Andy Peters said:
JohnRoberts said:
PS: A popular argument is that all conflict in the middle east is all about oil (mostly true), and little appreciated is that Russia is a huge energy exporter, so at a time when world oil supplies are actually growing who benefits from fear of instability kicking up oil prices?
You're right -- the popular argument is that it's "all about oil" -- but that's less than mostly true.
It's all about oil MARKETS, and maintaining their stability. The myth is that America gets a significant amount of oil from the Middle East. The reality is that the oil markets don't like supply shocks. So while we get our oil from the Gulf of Mexico or wherever, the oil market is global, so when the missiles start flying over the desert, the market reacts and prices go up.
Our supply isn't significantly disrupted, but our prices are.
Yes oil is fungible and freely traded worldwide. The Saudis act as a marginal supplier to maintain high prices for the oil cartel, but not so high that it damages the western economies. A smart parasite doesn't kill it's host. The Saudis have long tried to work both sides of the street... Ironically world pricing is dominated by the price of north sea "brent" while only a fraction of the world supply comes from there. We have long had local marginal pricing distortions in the US based on where the oil is and where the refiners are that can take that crude and value-add it into more valuable refined product.
Despite a contrary federal policy US oil supplies are up so much in recent years that they had to reverse one pipeline direction to pump oil in the opposite direction. The use of railroad cars to move oil from new fields to refiners is up huge. We are not far from becoming a net energy exporter. The new pipeline from canada to gulf coast that the federal government has successfully blocked for years, would likely end up as re-exported refined product from the gulf coast. I believe we may already be exporting diesel, but it is against the US laws (I think) for us to export crude. While they are already building facilities in anticipation of exporting LNG to capture the huge difference between the excess NG here and much higher prices in international markets. Gas is not as portable as crude oil so local pricing dominates regional markets (cheap here/expensive elsewhere).
Thus, the Saudis depend on our dependence on a stable oil market. We defend them, and by extension the region at large, to ensure that stability. They take advantage of that, mainly by assuming that the US will step in to quell regional unrest. That assumption has proven true again and again.
Indeed there is a quid pro quo of security assistance for free flowing oil westward.
For those keeping a regional dance card the Saudi kingdom is only 15% Shiite, so they mostly support regional Sunni factions. But agains it isn't just this simple. The western presence in Saudi lands is considered offensive to radical Islam as a couple of the highest holy sites in the region are on Saudi land.
The Saudi royals use their great wealth to keep the serfs in line with bread and circuses, and one imagines those royals are trying to ensure that the Arab Spring doesn't reach their doorstop. (Their heads will be on the pikes.) They don't want to be seen as taking sides against Assad (or against the other leaders who have been deposed, like in Tunisia and Egypt), because that would encourage dissidents in their country to emulate those rebellions.
IIRC Saudi money, probably more for appeasement of local militant elements than distraction (bread and circus), has been traced to alkieda and helped fund the 9/11 attack on US soil. The Saudis have since backed away from broad appeasement and become more hard line against internal radical elements, but they have a dangerous situation. The Saudi revolution is playing out in proxy and slow motion in some smaller nearby neighbors, Yemen better know for piracy is a direct risk for incubating problems for the saudi kingdom.
One long term attempt by the Saudis to help improve regional stability is a program to rehabilitate radicals so they can renter that society peacefully. While they have far less than 100% success rate it is a worthwhile pursuit and they are not just twiddling their thumbs and waiting for us to solve the problems in the region.
So the House of Saud is in quite the pickle. They are the main regional power with the stability and the strength to do something about Syria but they won't.
They have a demographic bomb with huge fraction of educated disaffected youth, growing weary of the aging authoritarian monarchy. The few examples of democracy in the area have more influence than people give credit to. A difficult situation for all authoritarian governments.
Aside: It would be an interesting experiment if the US were to stop being the cop on the beat there and let the Saudis defend their oil supply and shipping. Maybe the Chinese can step in and ensure their oil needs are met? The markets would sh*t their pants short-term, of course.
-a
The US has been withdrawing for the last several years and China and India have been stepping up their world military presence. While China or India are not in any position to demonstrate compelling force in the middle east yet, they are pedaling as fast as they can to build up their navy in the Pacific closer to home. Give them another 10 years if we and they both follow the current trajectory (us shrinking/them expanding). China and India both buy oil from Iran already so they have interests in the region too.
The elephant (camel?) in the room for the Saudis wrt the US is that we are approaching energy independence. Canada would love to send us even more, and mexico has just amended an old law that prohibited international oil companies from exploiting mexican oil, so I see the north american energy supply situation strongly increasing.
Oil cartels are all about controlling the marginal barrels of oil... When we get in the position to take that power away from the cartels, the saudis lose their huge influence with us.
But this thread is about Syria, and this IMO is not about oil, it's about Iran and their desire to become a nuclear state. An experiment I would rather not see play out, but i don't see that effort significantly slowed so far. One recent report suggested they could reach the critical capability to process low-enriched uranium by mid next year ("could", not will). This is another one of Obama's lines in the sand that will be tested, and a good show here in Syria over the poison gas red line will be seen and register with Iran. Not to mention Syria and hezbollah are Iran's peeps so it's personal for them too.
JR