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4/11/2002 (24:47) |
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April 10, 2002 8:30 a.m.
Let’s Embargo Them
We don’t need their oil.
With this decision we want to sound the alarm and raise the nation's voice to remind all those who forget that God is great. Accursed be the lowly.' So stated Saddam Hussein last Monday in a televised speech announcing a one-month embargo of Iraqi oil exports as a symbolic gesture in support of the 'heroes, mujahedin, strugglers and heroines' of Palestine. News of the Iraqi oil embargo was greeted by world oil markets with a collective shrug. Crude oil prices fell Tuesday as much as 2 percent after rising slightly Monday in wake of the announcement.
Saddam said that the Iraqis 'have great hopes that our Arab and Muslim brothers and all believers' would 'encourage this blessed step' and that other oil producers would adopt similar measures. The Iranians have threatened to cut off oil supplies for one month to 'those countries who have close ties with the Zionist entity,' but the United States need not worry since trade with Iran is already prohibited by the Iran-Libya Sanctions Acts (ILSA) of 1996 and 2001. Other states in the region have been downright uncooperative. Qatari Foreign Minister Hamad Al Thani stated that the Iraqi move was 'an important and brave step, which I believe most of us cannot take ... for many political and economic reasons.' Kuwaiti Foreign Minister Sheikh Mohammed Al-Sabah said, 'hand-cutting and self-whipping will not liberate the Palestinian lands. Calls to destroy the Arab Gulf economies in the name of liberating Palestine are dubious.' One should also remember that Yasser Arafat solidly backed Saddam Hussein during the 1990-91 invasion of Kuwait, which did not endear either him or his cause to the Kuwaitis. Saudi Arabia has really failed to get into the spirit of the thing — the Saudis guaranteed they would make good on any disruptions caused by the Iraqi embargo.
The embargo is not only temporary; it is not even total. Saddam Hussein announced that Iraq would stop oil exports completely as of April 8, 'via the pipelines going to the Turkish port on the Mediterranean and via our ports in the south for a period of 30 days.' The Iraqi leader excluded the oil shipments sent by tanker truck to Jordan, which total around 90,000 legal barrels per day, and perhaps another 10-30,000 barrels under the table. (Jordanian Energy Minister Mohammad Batayneh confirmed publicly that the Jordanian supply would not be affected by the embargo.) Also unmentioned were the shipments via the Kirkuk-Banias pipeline to Syria, which could total 200,000 barrels per day, mostly in violation of U.N. 'Oil for Food' Resolution 986. Saddam sees this resolution as an insult to Iraq's sovereignty and Iraq has been accused of violations totaling up to $2 billion/year. Thus Saddam's 'oil for baksheesh' program will be relatively unaffected by the embargo, even if he sticks to the stated terms and conditions.
Saddam must know that the embargo will not hurt the United States, Israel, or any other oil-importing country. But this is not his objective. Saddam is seeking to boost his legitimacy among the Muslim radicals and others in the region who desperately want to see someone standing up to the 'Great Satan' in deeds and not just words. Osama bin Laden has not been heard from recently, at least not credibly, and Saddam is attempting to wrest back the crown as the preeminent champion of the radical Arab-Muslim cause in the face of rampant American power. The Iraqis had proposed the oil shutoff at the recent Organization of the Islamic Conference (OIC) ministerial meeting in Malaysia, where it was rejected, and Saddam rubbed it in during his speech when he mentioned how oil revenues have corrupted 'the [Arab] nation's elite sons' and how the U.S. has persuaded some of them 'to accept the state of weakness and humiliation.' In so saying, Saddam is representing himself as a more legitimate leader of the transnational Muslim radicals and the growing Arab underclass, if not Islam itself.
This puts the moderate Arab oil producers in a tough situation. They cannot interrupt the oil flows on which their survival depends — an anonymous OPEC source quoted in AFP stated that 'no rational and sane human being would back such a move, because it will certainly backfire on all of us.' This isn't 1973 folks. The oil weapon just ain't what it used to be. Market shares are down, populations are growing and making more demands, domestic budgets are showing signs of strain, and the expected social contract cannot be fulfilled. To this potentially revolutionary situation, add massive new oil reserves discovered outside the Middle East, the rise of non-OPEC competitor states, and the prospect of alternative-energy sources, and the long-term picture is dire. The Arab moderates are caught between revisionist authoritarian rulers like Saddam, their own radicalized or disheartened domestic populations, precarious economies and sagging popular legitimacy. As I have argued previously in NRO, the recent Saudi peace initiative was an attempt to get at least the Israel issue off the table, but the Iraqis, Syrians, and Iranians were too clever to let that happen.
So what can the U.S. do about it? The first thing is to be not afraid. The Arab states will never again engage in what the Russians call 'petropolitical actions' if they know what is good for them. We might suffer some temporary inconveniences but they would be looking at disruption, revolution, at the very least permanent loss of market share as other production facilities ramped up to fill the void. Nevertheless, I have never understood why the U.S. has placed so much effort on maintaining the Middle East as an energy supplier. In 1985, only 7.1 percent of our oil imported came from the region, and by 2001 this number had risen to approximately 25.3 percent. Yet, by sending dollars to this region we have not only indirectly funded terrorism, the development of weapons of mass destruction, and a number of other ills, but have been forced to accept strategic interests and consequences which otherwise we could safely ignore.
The United States should seek to obtain if not total energy independence at least independence from the Middle East as part of a national strategic vision. This might include developing alternate fuels, or opening new sources of oil to production, or simply shifting imports away from the Middle East and towards more benign places like Canada (already our number-one source for foreign oil), Mexico, Norway or any other state that does not openly sanction violence against America and its allies. The shift could be facilitated quite easily by passing an act similar to the ILSA but aimed at Iraq and any other countries we determine are using oil revenues to support terrorism. Let's see how they like it when we embargo them. The major importers of Iraqi oil - which according to the Department of Energy include ExxonMobil, Chevron, Citgo, BP, Marathon, Coastal, Valero, Koch, and Premcor — could be required to find supplies elsewhere. Critics might say that the overall petroleum market would not change, that this would only amount to rearranging the deck chairs, but so what? That is like justifying buying stolen property by saying, 'if I don't do it somebody else will.' An e-mail is making its way around calling on consumers to act against companies that do business with terror states, either through boycott, selling stocks, writing letters, or similar grassroots action. (Note that web data on imports are sometimes conflicting — the DOE's Energy Information Administration is a good place to verify the information for yourself.)
Saddam's embargo is not an indication of his strength — though perhaps of his shrewdness — and the tepid regional and market response demonstrates that the oil weapon is a paper tiger. The correlation of forces has shifted away from the Middle Eastern states since the days when they could hold the industrial world hostage. Today, they need us much more than we need them. As the antiterror alliance gears up for the Iraq campaign it is a lesson Saddam Hussein may regret teaching.
— James S. Robbins is a national-security analyst & NRO contributor
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