Petro-Islam: Nexus between Oil and Terrorism

Inquisitive observers of the Middle Eastern politics would naturally wonder why do Western powers prop up the Gulf’s petro-monarchies, knowing fully well that they are the ones responsible for nurturing Islamic extremism? Does this not run counter to their professed goal of eliminating Islamic radicalism and terrorism?

Seemingly, the Western powers support the Gulf’s autocrats because it has been a firm policy principle of the Western powers to promote ‘stability’ in the Middle East instead of representative democracy. They are mindful of the ground reality that the mainstream Muslim sentiment is firmly against any Western military presence and intervention in the Middle East region.

In addition, the Western policymakers also prefer to deal with small groups of Middle Eastern ‘strongmen’ rather than cultivating a complex and uncertain relationship on a popular level, certainly a myopic approach which is the hallmark of so-called ‘pragmatic’ politicians and statesmen.

Left to their own resources, the Persian Gulf’s petro-monarchies lack the manpower, the military technology and the moral authority to rule over the forcefully suppressed and disenfranchised Arab masses, not only the Arab masses but also the South Asian and African immigrants of the Gulf states. One-third of the Saudi Arabian population is comprised of immigrants. Similarly, more than 75% of UAE’s population is also comprised of expats from Pakistan, Bangladesh, India and Sri Lanka.

The rest of the Gulf states, including Kuwait, Qatar, Bahrain and Oman, also have a similar proportion of immigrant workers from the developing countries. Unlike the immigrants of the Western countries, however, who hold the citizenship status, the Gulf’s immigrants have lived there for decades and sometimes for generations, and they are still regarded as unentitled foreigners.

Regarding the question that is there a way for the international community to persuade the Gulf states to implement democratic reforms, it’s worth noting that the nuclear sanctions on Iran from 2006 to 2015 have brought to the fore the enormous power that the Western financial institutions wield over the global financial system.

Despite the sanctions being unfair, Iran felt the heat so much that it remained engaged in negotiations throughout the nearly decade-long period of sanctions, and the issue was finally settled in the form of the Iran nuclear deal in April 2015. Such was the crippling effect of those ‘third party’ sanctions on the Iranian economy, however, that had it not been for Iran’s enormous oil and gas reserves, and some Russian, Chinese and Turkish help in illicitly buying Iranian oil, it could have defaulted due to those sanctions.

All I am trying to suggest is that there are ways to persuade the Gulf’s petro-monarchies to implement democratic reforms and to desist from sponsoring Islamic extremism, provided we have just and upright international arbiters. As in the case of aforementioned Iran sanctions, sanctioning the Gulf states also seems plausible, however, there is a caveat: Iran is only a single oil-rich state which has 160 billion barrels of proven oil reserves and has the capacity to produce 5 million barrels per day (mbpd) of crude oil.

On the other hand, the Persian Gulf’s petro-monarchies are actually three oil-rich states. Saudi Arabia with its 266 billion barrels of proven oil reserves and 10 mbpd of daily crude oil production, and UAE and Kuwait with 100 billion barrels of proven reserves each and 3 mbpd of daily crude oil production each. Together, their share amounts to 466 billion barrels, almost one-third of the world’s 1477 billion barrels of total proven oil reserves. Moreover, if we add Qatar to the equation, which isn’t oil-rich as such, but has substantial natural gas reserves, it will take a morally very upright arbiter to sanction all of them.

Therefore, though enforcing economic sanctions on the Gulf states to implement democratic reforms sounds like a good idea on paper, but the relationship between the Gulf’s petro-monarchies and the industrialized world is that of a consumer-supplier relationship. The Gulf states are the suppliers of energy and the industrialized world is its consumer, hence the Western powers cannot sanction their energy suppliers and largest investors.

If anything, the Gulf’s petro-monarchies have ‘sanctioned’ the Western powers in the past by imposing the oil embargo in 1973 after the Arab-Israel war. The 1973 Arab oil embargo against the West lasted only for a short span of six months during which the price of oil quadrupled. But Washington became so paranoid after the embargo that it put in place a ban on the export of crude oil outside the US borders -- which is still in place -- and began keeping 60 days stock of reserve fuel for strategic and military needs.

Recently, some very upbeat rumours about the shale revolution have been circulating in the media. However, the shale revolution is primarily a natural gas revolution. It has increased the ‘probable recoverable’ resources of natural gas by 30%. The shale oil, on the other hand, refers to two starkly different kinds of energy resources: first, the solid kerogen -- though substantial resources of kerogen have been found in the US Green River formations, but the cost of extracting liquid crude from solid kerogen is so high that it is economically unviable for at least 100 years; second, the tight oil which is blocked by the shale -- it is a viable energy resource but the reserves are so limited, roughly 4 billion barrels in Texas and North Dakota, that it will run out in a few years.

More than the size of oil reserves, it is about per barrel extraction cost, which determines the profits for the multinational oil companies, and in this regard, the Persian Gulf’s crude oil is the most profitable. Further, regarding the supposed US energy independence after the so-called ‘shale revolution,’ the US produced 11 million barrels per day (bpd) of crude oil in the first quarter of 2014, which is more than the output of Saudi Arabia and Russia, each of which produces around 10 million bpd. But the US still imported 7.5 million bpd during the same period, which is more than the oil imports of France and Britain put together. More than the total volume of oil production, the volume which an oil-producing country exports determines its place in the hierarchy of petroleum and the Gulf’s petro-monarchies constitute the top tier of that pyramid.

Neocolonialism and the myth of sovereignty

It’s an evident fact that the neocolonial powers are ruled by behemoth corporations whose wealth is measured in hundreds of billions of dollars, far more than the total GDP of many developing nations. The status of these multinational corporations as dominant players in national and international politics gets official imprimatur when the Western governments endorse the congressional lobbying practice of the so-called ‘special interest’ groups, which is a euphemism for business interests.

Since the Western governments are nothing but the mouthpieces of their business interests on international political and economic forums, therefore any national or international entity which hinders or opposes the agenda of corporate interests is either coerced into accepting their demands or gets sidelined.

In 2013, the Manmohan Singh’s government of India had certain objections to further opening up to the Western businesses. The Business Roundtable, which is an informal congregation of major US businesses and which together holds a net wealth of $6 trillion, held a meeting with the representatives of the Indian government and literally coerced the latter into accepting unfair demands of the Western corporations.

The developing economies, like India and Pakistan, are always hungry for foreign direct investment (FDI) to grow further, and this investment mostly comes from the Western corporations. When the Business Roundtables or the Paris-based International Chamber of Commerce (ICC) form pressure groups and engage in ‘collective bargaining’ activities, the nascent and fragile developing economies don’t have a choice but to toe their line.

State sovereignty, that sovereign nation states are at liberty to pursue independent policies, especially economic and trade policies, is a myth. Just like the ruling elites of the developing countries who have a stranglehold and monopoly over domestic politics; similarly, the neocolonial powers and their so-called ‘multinational’ corporations control international politics and the global economic order.

Any state which dares to transgress becomes an international pariah like Castro’s Cuba, Chavez’s Venezuela and Mugabe’s Zimbabwe; or more recently, Iran which was cut off from the global economic system from 2006 to 2015, because of its supposed nuclear ambitions. Good for Iran that it has one of the largest oil and gas resources, otherwise it would have been insolvent by now. Such is the power of global financial system, especially the banking sector, and the significance of petro-dollar because the global oil transactions are pegged in the US dollars all over the world, and all the major oil bourses are also located in the Western financial districts.

The crippling ‘third party’ economic sanctions on Iran from 2006 to 2015 have brought to the fore the enormous power that the Western financial institutions and the petro-dollar as a global reserve currency wields over the global financial system. It bears mentioning that the Iranian nuclear negotiations were as much about Iran’s nuclear program as they were about its ballistic missile program, which is an equally dangerous conventional threat to the Gulf’s petro-monarchies just across the Persian Gulf.

Despite the sanctions being unfair, Iran felt the heat so much that it remained engaged in negotiations throughout the nearly decade-long period of sanctions, and the issue was finally settled in the form of the Iran nuclear deal in April 2015. However, such was the crippling effect of those ‘third party’ sanctions on the Iranian economy that had it not been for Iran’s enormous oil and gas reserves, and some Russian, Chinese and Turkish help in illicitly buying Iranian oil, it could have defaulted due to those sanctions.

Regarding the exploitative neocolonial system and the stranglehold of the Western financial services sector on the global economy, in April 2016, the Saudi foreign minister threatened [1] that the Saudi kingdom would sell up to $750 billion in treasury securities and other assets if the US Congress passed a bill that would allow the Saudi government to be held responsible for any role in the September 11, 2001 terror attacks.

It’s worth noting that $750 billion is only the Saudi investment in the US, if we add its investment in the Western Europe, and the investments of oil-rich UAE, Kuwait and Qatar in the Western economies, the sum total would amount to trillions of dollars of Gulf’s investment in North America and Western Europe. Similarly, according to a July 2014 New York Post report [2], the Chinese entrepreneurs had deposited $1.4 trillion in the Western banks between 2002 to 2014, and the Russian oligarchs were the runner-ups with $800 billion of deposits.

Moreover, in order to bring home the significance of the Persian Gulf’s oil where 28,000 US troops have currently been stationed in their numerous leased military bases and aircraft-carriers, here are a few rough stats from the OPEC data: Saudi Arabia has the world’s largest proven petroleum reserves of 266 billion barrels and its daily crude oil production exceeds 10 million barrels; Iran and Iraq each has 150 billion barrels reserves and have the capacity to produce 5 million barrels per day each; while UAE and Kuwait each has 100 billion barrels reserves and they produce 3 million barrels per day each; thus, all the littoral states of the Persian Gulf together hold more than half of world’s 1500 billion barrels of proven petroleum reserves.

Finally, regarding the Western defence production industry’s sales of arms to the Gulf Arab States, a report [3] authored by William Hartung of the US-based Centre for International Policy found that the Obama administration had offered Saudi Arabia more than $115 billion in weapons, military equipment and training during its eight years tenure. Similarly, during its first international visit to Saudi Arabia in May last year, the Trump administration signed arms deals worth $110 billion, and over 10 years, total sales could reach $350 billion.

Relationship between Power and Sex

Imran Khan and General Qamar Bajwa

A question naturally arises in the minds of curious students of regional geopolitics that why did Pakistan choose to wage Washington’s proxy war against the erstwhile Soviet Union in Afghanistan back in the 1980s? Was it to strengthen its defences against India, the oft-quoted ‘strategic depth’ theory, or the fear that the former Soviet Union might make further advances into Pakistan’s Balochistan province to reach the warm waters of the Arabian Sea?

All these geopolitical considerations might have played a part, but to understand the real reason why Pakistan decided to become Washington’s accomplice in the Afghan conflict, we need to understand the nature of power. Rationally speaking, power ought to be means to achieve higher goals, but in practical life, we often face David Hume’s ‘is-ought dilemma,’ where rather than means to an end, power becomes an end in itself, and it is the nature of power to expand further and to grow more powerful.

Thus, Pakistan’s security establishment did not collaborate in Washington’s ‘bear trap project’ for any ulterior strategic goals, the goal was simply to exercise power by taking advantage of the opportunity. In order to elaborate this abstract concept, I would like to draw a parallel between power and sex. In the grand scheme of things, sex is not an end in itself; it is means to an end, the end being the procreation of offspring.

But many hedonic couples nowadays use contraceptives and don’t consider it worthwhile to procreate and nurture children, due to economic constraints or the unnecessary effort that nurturing children inevitably entails. Social scientists have no business offering advice or moral lessons; to each his own. But if the ultimate end for which nature has invented the agency comes to a naught, that does not per se renders the agency any less significant, instead the agency itself becomes an end in itself. Thus, power is like sex; its exercise is pleasurable and its goal is further expansion and amassing of more power to satisfy the insatiable needs of compulsive power maniacs.

Notwithstanding, many Leftist activists nowadays commit the fallacy of trying to establish an essentialist and linear narrative to global events. One cannot question their bona fide intentions, but their overzealous efforts sometimes prove counterproductive to their own credibility and the causes that they are striving for.

All the contemporary conflicts are not energy wars. The Iraq and Libya wars were obviously energy wars, because Iraq has proven petroleum reserves of 140 billion barrels and it can produce 5 million barrels of crude oil per day, which is second only to Saudi Arabia’s 10 million barrels daily oil production and 266 billion barrels of proven petroleum reserves, while Libya used to produce 1.6 million barrels per day before the civil war in 2011 and has the proven reserves of 48 billion barrels.

The Syrian conflict has a different dimension to it. Syria does not produce much oil except approximately 385,000 barrels per day from the north-east in Deir al-Zor and has proven petroleum reserves of only 2.5 billion barrels. NATO’s involvement in the Syrian conflict is for the sake of ensuring Israel’s regional security. The single biggest threat to Israel’s regional security was posed by the Shi’a resistance axis comprising Iran, the Assad regime in Syria and their Lebanon-based proxy, Hezbollah.

During the course of 2006 Lebanon war, Hezbollah fired hundreds of rockets into northern Israel, and Israel’s defence community realised for the first time the nature of threat that Hezbollah and its patrons, Iran and the Assad regime in Syria, posed to Israel’s regional security. Those were only unguided rockets but it was a wakeup call for Israel’s military strategists that what will happen if Iran passed the guided missile technology to Hezbollah whose area of operations lies very close to the northern borders of Israel.

Washington’s military intervention in Afghanistan in October 2001 in the backdrop of the 9/11 terror attack, however, was different from all other wars. It was a war of imperial hubris and a war of liability rather than a war of choice. That’s why we didn’t see much commitment of troops and resources by the Bush administration in the initial years of the Afghan war, and only an year into the Afghan war, Bush invaded Iraq in March 2003 for its 140 billion barrels of petroleum reserves.

It was the Obama administration 2009-onward that made the Afghan war a bedrock of its foreign policy. By going dovish on Iraq, Obama wanted to offset his public perception of being a weak president by offering an alternative of a ‘just war,’ the Afghan war. And consequently, the number of US troops in Afghanistan spiked from 30,000 during the tenure of the neocon Bush administration to more than 100,000 during the term of the supposedly ‘pacifist’ Obama administration.

It bears mentioning that during the election campaign of 2008 before he was elected president, Barack Obama made an artificial distinction between the supposedly ‘just war’ in Afghanistan and the unjust war in Iraq. In accordance with the flawed distinction, he pledged that he would withdraw American troops from Iraq but not from Afghanistan.

The unilateral intervention in Iraq by the Bush administration was highly unpopular among the American electorate. Therefore, Obama’s election pledge of complete withdrawal of the US troops from Iraq struck a chord with the voters and they gave an overwhelming mandate to the ostensibly ‘pacifist’ contender during his first term as the president.

In keeping with the election pledge, President Obama did manage to successfully withdraw American troops from Iraq in December 2011 during the first term as the president, but only to commit thousands of American troops and the US Air Force to Iraq just a couple of years later during the second term as the president when the Islamic State overran Mosul and Anbar in early 2014.

The borders between Iraq and Syria are poorly guarded and highly porous. The Obama administration’s policy of nurturing militants against the Assad regime in Syria for the first three years of the Syrian civil war from 2011 to 2014 was bound to backfire sooner or later.