The US continues to use sanctions and other means to curb the oil exports of its foes, mainly Iran and Russia – beyond the bounds of international morality and law.
As it happens, the Obama administration is wielding the oil weapon against two of the world’s leading producers. These efforts, in alliance with the European Union, which include embargoes and trade restrictions, have had some impacts on Tehran and Moscow, but they are likely to have a far greater impact on world output and economy, reflecting White House confidence that, in the pursuit of US strategic interests, anything goes – even global energy security.
In the case of Iran, Washington has moved aggressively for decades to contain Iran’s influence in the region and curtail its ability to finance national development plans by blocking its access to Western technology and curbing its export sales. Under the Iran Sanctions Regime, foreign firms that invest in the Iranian oil industry and others are barred from access to US financial markets and subject to other penalties.
After the crisis in Ukraine, the same outlook has governed US policy toward Russia. The impact of Western sanctions cannot yet be assessed. Russian officials scoffed at them, insisting it is business as usual. Nevertheless, the decision to target Russia’s drilling efforts in the Arctic represents a dramatic turn in US policy, risking a future contraction in global oil supplies.
As these developments indicate, the US has come to view the oil weapon as a valuable tool of power and influence. That Washington is prepared to move in this direction reflects a sense that energy, in this time of globalization, constitutes a strategic asset of unparalleled importance. To control oil flows across the planet, especially in the Middle East and Persian Gulf, and deny market access to recalcitrant producers is increasingly a major objective of American foreign policy.
Yet, given Washington’s lack of success when using direct military force in these last years, it remains an open question whether the oil weapon will prove any more satisfactory in offering strategic advantage to the US. As with any application of force, however, use of the oil weapon has failed to a great extent. This is because it entails substantial risks:
1. The US and the European Union will remain dependent on oil imports for the foreseeable future and will suffer if other countries were to deny them exports.
2. This new version of the oil wars could someday result in a genuine contraction in global supplies, driving prices skyward and threatening the health of the world economy.
3. Seeing Washington’s growing reliance on aggressive oil tactics to impose its sway, Iran and Russia are finding their own innovative ways to wield the oil weapon to their advantage – and to Washington’s ultimate detriment.
4. For all the talk of price falls and big new oil discoveries in Africa and North America, the geological facts speak otherwise. Even with the new American/African oil, worldwide production outside the Middle East is barely keeping pace with demand.
5. This escalation will not only drive up the risk of conflict but will make it harder for governments to focus on long-term energy challenges, such as developing alternative fuels and alleviating energy poverty – challenges that are themselves critical to long-term energy security the world over.
To further substantiate why the sanctions regime has indeed failed, British Member of Parliament and Head of British Iranian Chamber of Commerce Lord Andrew Phillips once said: “The US-led sanctions against Iran have backfired, dealing a major blow to the commercial interests of British merchants and investors in Europe. Rivals such as Russia, China and others in Asia and South America have become Iran’s biggest trading partners as a consequence of erroneous policies on the part of London and Washington. The sanctions regime is not going anywhere, as it is not a smart move at all. The hope is that the next governments in London and Washington will also appreciate such an undeniable fact.”
The comments made by Lord Andrew Phillips serve as further proof that the coercive measures against Iran and Russia have indeed proven to be counterproductive and quite the opposite have turned into opportunities for them elsewhere. The rediscovery of Asia, Africa and South America, and their turn away from Europe has been the most important and perhaps the least expected consequence of the network of illegal Western sanctions and oil wars.
The hope is that the next officials in Washington and London will appreciate that history is passing the sanctions regime by, and that if they continue the “erroneous policies” of their predecessors against Iran and Russia, they will only be sanctioning themselves AND their trading partners – at a time when demand for oil is sharper, global production continues to lag, and many nations struggle to maintain access to adequate energy supplies, or move on to something beyond oil.