‘Axis of oil’ fu­els U.S. ad­ver­saries

The Washington Times Weekly - - Front Page - By David R. Sands

Th­ese are flush times for some of Amer­ica’s most de­ter­mined ad­ver­saries. Ex­ploit­ing tight global en­ergy mar­kets and soar­ing gas prices in re­cent years, lead­ing en­ergy pro­duc­ers around the globe are us­ing their ex­port wind­falls to chal­lenge U.S. in­ter­ests, in­tim­i­date U.S. al­lies and, in some cases, bankroll ter­ror­ist and in­sur­gent groups fight­ing U.S. forces.

Ma­jor pro­duc­ers such as Venezuela, Rus­sia and Iran have teamed up with emerg­ing en­ergy con­sumers — no­tably China — in an “axis of oil” to frus­trate U.S. for­eign-pol­icy ob­jec­tives, ac­cord­ing to Flynt Lev­erett, a for­mer top Mid­dle East ad­viser in the Bush ad­min­is­tra­tion, and Pierre Noel, a re­search fel­low with the French In­sti­tute of In­ter­na­tional Re­la­tions.

“The po­lit­i­cal con­se­quences of re­cent changes in global en­ergy mar­kets are pos­ing the most pro­found chal­lenge to Amer­i­can hege­mony since the end of the Cold War,” the two con­cluded in a re­cent sur­vey in the jour­nal Na­tional In­ter­est.

Even Sec­re­tary of State Con­doleezza Rice, a vet­eran of both Bush ad­min­is­tra­tions and a long­time for­eign-pol­icy scholar, con­ceded ear­lier this year she un­der­es­ti­mated the ways the

“en­ergy ques­tion” dis­torted in­ter­na­tional re­la­tions.

“I can tell you that noth­ing has re­ally taken me aback more as sec­re­tary of state than the way the pol­i­tics of en­ergy is — I will use the word ‘warp­ing’ — diplo­macy around the world,” she told the Se­nate For­eign Re­la­tions Com­mit­tee in April.

“Ithas­givenex­traor­di­nary­power to some states that are us­ing that power in not very good ways for the in­ter­na­tional sys­tem, states that would­haveother­wise­havev­erylit­tle power,” she said.

An­drei Il­lar­i­anov, top eco­nomic ad­vis­er­toRus­sianPres­i­den­tVladimir Putin be­fore re­sign­ing last year in protest at the gov­ern­ment’s anti-demo­cratic poli­cies, said re­form at home and co­op­er­a­tion with the West both­de­clined­sharplyas­theKrem­lin seized­con­trolofthe­coun­try’sbiggest en­ergy com­pa­nies.

“The cor­re­la­tion was very di­rect,” saidMr.Il­lar­i­anov,noware­search­fel­low at the Cato In­sti­tute, a Wash­ing­ton-based lib­er­tar­ian think tank.

While oil prices have re­treated fromthemid-Ju­lyrecordof$78abar­rel,the­cur­rent$57-a-bar­rel­pricere­mains­farabovethelevel­sofjustafew years ago.

The re­sult: hun­dreds of bil­lions of dol­larss­wellingth­e­cof­fer­sofregimes hos­tile to the United States.

Mr. Noel, in a talk two weeks ago, said the idea of a di­rect link be­tween ter­ror­ism and oil is “sim­plis­tic,” sayin­git­was­not­like­lythatad­if­fer­entU.S. en­ergy pol­icy and dras­tic re­duc­tions in Amer­i­can en­ergy im­ports from the Mid­dle East would make a dent in ter­ror­ist-fi­nanc­ing net­works.

Iran aside, he added, none of the coun­tries that have most re­cently ob­tained nu­clear weapons, from In­dia and Is­rael to North Korea, re­lied on oil money to fund their re­search pro­grams.

Still, some of the main prob­lem coun­trieson­theU.S.diplo­mati­chori­zon all have one thing in com­mon: deep en­ergy pock­ets.

Iran’s Is­lamist regime, sit­ting on the world’s third-largest known oil re­servesand­sec­ond-largest­nat­u­ral­gas re­serves, so far has dis­missed U.S.-led­ef­fort­sto­sanc­tio­nan­dis­o­late its econ­omy over its sus­pected nu­clear-weapons pro­grams.

Even be­fore this year’s surge in prices, Iran was earn­ing $30 bil­lion more an­nu­ally from its oil ex­ports alone com­pared with a decade ago, ac­cord­ing to the D.C.-based In­sti­tute for In­ter­na­tional Eco­nomics.

The wind­fall has not only al­lowed hard-line Pres­i­dent Mah­moud Ah­madine­jad­to­boost­so­cial­spendin­gat home, but to fi­nance groups con­sid­ered ter­ror­ist by the State Depart- ment, such as Hezbol­lah in south­ern Le­banon and Ha­mas and Is­lamic Ji­had in the Pales­tinian ter­ri­to­ries.

Glob­alSe­cu­rity.org, which tracks in­ter­na­tional ter­ror­ist groups, said Hezbol­lah was founded by Ira­nian agents in the early 1980s and the group “re­ceives sub­stan­tial amounts of fi­nan­cial, train­ing, weapons, ex­plo­sives, po­lit­i­cal, diplo­matic and or­ga­ni­za­tional aid” from both Iran and Syria, putting Tehran’s an­nual as­sis­tanceat­be­tween$25mil­lio­nand$50 mil­lion.

Iranisal­sowide­lythought­to­bethe source­ofthe­wad­sof­cashHezbol­lah lead­er­swere­dis­tribut­ingto­fol­low­ers intheafter­math­ofthissum­mer’s34­day war with Is­rael.

An­a­lysts also see oil as the lu­bri­cant en­abling Venezue­lan Pres­i­den­tHu­goChavez­to­con­duc­tanout­spo­kenly anti-Amer­i­can for­eign pol­icy as head of the world’s fifth­largest oil ex­porter.

Plan­ning Min­is­ter Jorge Gior­dani said­last­week­tha­toil­rev­enues­forthe state-owned en­ergy com­pany have soared from $9.84 bil­lion in 2003 to $33.5bil­lion­so­farin2006,with­trans­fer­pay­ments­fromtheoil­sec­tor­tothe gov­ern­ment­up65per­centinthep­ast two years.

The flam­boy­ant Mr. Chavez has usedthep­etrodol­larsto­fi­nanceafor­eign­pol­i­cysharply­a­toddswith­Wash­ing­ton — even though the United State­sisVenezuela’ss­in­glebiggestoil­ex­port mar­ket.

He­ha­sopen­lypro­mot­edleft­ist­po­lit­i­calal­liesinBo­livi­aan­dotherLatin Amer­i­can coun­tries, sub­si­dized the ail­ing econ­omy of Cuban dic­ta­tor Fidel Cas­tro and re­cently con­ducted an ex­pen­sive global lob­by­ing cam­paign in a failed bid to win a seat on the U.N. Se­cu­rity Coun­cil.

The State De­part­ment’s an­nual global ter­ror­ism sur­vey con­cluded it was “un­clear” whether any of Venezuela’s oil wealth had made its way to left­ist guer­rilla groups fight­ing the U.S.-backed gov­ern­ment in neigh­bor­ing Colom­bia. But the re­port found Cara­cas’ co­op­er­a­tion in the global war on ter­ror “neg­li­gi­ble.”

Mr. Chavez “per­sisted in pub­lic crit­i­cism of U.S. coun­tert­er­ror­ism ef­forts, pub­licly cham­pi­oned Iraqi ter­ror­ists, deep­ened Venezue­lan col­lab­o­ra­tion with state spon­sors of ter­ror­ism such as Cuba and Iran, and was un­will­ing to deny safe haven to mem­bers of Colom­bian ter­ror­ist groups,” the State De­part­ment re­port found.

Su­dan be­gan ex­port­ing oil only seven years ago, but en­ergy riches have left it largely in­dif­fer­ent to out­side crit­ics of its bru­tal cam­paign against rebel groups in the coun­try’s west­ern­re­gionofDar­fur,acam­paign the U.S. gov­ern­ment has for­mally la­beled a “geno­cide.”

De­spite a decade of U.S. sanc­tions and­pres­sure­on­in­vest­ment­by­in­ter­na­tional en­ergy com­pa­nies, Su­dan’s econ­omy grew by 8 per­cent in 2005 and is ex­pected to ex­pand by 12 per­cent this year — al­most en­tirely be­cause­o­foil­ex­ports.Su­danis­now­sub­Sa­ha­ran Africa’s third-largest oil pro­ducer, trail­ing only Nige­ria and An­gola.

Khar­toumhashadnod­if­fi­cul­ty­fi­nanc­ing its army and Arab mili­tias known as the “Jan­jaweed” in the Dar­fur con­flict. For­mer Fi­nance Min­is­ter Abda Yahia el-Mahdi re­cently told the New York Times that 70 per­cent of the gov­ern­ment’s oil rev­enues are de­voted to de­fense and to arms man­u­fac­ture.

Mr. Lev­erett and Mr. Noel say the Iran and Su­dan cases il­lus­trate an­other way the “axis of oil” dis­torts global pol­i­tics and frus­trates U.S. for­eign-pol­icy goals.

Ma­jor en­ergy im­porters such as China, they say, shield hos­tile gov­ern­ments from U.S. pres­sure.

With a veto as a per­ma­nent mem­ber of the U.N. Se­cu­rity Coun­cil, China has acted as a brake on U.S. plans­for­toughac­tion­a­gain­stIranand Su­dan. China’s state en­ergy com­pa­nies are busy lock­ing up sup­plier deals and joint oil-field de­vel­op­ment projects.

“China’s search for oil is mak­ing it a new com­peti­tor to the United States for in­flu­ence, es­pe­cially in the Mid­dle East, Cen­tral Asia and Africa,” the an­a­lysts say.

A re­port from a Coun­cil on For­eign Re­la­tions task force on U.S. en­ergy pol­icy chaired by for­mer En­ergy Sec­re­tary James R. Schlesinger and for­mer CIA chief John M. Deutch con­cluded ear­lier this month that com­pe­ti­tion among ma­jor im­porters will only in­crease, harm­ing U.S. in­flu­ence.

“Lar­geoil­con­sumer­shavetended to be­come es­pe­cially fo­cused on se­cur­ing sup­ply and ig­nore the ef­fects of their in­vest­ments on cor­rup­tion and mis­man­age­ment,” the task force found.“In­Su­dan,forex­am­ple,de­spite civil war and wide­spread hu­man rights abuses, the Chi­nese gov­ern­men­tan­dit­soilen­ter­pris­esare­fund­ing ex­ten­sive oil sup­ply and in­fra­struc­ture projects.”

En­ergy clout is even play­ing a grow­ingroleinthe­sec­tari­anten­sions di­vid­ing Iraq and the Mid­dle East. Plans­for­great­er­au­ton­o­my­forIraq’s war­ringre­gion­shave­foundere­dover the ba­sic fact that most of the coun­try’s oil wealth is found in prov­inces dom­i­nat­ed­byIraq’sKurd­sandShi’ite Mus­limArabs—leav­ingSun­niArabs out in the cold.

Mamoun Fandy, an in­flu­en­tial Arab­news­pa­per­colum­ni­stan­dapro­fes­sor of Mid­dle East Stud­ies at the Na­tion­alDe­fenseUniver­sity,saidthe re­gion’s lead­ing Sunni gov­ern­ments fear a loss of ma­jor oil-pro­duc­ing as­sets with the rise of Shi’ite po­lit­i­cal move­ments linked to Iran.

Even in strictly Sunni Saudi Ara­bia, many of the coun­try’s most pro­duc­tive­field­sare­foundintheeast­ern part of the coun­try in­hab­ited by the coun­try’s small Shi’ite mi­nor­ity.

“It some­times seems that ev­ery place you find an oil well, there is a Shi’ite stand­ing by it,” he said.

Ac­cen­tu­at­ing the trend of mix­ing oil and pol­i­tics is the in­creas­ing clout of state-owned na­tional oil com­pa­nies, or NOCs, most un­der close su­per­vi­sion of their par­ent gov­ern­ments, in global en­ergy mar­kets.

NOCs hold nearly three-quar­ters of the world’s proven oil re­serves.

The largest private firm on the list ofoil-re­serve­giants—ExxonMo­bil— now ranks only 12th in the world in known­re­serves,far­be­hindthes­ta­te­owne­doil­com­pa­niesofSaudiAra­bia, Rus­sia, Mex­ico, Venezuela, Iraq and Iran.

Thetrans­form­ing­powero­foi­land nat­u­ral gas can be seen clearly in the evolv­ing for­eign pol­icy of Rus­sia.

In­the1990s,when­glob­aloil­prices plum­meted, the near-bank­rupt gov­ern­ment of then-Pres­i­dent Boris Yeltsin posed few chal­lenges to U.S. andWesternEuro­pean­for­eign-pol­icy goals, in­clud­ing the ex­pan­sion of NATO to Rus­sia’s doorstep and the bomb­ing cam­paign against Ser­bia, Moscow’s ally, in the 1999 Kosovo war.

Af­ter 2000, the Krem­lin un­der Pres­i­den­tVladimirPutin­first­moved to­bringRus­sianen­er­gy­firmssuchas Yukos un­der its di­rect con­trol, and used the money and mar­ket clout to re­vi­tal­ize Rus­sian for­eign pol­icy.

In talks with the Euro­pean Union and the coun­tries on its border that are­de­pen­den­tonRus­sianoi­land­nat­u­ral gas, Moscow has not been shy about ad­ver­tis­ing its new clout.

“It is the ul­ti­mate weapon they can use against us,” said Nikoloz Ru­rua, deputy chair­man of the com­mit­tee on de­fense and se­cu­rity in Ge­or­gia’s par­lia­ment.

Add Mr. Lev­erett and Mr. Noel: “Moscow­is­usin­gits­mar­ket­pow­erto push back against the United States in are­nas where it per­ceives U.S. in­fringe­ment on its in­ter­ests.”

Two weeks ago, Rus­sian news­pa­pers re­ported that Ukraine — tar­get of a brief cut­off by Moscow last win­ter — was be­ing asked to make po­lit­i­cal con­ces­sions in re­turn for a new nat­u­ral-gas sup­ply deal with Rus­sia.

The con­ces­sions in­cluded slow­ing Ukraine’s drive to join NATO and link­ingUkraine’sbid­to­jointheWorld Trade Or­ga­ni­za­tion to Rus­sia’s own stalled ap­pli­ca­tion.

“I would say quite openly that we need to syn­chro­nize the ne­go­ti­a­tion process of our coun­tries on WTO,” Rus­sian Prime Min­is­ter Mikhail Frad­kov said af­ter an Oct. 25 meet­ing to con­clude the deal with his Ukrainian coun­ter­part, Vik­tor Yanukovych.

But Ukrainian op­po­si­tion leader Yu­li­aTy­moshenko­de­nouncedthen­at­u­ral-gas­dealas“trea­son”and­warned Ukrainewaslosin­gitsin­de­pen­dence from Rus­sia.

Agence France Presse / Getty Images

Venezue­lan Pres­i­dent Hugo Chavez (left) and his Ira­nian coun­ter­part, Mah­moud Ah­madine­jad, gave a show of sol­i­dar­ity dur­ing a trip to the Orinoco River basin in south­east­ern Venezuela to wit­ness the open­ing of a new oil well on Sept. 18. Both lead­ers are hos­tile to U.S. in­ter­ests.

Agence France-Presse/Getty Images

A wall of anti-Amer­i­can graf­fiti in Cara­cas ex­em­pli­fies Venezuela’s at­ti­tude to­ward the the U.S.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.