the arms currently stockpiled in the Middle East were made in the United States. And if somehow were Americans could wean ourselves from oil imports, we could deprive OPEC of its best customer overnight (Rustow, 1982, p. 20). Although the United States had always come to the aid of the oil-producing countries it depended on, it was during the late 1970 s and early 1980 s that the government of the United States began to vehemently fix its foreign policy on solving the oil crises it found itself facing. For example, according to Rustow, In 1968 Henry Kissinger had proved oblivious to the problems of the Persian Gulf; by 1980 Jimmy Carter was to declare the Gulf a region of vital interest to the United States (Rustow, 1982, p. 19).
This vital interest was most clearly delineated during the 1991 Gulf War and the crisis that led to it. Saddam Hussein's attack against oil-rich Kuwait proved just how vital the region was to not only the United States, but to the entire world. Oil is one of the main reasons we are in the Persian Gulf indefinitely. According to Hoagland, Saddam's threat to Saudi oil fields triggered the significant escalation of stationed American troops in the Gulf that has apparently enraged Saddam, Saudi domestic extremists or whoever set off that truck bomb (Hoagland, 1996, p 5 B). As recently as this year, President Clinton had to deal with the threat of Saddam Hussein. And, although he has retreated for the time being, he has not gone away.
He still holds a carrot over the U. S. and it is oil. This time, the U. S. held off that fight, and protected Saudi oil fields by extending the no-fly zone to southern Iraq.
Oil prices stayed steady. Just as during the energy crisis of the 1970 s, during the Gulf war there was a great deal of discussion about the danger of Americas dependence on foreign oil. Once again, as soon as the perceived threat seemed to vanish, in this case, Saddam Hussein, the fear once again went away. According to Heilbrunner (1996), But the fundamental problem has not.
For an administration obsessed with geo economics, it is startling that the Clintonites have devoted almost no attention to the rise in American oil imports. Instead, they have rolled over as the Republican Congress has slashed funding for energy research (Heilbrunner, 1996, p. 4). Americas dependence on Mideast oil is frightening. According to Heilbrunner, U. S. demand in the coming years is expected to exceed demand as in the 1970 s, when the U.
S. suffered twin oil shocks. At the same time, U. S. production is shrinking yearly: onshore production of crude oil will decrease at an annual rate of 1. 7 percent through 2015, according to the Energy Information Administration, the independent statistical agency within the Department of Energy (Heilbrunner, 1996, p. 4). Many people who live and die by the free market, dont see this as a problem.
They say that the market will adjust itself to any swings in demand. Their assumption is that people will cut back when prices go up. This in turn, will drive prices back down again. Although prices went as high as $ 40 a barrel after Saddam overran Kuwait, they soon stabilized as the Saudis stepped up production. But this was just good luck. Had Saddam immediately moved into Saudi Arabia instead of waiting in Kuwait, his 100, 000 -strong army could have seized Saudi oil fields located less than 200 miles from the Kuwaiti border and protected only by a Saudi national guard battalion of less than 1, 000 men, as Robert J.
Lieber pointed out in the summer 1992 issue of International Security. Saddam would have controlled 46 percent of the worlds oil reserves (Heilbrunner, 1996, p. 4). As both the threat of Saddam Hussein and the recent bombing at an Air Force Base in Saudi Arabia demonstrate, the potential for oil-threatening conflict in the region will not go away. Iraq has already attacked three of its neighbors Iran, Kuwait and Israel. According to Heilbrunner, There is no reason to believe Saddam wont strike again. Instability could come from other sources.
One scenario might be a joint Turkish-Iranian grab for Iraqi territory in the north. The ascendance of Necmettin Erbakans religious Welfare Party in Turkey does not bode well for Americas future ability to influence Turkey. Saudi Arabia may become another source of trouble, since Crown Prince Abdullah has made no secret of his unease with the U. S.
As Americas oil thirst continues to rise, an Abdullah-led Saudi regime could work more strenuously to resurrect opec and influence American policy toward Israel (Heilbrunner, 1996, p. 4). According to most experts, there is yet another challenge facing the U. S. The nation must devise a clear strategy combining oil and national security. Part of that strategy must including reducing American dependence on foreign oil. Key strategies to achieve this goal include promoting conservation and perhaps subsidizing public transportation, such as a high-speed rail network.
As Heilbrunner says, But safeguarding American oil also means presiding over a pax Americana rather than a lax Americana in the Middle East. The only thing Saudi Arabia, Jordan and Egypt fear more than U. S. resolution is U. S.
irresolution. In the short term, Clinton and Gore might work to bring 4 million barrels of oil per day back onto the market. Theyre located in Iraq, awaiting a regime sufficiently civilized to be allowed to sell them (Heilbrunner, 1996, p. 4). Conclusion: Current Issues Just how relevant is the issue of oil to America today? According to Hoagland, In 1973, America consumed 17. 3 million barrels of oil a day, importing 6. 2 million barrels or 35 percent. One out of every 10 imported barrels came from Saudi Arabia.
By 1980, consumption and import patterns had not changed. Last year Americans used 17. 7 million barrels a day. Imports rose to 8. 8 million barrels 50 percent of consumption. Saudi Arabia accounted for 15 percent of U. S.
imports, and 86 percent of all U. S. imports came from the Persian Gulf (Hoagland, 1996, p. 5 B). In addition, the problems that the U. S. faces in maintaining a presence in the Middle East are far from over.
According to Hoagland, The death of the 19 airmen at Dhahran testifies to the real cost that Americans pay for continuing to rely so heavily on energy supplies that can be disrupted at the drop of a crown, or the rise of a madman (Hoagland, 1996, p. 5 B). Bibliography References Ashton, Michael (1992, Apr. 1). The Efficient Tariff: Systematically Balancing Security And Welfare Concerns. American Economist, Vol. 36, 44. Beaver, William (1991, Jan. 1).
The U. S. Failure To Develop Synthetic Fuels In The 1920 s. Historian, Vol. 53, 241.
Dorr, Robert. (1996, Jul 15). Dont Blame Perry For The Saudi Attack. Air Force Times, Vol. 56, 62. Heilbrunner, Jacob (1996, Oct. 7).
Over A Barrel. New Republic, Vol. 215, 4. Hoagland, Jim. (1996, Jul. 15). U. S. Dependence On Oil Killed Those 19 Airmen.
Indianapolis Business Journal, Vol. 17, 5 B. Hung, James (1991, Apr. 1). The Post-Cold-War World Order And The Gulf Crisis. Asian Affairs: An American Review, Vol. 18, 31.
Kissinger, Henry (1996, Jun. 1). United States Foreign Policy. Vital Speeches, Vol. 62, 486. Kubursi, At-Mansur, Salim (1993, Sept. 1). Oil And The Gulf War: An American Century Or A 'New World Order. Arab Studies Quarterly, Vol. 15, 1.
Nowotny, K. -Peach, J. (1992, Mar. 1). Changes In Energy Consumption, 1970 - 1989, And Energy Policy In the United States. Journal of Economic Issues, Vol. 26, 183. Rogers, Paul (1996, Feb. 28). Persian Gulf War (1990 - 1991) Colliers Encyclopedia, Vol. 18, CD-ROM. Rustow, Dankwart (1982).
Oil And Turmoil. America Faces OPEC And the Middle East. New York, New York: W. W. Norton. Shane Mage (1996, Feb. 28).
Organization Of Petroleum Exporting Countries (OPEC) Colliers Encyclopedia, Vol. 18, CD-ROM. Stevens, Paul (1995, Jan. 1). Understanding The Oil Industry: Economics As A Help Or A Hindrance. Energy Journal, Vol. 16, 125.
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