[OPE-L:6149] more on oilism thesis

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Sat Nov 03 2001 - 15:05:17 EST

Most on the American left seem to believe that given our dependence on Saudi 
oil, we are forced to maintain the stability in the Gulf even if 
the status quo means the continued rule of a corrupt regime that has now come 
to flout us their patron. Simply put, the US is thought to be a hostage of the 

Yet the  House of Saud probably could not survive a day without US support, and 
any regime that came into power would soon recognize that any attempt to 
restrict supply and thereby increase the price would accelerate the transition 
to alternatives: according to Paul Davidson,  just above the current costs of 
oil are the tar sands of Canada, Lake Maricabou in Venezuela, etc which are 
good  alternatives to crude for petroleum products. 

Moreover,  a much higher price of oil would lead the developed world into 
either a severe depression or inflation; and that prospect keeps the Sa'udis 
and OPEC in line, so to speak. The Sa'udis simply don't have the power to hold 
the world over the barrel, yet this myth haunts the imagination of the American 
left.  Moreover, the  Sa'udis external dependence on food and 
technology makes them vulnerable; there seems to be no reason why with some 
reserves a union of oil dependent states could not stare down any threat from a 
wayward regime in West Asia. 

The US interest seems not to be the ensuring of no breaks in the supply at a 
reasonable price of a non renewable resource. If the US were in fact worried 
about being held hostage by the Sa'udis, why not decrease that vulnerability by 
lifting the embargoes on Iran, Libya and Iraq? Of course one could argue that 
the US fears the exporting of a Ba'th party or a Shi'ite sect. But none of the 
embargoed countries has shown any less willingness to sell oil to the US; it is 
possible that a radical nationalist regime may not share profits in the same 
way with US companies (and they shouldn't have to), but I don't think there is 
evidence that the supply of oil would be cut off. A radical nationalist govt 
may want to raise the price of oil, but again the constraints of the world 
market are too tight.

At any rate, here is Cyrus Bina from "The Rhetoric of Oil and the Dilemma of 
War and American hegemony" in Arab Studies Quarterly, Summer 1993, vol 15, no 

"As I have explained above, since 'cheap' oil and 'expensive' oil no longer 
exist in the eyes of the global market, one begins to wonder about the 
motivation of a 'attaching' a special priority to Middle Eastern oil. Moreover, 
while the differential cost of Middle Eastern oil is sizable, it never the less 
apppears as differential rent in the global price. The remaining motivation 
therefore is to divert a good deal from this sum (i.e., Arab oil rent) in order 
to finance the various US expeditions in Africa or Central America by the 
Saudis in the 1980s. This of course has nothing to do with oil pricing or the 
necessity of oil for Western economies. It certainly has everything to do with 
the milking of certain client states in the region in order to perpetuate the 
global system.

"Despite all this, in objecting to the recent war in agains Iraq, certain 
commentators pointed out that 'The military alternative to energy efficiency 
isn't cheap...[They further emphasized that] counting military costs, Gulf oil 
now costs in excess of $100 a barrel." the conclusion that they have come up 
was to urge the US govt to cut down on its 'dependency' on Middle Eastern oil. 
In addition to the liberals, the radical left too argued the same way. Beneath 
the reasonable appearance of such arguments, however, are two unreasonable and 
false premises: (1) that global production and pricing are arbitrary, often 
determined (through conspiracy and intrigue) by a few Middle Eastern oil 
sheikhs or the shahs, in conjunction with the US state dept, thereby distorting 
and overestimating the role of the US govt and its client regimes; and (2) that 
the US govt and its represenatives are too stupid to realize that producing oil 
in this manner is un-economical, thereby distoring and underestimating the 
reality behind the US global mission. By accepting the false premise of threat 
to our survival, the entire political spectrum, including the radical left in 
this country, tried (and are still trying) to come up with a viable solution 
according to delcared ideological positions. Some opted for the outright 
invasion of the oil fields, others for the protection of notorious regimes. 
Still others proposed conservation, increased energy efficiency, and a balanced 
energy and environmental policy. Regardless of their conclusions as well as 
their intentions, nearly all have missed  the point of that the need for oil  
is a sideshow."



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