The U.S. Energy Security Challenge in the Middle East

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The U.S. Energy Security Challenge in the Middle East

Asgarova N.

The article deals with the U.S. policy in the Middle East and energy security challenge which the U.S. faced after WWl. Furthermore, the oil based economic interest of the U.S. in the Middle East is also scrutinized in this article. The double standards, which the United States showed against Arabian world in favor of Israel created disillusionment among Arabian States. For cheap oil flow the U.S. intentionally created tension in the region, where only the inhabitants of Arabian states and also Israel suffer.

Keywords: energy security, US policy in the Middle East, the economic interests of the United States.

Стаття присвячена політиці США на Близькому Сході і проблемам енергетичної безпеки на Близькому Сході після першої Світової Війни. Більш того, в даній статті розкрита тема економічних інтересів США на Середньому Сході, що базуються на нафтовому факторі. Подвійні стандарти, які американці демонстрували проти арабського світу на користь Ізраїлю, створили невдоволення серед арабських держав. Для надання дешевого потоку нафти, США створили напруженість у регіоні, де страждає тільки цивільне населення, як в Ізраїлі, так і в арабських державах.

Ключові слова: енергетична безпека, політиці США на Близькому Сході, економічні інтереси США.

The United States didn't actively participate in Middle Eastern policy until the World War II. It confined its involvement to educational and missionary activities and commercial investment in the region's oil sector. Commercial interests, especially petroleum industry were among the interests of private American corporation in the Middle East. In the XIX century coal was considered to be the chief source of energy for Western officials. But in the beginning of XX century oil became an important commodity for Western countries. The 1920's automobile, trucking, highway boom tied the consumer economy to petroleum. Nevertheless, the USA was the world's greatest oil producer into the early 1940's, American businessmen calculated that Middle East oil resources would be very lucrative. In these years the U.S. backed limited self-determination for colonized people, including Arabs aspiring to self-governance and independence [1, p. 27].

Such propensity gave an impetus for American and British firms for oil concession in the region. That was a new competition where two Western governments took an active part. In 1908 the discovery of Masjid-i-Suleiman, which was a major oil discovery in Iran paved the way for the formation of Anglo-Persian Oil Company. This company denied the U.S. oil interest in Iran. London also tried to block oil concessions of American firms in Arabian states via affecting Arab leaders, but after the complaints from State Department and the other factors urged Great Britain to end this policy [2, p. 2-3].

After the collapse of the Ottoman Empire, British forces took control of the region. King Faisal who was a loyal ruler appointed by British officials signed a concession agreement with the Iraqi Petroleum Company which dominated by Great Britain. According to this agreement all rights of the country's oil were given to the foreign firms. Just minimum royalties were belonged to the Iraqi state [3, p. 32].

Iraq's oil took a substantial part in the U.S. oil interest in the Middle East. Gradually, the U.S. firms began to obtain a significant part in the Middle East oil industry. In the early 1920's the U.S. possessed more than 20 percent share of Iraqi Petroleum Company after the massive oil discovery in Kirkuk. After years of strained competition the U.S.-owned Gulf Oil Corporation and the Anglo-Persian Oil Company formed a joint Kuwait Oil Company. This firm discovered a massive reserve in south-eastern Kuwait after four years.

In 1932 the Kingdom of Saudi Arabia was established after a series of war and political initiatives. With the aim to preserve his capital, King Abdel Ibn Saud gave his sixty- year oil concession to Standard Oil of California (SOCAL) in exchange for 16 percent of the company's revenues. In 1936 SOCAL formed California-Arabian Standard Oil Company and this firm first sent its oil ship to Persian Gulf in 1939. This company grew quickly as World War II generated enormous demand for its products [4, p. 298-300].

After World War II the USA and Soviet Union gained a prominent role in the Middle East. The Middle East was a region of critical strategic importance for the U.S. The Arab states obtained a substantial value and their close relations with the Soviet Union were impermissible for the U.S. for region's oil resources and military facilities. Israel had a profound impact of the U.S. policy in region for its geographical location and international complexion.

Access to the Middle East oil resource was still a vital interest in the 1950's. By 1955 the proven oil reserves in the Middle East were three to five times more than U.S. reserves and supplies 90 percent of the oil consumed in Western Europe. “The uninterrupted supply of oil from the Middle East is so vital”, the Pentagon observed in 1956, “that nothing should be allowed to threaten its continuance” [4].

Saudi Arabia played a more prominent role in U.S. thinking about the Middle East during the Cold War. President Roosevelt had negotiated a security partnership with Saudi Arabia and paved the way for promotion of commercial ties and political amity between two states as did other U.S. presidents.

Israel also possessed a strategic importance for the U.S, because oil pipelines from Iraq to Mediterranean and roads which once linked Egypt and Lebanon, Syria and Jordan ran across Israel. Israel's network of air bases would able to control them in a world war. It should be mentioned that Western access to Israel territory defended the region from the Soviet assault.

The preservation of region's rich oil resources was among the broad objects pursued by the U.S. leaders in the early 1960's and 1970's. These years were associated with Arab-Israel wars of 1967 and 1973. Israel proved itself as the region's powerful state with responding Arabian assaults and state territorially increased its size. Arabian states demanded Israel an immediate withdrawal to pre-1967 year borders. They were also disappointed with strengthening U.S.-Israel alliance and generally, the Western countries support to this state. This factor led to the politicization of the oil trade. The Organization of Petroleum Exporting Countries (OPEC) imposed an artificial price and production limits on the sale of oil to the U.S. and the Western countries and Israel. Thus, oil was used as a geo-strategic tool and it seriously damaged Western powers economies [6].

That plan was as a way to punish Israel and the Western countries. But plan was too ambitious and its consequences were serious. Israel wasn't intended to give up territory captured via bloody wars because of economic factors. The essence of the oil embargo was to force Israel to withdraw from occupied territories in 1967, but the strategy was totally a failure. The result was negative for Arab world, as this oil embargo brought Israel and the United States closer than before.

The oil embargo caused a major price increase and ran the world to energy crisis. It also affirmed to American policy-makers that the economic and strategic importance of the Middle East is very substantial for the United States. The embargo was lifted in March 1974, but its consequences were felt in world economy. In addition, the Gulf States emerged as the powerful regional powers, having enriched themselves through the embargo process.

In the following years the tenses between regional states caused the war between Iran and Iraq. These two countries are major Middle Eastern states in terms of political influence, resources, population and size. The relations between two countries ebbed and flowed throughout the century, but tensed in the end of 1970's after the establishment of Islamic Republic of Iran. The main reason of war was the negative attitude of Iran leader Khomeini towards Iraq regime and their bad treatment to Shia community. Khomeini intensified his rhetoric on the need for Shia revolution in Gulf. In response, Bagdad regime moved against Iraq's Shia community and arrested some prominent Shia leaders in country. The war lasted 9 years and the most infamous incident was the use of poison gas against Kurds by Iraq. At least, in 1988 the peace was signed between two sides.

During the war Iraq was loaned billions of dollars. By the end of the conflict Iraq's war debts topped US$80 billion, half of which owned to the Gulf States [7]. Iraq declared itself as the defendant of Gulf from Iranian expansionism. That is why Iraq regime thought that the debt should be forgiven. But Kuwait refused to negotiate until Iraq repaid its war debt and recognize all of Kuwait's borders.

The relationship between Iraq and Kuwait based on history. Kuwait was a colonial creation; land carved out of Iraq and was given to al-Sabah family as reward for their loyalty to Great Britain. For Iraq, the existence of Kuwait was illegal. The situation was intensified when the rich oil reserves were discovered in the territory of Kingdom. In the aftermath of Iran-Iraq war Baghdad accused Kuwait and the United Arab Emirates in exceeding their OPEC-set oil production levels and thus hindering Iraq's post war economic recovery [8]. Saddam Hussein also charged that Iraqi oil had been stolen in the well fields near the border of two countries and directly accused Kuwait. In its turn, Kuwait refused to forgive its debt to Iraq. On July, 1990 middle east united states

Saddam moved 100,000 Iraqi troops to his southern border with Kuwait and declared the war.

The United States had immediately interfered the conflict and expressed their concern of Saddam's action. President George H. W. Bush sent an Ambassador Glaspie to Bagdad to warn Hussein that the U.S. would oppose the use of force to settle disputes between Arabian states.

Hussein occupied Kuwait on August 2 and easily overpowered Kuwait's tiny army. The U.S. officials feared that Iraq's huge army might take control over the oil fields of northern Saudi Arabia, and also concerned that they could occupy the entire kingdom and overthrow the current monarchy.

The security of Saudi Arabia was very substantial for the U.S. and it made Bush take an immediate action in the face of threat. Within days the U.S. placed its military equipment and some 100.000 U.S. forces in Saudi Arabia.

Being sure about the security of Saudi Arabia, Bush also demanded Iraq “the immediate, unconditional, and complete withdrawal of all Iraqi forces from Kuwait”. Bush also declared that the imposing of sanction in Iraqi economy was inevitable and he encouraged other states, even called to the world leaders to act the suit. Hussein announced that Kuwait no longer existed and told to his people that prepare for the “mother for battle”.

Obtaining the international and domestic support, Bush ordered to start war to liberate Kuwait. Under the Operation Desert Strom the U.S. and its allied launched a massive operation against Iraq. Hussein resisted to allied forces with Scud missiles in their positions in Saudi Arabia, Bahrain and Qatar, as well as against Israel which was not the member of allied forces. The main reason of carrying out Scud missiles was to draw Israel to war, but this tactic failed.

The military campaign which was aimed to crush Iraqi infrastructure was broadcasted in Western media. Coalition jets flew thousands of missions and dropped more bombs that had been dropped during the Second World War. The ground campaign began on 24 February 1991, and after three days the U.S. forces entered to the capital of Kuwait. Iraq troops retreated and the war ended 100 hours after the ground war commenced. Bush declared that the UN Resolution 660 was fulfilled and Kuwait was liberated. But this decision was criticized by some states, especially by Saudi Arabia as it allowed Saddam Hussein to remain in power.

Gulf war proved the U.S. willingness to foster global support for the beginning of a war to “liberate” Kuwait from occupation was seen the importance of this tiny, but oil rich state for the United States. For many Arab states, the main reason of respecting Kuwait's sovereignty was its oil wealth and geographical position.

Bill Clinton, who served from 1993 to 2001 as the 42nd President of the United States of America inherited and applied Bush's strategy of containing Saddam Hussein. During his presidency Clinton pressed Saddam to collaborate with the U.N. inspectors in order to ensure Iraqi disarmament. Clinton also extended the Bush's no-fly restriction in some zones and ordered military strikes on Iraq.

But the regime headed by Hussein was overthrown after the U.S.-led invasion of Iraq by the United States during the presidency of George W. Bush in March, 2003. The official justification for the invasion of Iraq had been the response to the events of 9/11 and the necessity to disarm Iraq's unstable dictator, Saddam Hussein. There were some factors which are considered to be reason for invasion of Iraq. Arguments such as “the war for oil” and even “the principal reason for war against Iraq” have been raised by some observers. The U.S. sought to create the friendly relations with regional states in order to ensure smooth flow of oil. Exactly, with the U.S. help Saddam Hussein came into the power, and that was the first response of the U.S. to Iraq's defiance in 1963 [9]. Moreover, the relationship between the individuals of Bush administration and the biggest U.S. oil companies had become publicity.

After the change of regime in Iraq, the US had some plans. The substantial one was the Oil Law plan which was written by Iraqi officials under the supervision of American government and industry experts [10]. According to the law Iraq offers to foreign oil firm generous terms under “Production Sharing Agreements” (PSAs). PSAs directly demanded by the White House and according to calculations the agreement could potentially drain tens of billions of dollars in oil revenues from the state's treasure. The U.S. aim was also to reconstruct Iraq after war. But taking into an account that country's gross domestic products depended on oil for 70 per cent, this aim was seemed impossible. In summer 2007 county's main unions began make a survey on Oil Law. The public opinion was very negative. The Iraqi government needed the way to comment the draft, so they revived legislation from the Saddam era [11]. Some terms in favor of “exploration risk contact” were eliminated in order to avoid the domestic protest against the Oil Law. The Bush Administration believed that this law will help Iraq's sectarian and ethnic communities to share country's oil revenues on a fair basis [12].

Furthermore, some Iraqi political analysts noted that according to appendices the oilfields which were allocated to Iraqi National Oil Company and International Oil Companies would be determined. The Law was passed in February 2007 in Iraqi cabinet with the huge press exerted by the International Monetary Fund promising to Iraqi government to forgive the big portion of the state's gigantic debts accumulated during Gulf War.

After the cabinet passed the law, it moved to the parliament for ratification. There was dilemma before parliament: to pass the law meant to give oil control to foreign firms which would legally plunder the state's natural resource, to deny the law meant to pay off the oil revenues for Saddam's debts.

There were no great changes in the Middle East policy of Barak Obama, the 44th president of the United States. The oil was, is and will be the main factor of the U.S. foreign policy in the Middle East. The administrations can come and go, but the priorities of foreign policy are almost the same. But, Obama's administration gave more emphasis on Asia, especially in response to the rapidly growing Chinese role in the region. But the Middle East cannot be marginalized, just because of oil. The oil can be indicated as a substantial factor of the conflicts and tenseness which flowed and ebbed during two centuries in the region.

According to calculations over the next few decades the oil dependence of world will increase [13]. The main direction of the U.S. foreign policy in the Middle East for future years is the preservation of security of obtained rich resources and their possible growth. If we consider that the dependence of the world, especially U.S. economy from oil increase in near future, there is a little room to believe that peace will come to this region.

References

1. Obama and the Middle East: The End of America's Moment? Fawaz A. Gerges. - USA, 2012.

2. Peter L. Hahn. Crisis and Crossfire. The United States and the Middle East since 1945. - Pomotac Books, 2005.

3. Jonathan Cook. Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East. - 2008.

4. John. A. De Novo, American Interests and Policies in the Middle East, 1900-1930.

5. Caraway to Radford, March 20, 1956. CJCS Radford, box 16,091 Palestine, Records of the Joint Chief of Staff, Record Group (RG) 218, National Archives.

6. State Department position paper, August 1, 1952. RG 59, 641.80; memorandum of conversation by Evans, November 6, 1952, Acheson Papers, box 67a, HSTL.

7. Freedman, Lawrence and Karsh, Ephraim (1993) The Gulf Conflict 1990-1991 (Princeton, NJ: Princeton University Press).

8. Finlan, Alastair (2003). The Gulf War 1991. (London: Osprey).

9. The full transcript of evidence given to the Butler inquiry. - Independent. - 15 December 2006.

10. The real news in the Downing Street memos. - Los Angeles Times. - 23 June 2005.

11. Pipes “Civil war in Iraq?”. - New York Sun. - 28 February 2006.

12. Pepe Escobar “Exit strategy: civil war”. - Asia Times. - 10 June 2005.

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