Oil Oligarchy: The War and After

This is an interpretation of America's foreign policy that would generate buckets of denial from any administration spokesperson. It is interesting that even the occupation of Afghanistan is fitted into this broad scheme of interpretation. No doubt other factors are involved but the overall theory makes some sense. It is also true that the policy is damaging to the United States and the economic situation in the U.S. combined with its humungous debt from financing wars may cause the American people increasing hardships. There were much cheaper ways to ensure oil supplies and supplies are now perhaps less secure than ever. U.S. candidates stress the need to become less reliant on foreign oil but as this article shows the U.S. is becoming ever more dependent upon foreign oil and there is no way the U.S. is going to drill its way out of the situation by exploiting what is left in U.S. territory.

Oil Oligarchy:The War And After
By Mir Adnan Aziz
11 July, 2008Countercurrents.org
Gabriel Kolko, noted historian of modern warfare, states in his book 'Another century of war': "A foreign policy that is both immoral and unsuccessful is not simply stupid; it is increasingly dangerous to those who practice or favour it. That is the predicament that the United States now confronts."
Armed with a license to kill in the post September 11 years, the oil oligarchy's doctrine came into play. An occupied Afghanistan was planned to evolve into an American colony manned by permanent military bases. Apart from an easy access for oil pipelines to the Indian Ocean, it was thought to ensure increased US influence in the oil-rich regions around the Caspian basin and perform the critical geopolitical task of countering that of Russia and China.
It was famously said: "If you control Iraqi oil, you are halfway there to controlling all world oil." Iraq's proven oil reserves total more than 112 billion barrels. Potential reserves are estimated at over 200 billion barrels. Additionally, according to U.S. Department of Energy, Iraq contains 110 trillion cubic feet of gas. This was the prize which spurred the Iraqi occupation ironically named 'Operation Iraqi Freedom'.
America's oil oligarchy, sought to support this fantasy by entrenching in power a satellite Iraqi state strewn with military bases. The fact that with a tenth of world oil reserves, four times that of America including Alaska, meant that a US-controlled Iraq would greatly improve the formers energy crisis.
It also saw an occupied Iraq constraining Iran. The strategists thought that with Afghanistan and Iraq occupied and firmly in control along with the control of the Persian Gulf and the Arabian Sea, the regime in Tehran would be cowed into submission.
With an ever increasingly defiant Iran, the historically resilient Afghans resurging to counter an invader and an Iraq getting uncontrollable day after day, we see the oil oligarchy's great oil adventure aflame. The increasingly adaptable insurgencies, by fuelling oil vulnerability globally, are translating the West's nightmare into a reality.
We see increasing attacks on oil and gas operations worldwide in an effort to disrupt jittery energy markets and destabilize governments. The attacks, most intense in Iraq, have also occurred recently in Nigeria Indonesia and Russia. The northern pipeline that carries Iraqi oil to the Turkish port of Ceyhan has been blown up 37 times in just 12 months.
The Taliban have made a remarkable comeback tying down over 50,000 foreign troops. In Iraq, we see a harrowing 25% killed, injured or displaced. Over 100,000 civilians have been killed directly by violence. 4 million have been displaced from their homes; tens of thousands have succumbed to disease and malnutrition. More than 100,000 have been detained without trial. The state/coalitions writ, however, is still confined to the Green Zone.
Since the commencement of the "war on terror," the world has witnessed an unholy relationship between oil and U.S. foreign policy. Oil, America's Achilles heel, has always impacted its policies since World War II. This manifested itself in the Truman, Eisenhower, Nixon, and Carter doctrines but never so overtly and brutally as the oil oligarchy doctrine of today.
The U.S. with less than 5% of the world's total population consumes more than 25% of global oil. In recent years, rather than setting out a strategy for energy independence, it has unfolded a blood drenched roadmap of supplementing its increased dependence on imported oil by gory occupations.
America's own wells are drying up as local demand increases incessantly. By 2010 the US will need to import 60 percent of its oil. Since most of this supply comes from volatile and anti-American zones, its dependency is bound to lead to recurrent military aggression and occupations.
Militarily overextended, with a faltering economy and collapsing currency, its hubris remains undiminished. Neocons, seeking redemption, are busy drawing up plans to attack Iran. They also seek to check China and prevent its emergence as a power beyond their control. The Republican presidential candidate has boasted that he will challenge Russia and bring Putin to heel.The world's greatest debtor is going to take on two powerful countries with the globally largest trade surplus. According to the World Factbook, an annual publication of the CIA, Russia's 2007 current account surplus was $465 billion; that of China $363 billion.The US global current account deficit, on the other hand, is larger than it has ever been. Nearing $800 billion it is almost 7 percent of US GDP. To finance both the current account deficit and its own sizable foreign investments, the United States must import about $1 trillion of foreign capital annually or more than $4 billion each working day. This is unsustainable both in international and domestic financial and trade policy terms. This deficit is larger that the total deficits of all other countries in the world combined.
The cost of the oil oligarchy's wars of occupation is between $3 and $5 trillion. This comes on top of the unfunded liabilities of the US government totalling $53 trillion. A banker of even an average intellect would not hesitate in terming America as the world's worst credit risk.Moreover, its oil dependency is escalating dramatically. In March 2002 oil was $25 a barrel, six years on it hovers around $140. This has seen the US oil import bill rise from $145 billion in 2006 to almost $500 billion presently, a $355 billion addition to an already huge trade deficit.
There is no possibility of America closing this humongous gap. It only survives this enormous deficit because the US dollar is the world reserve currency. This role too is nearing an end as the world looks for more stable stores of value. Although oil still being nominally quoted in dollars, in reality is being priced in euros. Oil producers raise the dollar value only to keep their oil revenues at a constant purchasing power in euros.
With the imminent change of guard let us hope the new US administration, with urgency and clarity, delineates its predicament and changes its energy (foreign) policy. The surreal oil crisis is a direct fallout of US failure to develop a realistic energy policy at home and the means to procure it globally. If the paradigm is not changed, the next decades will see nations paying for America's gluttonous lust for more oil - with more blood.


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