by M. K. BHADRAKUMAR
The old adage is that a good foreign policy is the reflection of the national policy. A perfect storm is brewing on the foreign policy front in America triggered by the OPEC decision on Thursday to cut oil production by 2 million barrels a day, which will on the one hand drive up the gas price for the domestic consumer and on the other hand expose the Biden Administration’s lop-sided foreign policy priorities.
At its most obvious level, the OPEC decision confirms the belief that Washington has lost its leverage with the cartel of oil-producing countries. This is being attributed to the deterioration of the US’ relations with Saudi Arabia during the Biden presidency. But, fundamentally, a contradiction has arisen between the US interests and the interests of the oil producing countries.
Contradictions are nothing new to the geopolitics of oil. The 1970s and 1980s witnessed two major “oil crises.” One was man-made while the other was an interplay of historical forces — the Yom-Kippur War of 1973 and the Iranian Revolution of 1979.
In the downstream of the Yom-Kippur War, the Arab nations weaponised oil and proclaimed an oil embargo on western nations which were perceived to have supported Israel in the war. The result was that the price of oil rose nearly 300% in less than 6 months, crippling the world’s economy.
President Nixon asked petrol stations not to sell gasoline from Saturday night through until Monday morning. The crisis affected industry more than the average consumer.
In 1979, the Iranian Revolution hit oil production rates and the world’s oil supply shrunk by 4%. Panic set in, demand for crude oil shot up and price more than doubled.
The Biden Administration tempted Fate by underestimating the importance of oil in modern economic and political terms and ignoring that oil will remain the dominant energy source across the world for the foreseeable future, powering everything from cars and domestic heating to huge industry titans and manufacturing plants.
A smooth transition to green energy over time is largely dependent on the continued availability of plentiful, cheap fossil fuel. But the Biden Administration ignored that those who have oil reserves wield a huge amount of power over our oil-centred energy systems, and those who buy oil are on the contrary, cripplingly dependent on the market and the diplomatic relations which drive it.
The Western powers are far too naive to think that an energy superpower like Russia can be simply “erased” from the ecosystem. In an “energy war” with Russia, they are doomed to end up as losers.
William Bowles for more