March 28, 2012
Analyzing
the events of the Cold War can be done through multiple lenses; however, the
geopolitical dimensions have been recognized as a major factor influencing the
United States (US) and the Union of Soviet Socialist Republics (USSR). The
conflict became a struggle, in which each superpower tried to control resources
as a tool to defeat the other. Although these resources have varied; oil was
consistently perceived of importance, which made the Middle East and the
struggle to control Middle Eastern oil a center of focus for the two
superpowers. This essay will compare how the geopolitical dimensions of oil
impacted the US and USSR differently. I will argue that each superpower had
different motivations for oil, different approaches, and different responses to
oil crises, which in the Soviet case was responsible for its eventual demise.
For
the US, they were also willing to undermine their ideology in favour of
geopolitical interests because they overthrew democratic regimes who were
threatening access to resources. This went against their ideology because the
US advocated for democracy, liberalism, and freedom. For example, in 1953 the
US Central Intelligence Agency (CIA) organized a coup overthrowing the Iranian government
of Mohammed Mossadeq. The geopolitics of oil was the main motivator for the
action because Mossadeq in 1951 chose to nationalize the oil company,
Anglo-Iranian Oil, so the US was fearful that Mossadeq would cut off their
access to oil imports.[ii]
Although the US justified the intervention by accusing Mossadeq of being a
Communist, there was major evidence supporting otherwise. Firstly, Mossadeq did
not align with the Tudeh (Communist) party and they had fundamental
disagreements on major issues, such as the debate over oil concessions. The
Tudeh party wanted to provide the USSR with an oil concession in northern Iraq;
however, Mossadeq said they would only allow commercial agreements to pay for
it.[iii]
He also suppressed a communist-sponsored demonstration on July 15, 1951, which
led to one hundred deaths and more than five hundred injured.[iv]
Mossadeq refused to legalize the Tudeh party and he resisted proposals for coalitions
with the communists. Further evidence that shows that the intervention was
about oil interests was that the US agreed to the coup only after they got agreements
from the UK and Shah to “be flexible in their approach to the government that
succeeded Mossadeq, as far as the oil question was concerned.”[v]
George Kennan summarized the importance of national interests over ideology by
saying that,
“we should cease to talk about vague...and
unreal objectives such as human rights, the raising
of the living standards, and democratization. The day is not far off when we
are going to have to deal in straight
power concepts. The less we are hampered by idealistic slogans, the better.”[vi]
Therefore,
by looking at the Soviet and American case, it is evident that the oil issue
was their primary motivator for policymaking rather than ideology. This shows
that both superpowers were similar in that they believed that oil was a vital
issue; however, they had a considerable number of differences in the way that
they perceived oil, approached oil, and responded to oil crises. These
comparisons will now be discussed.
Different Perceptions
of Oil: Necessity versus Opportunity
The first major difference between
the US and the USSR was their perception of oil, namely how the USSR was not as
dependent on oil at the beginning of the Cold War as the United States was. The
US in 1951 was in great demand for Middle Eastern oil because they were
embroiled in the Korean War, which was resource-taxing.[vii]
Seeing as oil is essential in times of war, possession of these resources
became a weapon of incredible importance and became vital for US survival. The
US also had interests in maintaining a steady oil flow to European states
because it was essential for economic recovery, defense efforts, and to
maintain stability in the region as a way to prevent communism from arising.
All these reasons made the US dependent on maintaining the free flow of oil;
therefore, when these oil sources were threatened, the US saw it as a threat
they had to respond to. Evidence of this was in 1951 when Iranian employees of
the Anglo-Iranian Oil Company at the Abadan refinery operations went on strike
and forced a drastic curtailment of oil exports, which was concerning because
in 1951 Iranian oil exports accounted for over 90 percent of the export total.[viii]
Thus the US organized a coup to ensure that it had a steady access to oil.
For the USSR, their perception of
oil changed. At the beginning of the Cold War, controlling oil resources in the
Middle East was more about opportunity rather than a perceived necessity. The
USSR had a significant quantity of oil within its territory so it did not need
oil for personal use, therefore, during the 1950s and 60s the Soviets had a
surplus in oil and were exporting it to world markets.[ix]
Policy towards Middle East oil was more about the desire to exploit the major
power vacuum in the area that arose after the end of the Second World War. The
USSR wanted to have a monopoly in oil in order to deny the US access and
prevent the oil from contributing to western military and industrial power. The
US referred to it as the Soviet “oil offensive.”[x]
The Soviet surplus did not last and after 1966, the USSR faced the problem of
oil consumption increasing faster than production and the strategy was forced
to change. The situation deteriorated after 1973 as the USSR began having
difficulty meeting rising home consumption needs, supplying its satellites in
Eastern Europe, and exporting oil to other states.[xi]
Therefore, similar to the US, the Soviet approach changed from opportunity to
necessity when they became more dependent on Middle Eastern oil resources.
Instead of using alternative resources,
such as nuclear energy or natural gas, the USSR decided to not be concerned
with maintaining self-sufficiency. The costs were rising in exploiting the oil
in Siberia because of the severe winter climate making it hard to access, the
remoteness of the region, and the lack of infrastructure. This meant that
importing Middle Eastern oil became more economically beneficial as the USSR
could obtain oil at a cheaper rate. They began exporting oil to Western
European countries, such as Italy, Austria, West Germany, and Greece at a much
lower price.[xii] As
a result, the USSR became more dependent on Middle Eastern oil imports, which
was evident with the increase from 148 million tons in 1960 to 353 million tons
in 1970.[xiii]
When comparing the superpowers, it was not only the perception of oil that
differed but their approach in securing these oil imports.
Different Approach
to Oil (Colonial versus Commercial Approach):
Although both states made extensive
efforts to control Middle Eastern oil, their approach differed substantially.
The US can be said to have had a more colonial approach, while the Soviets
pursued a commercial approach. The US preferred a more colonial approach where
they could have full control of the territory by obtaining a concession with
which they could search for oil. They also bought oil under contract from oil
companies, and they formed partnerships with national oil companies.[xiv]
Securing their interests was extremely important and they first did this through
indirect and direct military intervention. The direct military intervention in
the region can be seen with the military troops being sent to Lebanon in 1958,
and the purpose of the “military in the Middle East [was] to guarantee that
whatever comes out of the ground is exploitable and controlled by American
multinationals.”[xv]
Indirect military intervention was most evident with the 1949 CIA-backed coup
in Syria overthrowing President Shukn al-Quwatli, or the 1953 CIA-backed coup
in Iran overthrowing Mossadeq. Instating leaders that they could control was a
part of their “surrogate strategy”, where they would arm local leaders to
protect US interests.[xvi]
When the Iranian revolution occurred the US re-evaluated their approach and
began using the threat of military intervention to secure US interests in the
Middle East. This was evident with the Carter Doctrine, which stated that “any
attempt by any outside force to gain control of the Persian Gulf region will be
regarded as an assault on the vital interests of the United States...and any
such assault will be repelled by any means necessary, including military
force.”[xvii]
This approach was different from the
USSR because the Soviets tried to develop more of a commercial approach until
1979 with the invasion of Afghanistan. This is not to say that the USSR did not
have colonial tendencies either. At first the Soviet strategy included indirect
interventions where Soviet advisors would provide technical assistance to aid
local communists implement coups. However, this changed because “a more
conciliatory approach [was] being used to promote the USSR’s image as a
respectable world power interested in regional stability.”[xviii]
The Soviets preferred to cooperate using barter deals, with oil for
manufactured goods; or service contracts where they would provide states for
oil exploration supplies, drilling equipment, and technical assistance in
exchange for oil or reimbursement. It was recognized that the USSR “ha(d)
become a Middle East power, not by outright aggression, but by invitation from
Arab countries.”[xix] The
Soviet commercial policy led to many shortcomings because they did not have
political control. For example, although the USSR signed oil agreements with
Iraq in 1969, they did not have political control because Iraq continued to
sell to the West and it opposed the Rogers Plan, which was a strategy to end
the Arab-Israeli conflict that the Soviets supported.[xx]
The Soviets continued with the commercial policy though because it recognized
that these indirect interventions could lead to a direct confrontation with the
US, especially because leaders, such as Jimmy Carter stated that an attack on
American interests would result in a US military response. Another reservation
that the USSR had towards a Soviet colonial policy was that it would result in
Arab states moving towards the West out of security concerns.[xxi]
This was evident when the USSR invaded Afghanistan because Saudi Arabia became
apprehensive and reacted by signing military and arms agreements with the US. Therefore,
it is evident that superpowers took different approaches to obtaining oil.
Another difference between the US and USSR was that they responded differently
to events and movements. The movement of Nationalism in the Middle East was
most significant during the Cold War, and was responsible for many state
leaders nationalizing their oil industry. This inspired different reactions
from the superpowers.
Different Response
to Nationalism (Threat versus Potential Opportunity)
The nationalization of oil
industries in the Middle East had different reactions from the US and the USSR
because it was perceived as a threat by Americans, while the Soviets perceived it
to be a movement they could align with. The US relied greatly on having the
Middle East maintain a service role, so that the US could have access to cheap
oil and opportunities for investment. As George Kennan said in 1948, the US has
“about 50% of the world’s wealth, but only 6.3% of its population;” therefore,
“our real task in the coming period is to devise a pattern of relationships
which will permit us to maintain their position of disparity...to do so, we
will have to dispense with all sentimentality and day-dreaming; and our
attention will have to be concentrated everywhere on our immediate national
objectives.”[xxii]
Therefore, nationalizing the
oil industry was seen as an attempt to disrupt their position of disparity and
was seen as a tool by the Soviets to exclude the US from Middle Eastern oil.
The USSR on the other hand, saw it
as an opportunity and encouraged states to nationalize the oil companies because
it would weaken the west and mean that the US could no longer exploit the
resource for its personal gain. Nationalism in the Arab world was led by the
“national bourgeoisie,” who were the “local industrialists, merchants, and
bankers who want[ed] to promote capitalist development in their native country.”[xxiii]
They were first underrated by the USSR as a class that was “numerically weak
and hence of no great political consequence;” however, the Soviets soon
realized the strength of the movement and their hostility to western
imperialism, thus seeing it as an opportunity to exploit.[xxiv]
They saw the nationalists as progressive in character because they wanted to
reform the economic order and end western imperialism. The problem with
supporting nationalism was that the alliance was not always so clear. There
were still major differences between Nationalism and Communism. For example,
the National Bourgeoisie were unwilling to eradicate the feudal remnants in
their regimes because it served their interests, so they were more afraid of
the native proletariat than of foreign imperialism.[xxv]
This was a significant disagreement so many of these states were unpredictable
and in many cases they purged their state of communists, such as Mossadeq in
Iran, as well as Gamal Abdul Nasser in Egypt. As a result of this, “the Soviet
view of the Arab states has been of a more conservative attitude than during
the days of her headlong dash to fill the vacuums created by the withdrawal of
the Colonial powers.”[xxvi]
Debate emerged about whether these alliances
were undermining the Communist movement and whether it was politically
dangerous to assume that nationalism would lead to socialism or that this would
lead to Soviet political power.[xxvii]
The rise in nationalism led to more independent action by the Arab nations,
which was evident when they formed the Organisation of Petroleum Exporting Countries
(OPEC). Since both the US and USSR were dependent on Middle Eastern oil,
actions by these states had a major impact. When oil crises occurred, the
superpowers were both impacted differently and it led to mixed responses by the
superpowers.
Different Responses
to Oil Crises (Diversification versus Free-Market Liberalization)
The first major oil crisis began in
1973 when OPEC decided to raise prices and implement an oil embargo in response
to the outbreak of the Arab-Israeli war. Petroleum producers in the Third World
were also discontent with the disadvantageous economic relationship they had
with the West. The Shah of Iran explained this in 1973 when he said:
“you [western nations] increased the
price of wheat you sell to us by 300% and the same for sugar and cement...you buy our crude oil and sell it back to
us refined as petrochemicals, at
a hundred times the price you’ve paid to us... it is only fair that, from now on, you should pay more for oil.”[xxviii]
OPEC first agreed to a price increase, which raised
oil prices by 70 percent, and $5.11 a barrel.[xxix]
They then decided on an oil embargo on non-friendly states, a five percent cut
in production, and subsequent cuts in production until a resolution is found.
In response to the US aid to Israel, OPEC implemented an embargo on the US and
the price increased to $12 a barrel. This had a dramatic impact on the US. They
faced major economic difficulties, oil shortages, and lower economic growth.
The US also lost support from states, such as Japan and European states who
were dependent on Middle Eastern oil. The US only imported 12% of oil from the
Middle East, while Japan imported 90%, and Europeans imported 80%. Therefore,
these states politically supported the Arabs during the war, in order to get
the oil embargo removed. The US response to the oil crisis was to lessen
dependence on oil and revert to other alternatives, such as natural gas and
nuclear energy. They also implemented regulations and price controls
domestically, in order to minimize the adverse effects on the state.
The USSR had a different experience
with the oil crises because the Soviets lessened its dependence on oil imports
and began exporting more oil because of the price increase, as well as the
resources in the Caspian Basin and Siberia became more cost effective. Soviet
oil production and export increased to such a degree that it became the world’s
largest producer of oil by 1980. Therefore, the 1973 oil crisis did not have
negative impacts as it had in the US; however, it was when these oil prices
dropped in the 1980s that the Soviets suffered drastically. The oil glut led to
unprecedented price cuts by OPEC members. Reasons for the crisis was because
there was less demand due to alternative energy sources, but mainly it was
because the OPEC members became divided. Many members were cheating and price
discounting, which undermined the agreement on production limits. The war
between Iran and Iraq also divided the region. Saudi Arabia had major security
concerns because of the Iranian revolution but also because of the Soviet
invasion of Afghanistan, which led it to move closer to the West. As a result,
Ronald Reagan was able to convince Saudi Arabia to increase oil production and
sell it at a lower rate, which led other states to reciprocate, thereby leading
to a decrease in oil prices.[xxx]
Reagan knew that the Soviet Union was dependent on oil exports to Europe so
their strategy was to make oil inexpensive in order to bankrupt the USSR. The
average world oil prices fell by more than 50 percent by 1986, which caused
major economic issues for the USSR that ultimately it could not recover from.
The oil glut led to the Soviet
decline for numerous reasons. Firstly, the low price of oil meant that they
could not make a profit on exports so their hard currency reserves became
depleted, they faced an economic recession, and the debt increased. The USSR
tried to reduce the debt by decreasing imports and increasing oil exports. The
lack of hard currency eventually led the USSR to lose control of its Eastern
European Satellites because it could not afford to fund its own development as
well as that of the Eastern Bloc.[xxxi]
The Soviets needed hard currency so that it could continue to provide aid to
support the Satellite states. The USSR exported oil to these states at low
prices; however, they had to choose between depleting its own supplies and
sending oil to the Bloc; or permit these states to import oil from
non-communist producers.[xxxii]
The USSR agreed on the latter, which was significant because the USSR had
always dominated these states by controlling their primary energy source, oil. The
Soviet client states thus became dissatisfied with Soviet economic assistance
and began trade agreements with countries in the West.[xxxiii]
The struggling economic state in the USSR caused it to move from an autarky
policy towards free market liberalism and the opening up of their markets. This
was another reason that the Soviet Union declined because it undermined the
Soviet ideology of a planned economy. In March 1991, Gorbachev announced that
the Soviets would be cutting its oil exports by almost 50 percent and later
that year the USSR collapsed.
In conclusion, it is evident that
the geopolitics of oil played a different role for both the US and the USSR in
their perception of oil, their approach to oil, and their response to oil
crises. The role of oil during the Cold War was so significant that it can be
attributed to the decline of the Soviet Union, and thereby an end to the Cold
War itself. The history of state dependence on Middle Eastern oil did not end
during the Cold war, but rather it is an issue debated among scholars and
politicians today. The geopolitics of oil continues to be a paramount feature
of US foreign policymaking, which has led to effects equally damaging to the
region as well as the dependent states. In order for the cycle of exploitation
to stop, the approach to oil needs to be reconsidered and history needs to
serve as a lesson for policymakers.
[i]
Walter Z. Laqueur, “The 'National Bourgeoisie': A
Soviet Dilemma in the Middle East,” International
Affairs 35, no. 3 (July 1959): page 325.
[ii] Mark
Gasiorowski and Malcolm Byrne, “Mohammad Mossadeq and the 1953 Coup in
Iran,” The National Security Archive, http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB126/index.htm (accessed
March 20, 2012).
[iii] James S. Lay, “United States Policy Regarding the Present Situation in
Iran,” Report to the National
Security Council (Nov 20,
1952), http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB126/iran521120.pdf (accessed March 20, 2012)
[iv] Richard J. Barnet, Intervention and Revolution in the Third
World (New York: World Publishing, 1968), 225-30.
[v] Donald N.
Wilber, “Clandestine Service History: Overthrow of Premier Mossadeq of Iran,”
New York Times, http://cryptome.org/cia-iran-all.htm (accessed
March 25, 2012), page 17.
[vi] George Kennan,
“Memo Policy Planning Study 23,” Foreign
Relations of the United States 1,
no. 2 (1948): 524-25
[vii] Alfred
Machaelis, “The Middle East Economy in 1950,” Middle
East Journal 5, no. 2 (Spring
1951): 223.
[viii] Ibid, 226.
[ix] John A. Berry,
“Oil and Soviet Policy in the Middle East,” Middle
East Journal 26, no. 2
(Spring 1972): 149.
[x] Ibid.
[xi] Ibid, 150.
[xii] Ibid, 149.
[xiii] Ibid, 150.
[xiv] Berry, 156.
[xv] Johnny Angel, “USA: It's the Oil,
Stupid,” available at http://corpwatch.org/article.php?id=7, accessed
on 21.03.2012
[xvi] Joe Stork and
Martha Wenger, “The Us in the Persian Gulf: From Rapid Deployment to Massive
Deployment,”Middle East Research and Information Project (MERIP) no. 168 (Feb 1991): 22.
[xvii] Jimmy Carter,
“The State of the Union Address Delivered Before a Joint Session of the
Congress.,” The American Presidency Project, http://www.presidency.ucsb.edu/ws/index.php?pid=33079#axzz1qSquH4P6 (accessed
March 20, 2012).
[xviii] Wilbur S.
Green, “Soviet Strategy in the Middle East,” US
Army War College (20 February
1973):14.
[xix] Ibid, 15.
[xx] Berry, 157.
[xxi] Berry, 156.
[xxii] Kennan.
[xxiii] Laqueur, 328.
[xxiv] Ibid, 327.
[xxv] Ibid, 328
[xxvi] Wilbur S. Green, 17.
[xxvii] Laqueur, 328.
[xxviii] William D. Smith, “New Rises Are Feared;
Price Quadruples For Iranian Crude Oil at Auction Kuwait Oil Deal Reported,” New York Times, December 12,
1973.
[xxix] Daniel Yergin, The Prize: The Epic Quest For Oil,
Money (New York: Simon &
Schuster, 2008), 587.
[xxx] Douglas
Reynolds, “Soviet Economic Decline: Did an Oil Crisis Cause the Transition in
the Soviet?” The Journal of
Energy and Development 24,
no. 1 (Autumn 1998).
[xxxi] Ibid.
[xxxii] Berry, 149.
[xxxiii] Ibid, 160.
No comments:
Post a Comment