The term “war for oil” was popularised during America’s decades long antagonism of its former Iraqi ally. Beginning in 1990, Washington turned its back on Saddam Hussein’s Iraq and in 2003 under George W. Bush, Iraq was invaded, occupied and destroyed. Those opposed to America’s wars on Iraq and even some in favour of the wars remarked that the key interest of the United States was getting its hands on Iraq’s vast oil reserves that had hitherto be controlled by a Saddam Hussein that just prior to 2003 had ditched the petrodollar in favour of the euro.
Since 2003, the US has antagonised other energy rich countries including Libya and more recently Venezuela. But are these wars really wars for oil?
In a Eurasia Future piece form January of this year, geopolitical expert Andrew Kroybko remarked that the US is less interested in controlling Venezuela’s oil supply than it is interested in installing a puppet regime in Caracas in order to better control the international price of oil. If the US with its increased energy output was to effectively control the Venezuela government through a self-evident puppet such as pretender “president” Juan Guaidó, given Washington’s close relations with every other energy producer in the western hemisphere, such a circumstance would allow the United States to rival OPEC and its closest partners.
Under such a scenario, this would mean that the US and its western hemisphere allies could de facto form an energy cartel that would rival the Saudi-Russian energy partnership known as OPEC+. This would eventually result in the following:
1. The United States would have no need for any petro-alliances in the Middle East.
2. The US could effectively destroy Russia’s ability to leverage international markets by having a substantial say in setting the oil price that at present is largely in the hands of Saudi Arabia and Russia.
3. The US could finally sell China something as valuable as the manufactured goods that China sells the United States.
On the latest episode of his radio show Context Countdown, Koyrbko further explained that as the US may soon be the world’s largest oil producer, the aforementioned trends may come about sooner than expected. Korybko said the following on his Radio Sputnik programme:
“The International Energy Agency forecast that the US could become the world’s top oil exporter by 2024…
As of 2017, the US’ Energy Information Agency reported that 37% of US oil exports go to Canada, Mexico, and Brazil, which could conceivably ramp up and spread even further throughout the hemisphere as the US seeks to make its part of the world autarkic per its grand strategy aimed at constructing the geopolitical project of “Fortress America”. With this in mind, it can be expected that the US will use its newfound energy superpower status to advance its geostrategic interests, which could naturally extend to competing with Russia and Saudi Arabia for the growing European and Asian marketplaces too, which might lead to a sustained drop in global prices as the resultant glut makes it impossible for OPEC+ to increase them on demand like before.
Should that happen, then the Russian and Saudi budgets could be hit at a very sensitive time during their planned socio-economic transitions of the “Great Society” and Vision 2030 respectively, which could either scale back those ambitious projects or cause the aforementioned governments to redirect funds from other places such as the military-industrial complex to compensate for any sudden loss of anticipated revenue from resource sales. In either case, this might lead to domestic political reactions from their populations that could further destabilize those countries during this time, which both of them must have anticipated might happen and should be assumed to be responsibly taking preemptive countermeasures to offset this scenario. Correspondingly, these potential consequences are speculative and far from guaranteed.
On the other hand, it can be predicted with much more confidence that the US will take advantage of increased revenue from oil sales to fix its own budget deficit and work on making itself strategically independent from the countries that it was previously beholden to in one capacity or another through treasury bonds or oil purchases. While this is undoubtedly in the US’ self-interest, the weakening of the complex interdependence between it and other countries that was caused by decades of globalist practices might free the US to behave more aggressively against its former partners, which would obviously be to those states’ zero-sum detriment. Even so, it’ll probably take until at least 2030 to see any of these possible outcomes, so a lot can still change before then”.
The most recognisable effects of the trends Kroybko highlights will be a strengthening of Saudi-Russia relations for the very reason that when faced with a US led oil producing bloc (whether a formal or informal bloc) both Saudi Arabia and Russia will see their geopolitical influence weaken. This will be the case because one of the reasons that both Saudi Arabia and Russia are major international players is because of their ability to control the price of oil.
This explains why even now, Saudi Arabia is courting Russia as a petro-partner and China as a partner to help diversify the country’s economy. It also helps to explain why Saudi Arabia’s undeclared but self-evident partnership with Israel continues to grow. If America’s relations with Riyadh gradually decline as the US becomes a competitor to Saudi Arabia in respect of global oil sales, the reality of a large Arab state that is supportive of Israel will hopefully (from Riyadh’s perspective) give Saudi Arabia an insurance policy against further US wars.
This also helps explain Israel’s growing economic relationship with China. If indeed the US becomes less involved in the oil rich Arab world over the next decade, it may mean that the US will be slightly less interested in fighting pro-Israel wars in the region. As such, Israel is looking to forge a long-term economic partnership with China in anticipation of an era in which the US may be less willing plough money and resources into Middle Eastern causes that are favoured by Tel Aviv. This explains why Israel has thus far largely ignored American admonitions regarding its growing economic relations with China.
But most importantly is the issue of how an American energy exporting giant will effect China-US relations. At the moment, whilst Chinese customers still have an appetite for American goods, the reality is that the US will never be able to out produce China and as China transitions from a mass production model to an economic and developmental model focused on high quality production and innovation, the US is ultimately going to fall behind China both in respect of production and eventually in respect of innovation and technology as well.
However, as China remains energy hungry, this could mean that America might soon be a major producer of one thing that China still cannot produce on its own – enough oil to fuel its mighty economy. As such, this forthcoming reality could help assuage America’s fears of “falling behind” China as selling oil to Beijing would give Washington something closer to trading parity with China that for the moment is simply impossible for America to achieve, due to America’s own shortcomings.
On the other hand, it could also set up the US to have leverage against China beyond merely threatening to close its markets to Chinese goods (a threat which could never be fully actualised due to America’s extreme reliance on Chinese products). That being said, if the US is comfortably selling oil to China whilst US businesses and consumers happily import Chinese goods, “oil pump USA” could actually result in a thaw in China-US relations.
Therefore, in all likelihood, the result of America becoming the major oil producer will be one that benefits China-US relations by creating what in Washington’s zero-sum mentality represents “balance”. At the same time, an American oil giant would see relations with both the Arab world and Russia deteriorate as the one trump card that Moscow and Riyadh have in their dealings with the US is their influence over the price of oil. This is the case in spite of the fact that Saudi Arabia is traditionally a close US partner whilst Russia is thought of as quite the opposite.
In this sense, as Donald Trump promised to discard environmental issues and plough on with expanding America’s shale industry, the US President has inadvertently begun a trend whereby the US will no longer need to fright wars for the control of foreign oil supplies, as the US will automatically be kingmaker in setting an international price for oil.
However, the opposite side of this coin is that the US will now be largely immune from the possibility of energy shortages or un-affordable petroleum prices as a result of creating conflicts abroad. This could mean that the US may well exercise even less caution when going to war in the future because the black gold of OPEC+ may soon be dwarfed by that of America’s own production capacity.