Oil Price Warfare

September 1, 2006 Topic: Security Regions: Persian GulfMiddle East Tags: Gulf WarPeak Oil

Oil Price Warfare

Mini Teaser: War with Iran does not appear imminent and the prospect has not been a hot electoral issue. But Howard explains why war with oil-producing nations will likely be wholly unanticipated.

by Author(s): Roger Howard

While oil-price warfare dictates the need for quick, decisive campaigns in the field, so too will future military planners also have to think on a longer-term basis than ever before. This is not because of any need for "nation-building", for example, but because oilfields and refineries have a strategic importance. They would need protection from insurgent attack long after a military campaign has been fought and won.

Iraq provides one example of the need for such a long-term commitment. Local insurgent groups know the economic damage they can inflict by disrupting the oil supply, and so have made the sabotage of Iraq's pipelines, pumping stations, and loading terminals a strategic priority. Between January 2004 and September 2005, insurgents conducted 230 major attacks on Iraq's oil infrastructure, causing billions of dollars in losses. Defending these installations has required the deployment of American soldiers and private guards, who are currently protecting two main components of Iraq's oil infrastructure: the Kirkuk-to-Ceyhan export pipeline in the north, near Iraq's border with Turkey; and offshore loading terminals in the south, on the edge of the Persian Gulf. So even in the event that much of the local insurgency is dampened and most of the country handed back to the Iraqis, the importance of the oil industry would still necessitate a strong U.S. military presence to guard its central infrastructure from the risk of attack.

In the years ahead, the more the price of oil increases, the more tempting oil pipelines and installations in every corner of the world will be as targets for insurgents. This means that oil importers such as the United States, which is expected to become ever more dependent on imported energy resources, will be equally tempted to strike deals with foreign governments to take responsibility for the security of local oil infrastructures deemed to be particularly at risk. If there is any significant breakdown of law and order in Saudi Arabia, for example, Washington could well seek to undertake some responsibility for the security of these installations, an offer that the Saudis, despite their concerns for national independence, might be forced to accept. Any such responsibility, however, would probably necessitate a long-term commitment.

Any such commitment would have important repercussions. It would mean that Washington would be forced to prevent any material overstretch by prioritizing the security of such oil installations at the expense of other existing, or putative, military commitments, whether they have military or humanitarian ends. This would force policymakers to be immune to the whims of public opinion that clamor for intervention in places that catch the media's attention. U.S. officials would also have to find ways of selling to their electorates the burden of such commitments, making clear, as the body bags return and financial demands get heavier, that the material and human costs involved are outweighed by the benefits of a steady price of gasoline.

The Dangers Ahead

Without any real strategic competitor to contend with since the end of the Cold War, U.S. military chiefs have in recent years had the luxury of a large margin for error when planning their operations. But this is now coming to an end, as a highly sensitive oil price threatens to destabilize the execution of even the most carefully considered plan. Yet the advent of oil-price warfare that is designed to minimize the risks of any market spike is far from being a perfect solution and will instead bring almost as many dangers of its own. Any country that wages surprise attacks against its enemy, for example, is unlikely to have adequate resources for a protracted fight but easily risks being labeled as an aggressor, while the need for long-term commitment in oil-producing regions will run contrary to the short attention spans of Western electorates, whose confidence in such ventures has in any case been badly eroded by American experiences in Iraq, Somalia and Vietnam.

Those who wage oil-price warfare in the years ahead could, it seems, become casualties of their own tactics, just as much as their supposed targets.

Essay Types: Essay