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Implications of US' growing power in global oil politics | Daily Sabah – Daily Sabah



Global oil politics have been relatively unstable ever since the end of World War II. This is because the control over the oil market is crucial in positioning the world powers on the stage of the international political economy. In a simple word, who owns the oil, owns all.

At present, in terms of crude oil output, the current top three oil-producing countries in the world are the United States, followed by Saudi Arabia and Russia. However, does the U.S. really own the oil power in the world?

To answer this, we have to revisit the events of the first and second oil shock which significantly shaped the U.S. today.

The first shock

The Middle East and North Africa is home to two-thirds of the world’s oil reserves. This was the primary reason for the U.S. to lay its interest in the region decades ago.

During the 1973 Arab-Israeli war, the Organization of the Petroleum Exporting Countries (OPEC) had instigated an oil embargo against the U.S. in retaliation for the country’s decision to supply Israel with military aid. This event marked the first oil shock in global oil politics.

Several other countries that supported Israel and the U.S. were also bound to the embargo, including South Africa, the Netherlands and Portugal. The embargo had halted oil export activities to the targeted countries and cut oil production, resulting in an extreme oil shortage in those countries. The situation was more alarming as almost all flights had to be canceled and factories started to shut down their operations.

The U.S. employed double-edged sword strategies, not only to put an end to the embargo imposed by OPEC but also to stop its dependence on oil-producing countries in the long-term.

First, the U.S., under the administration of President Richard Nixon, launched an energy policy known as “Project Independence” to make the U.S. independent from relying on other countries in acquiring energy sources.

On the other hand, the U.S. aided the Arab countries by acting as a mediator to resolve the disengagement between Egypt and Israel in 1974.

Within the same year, the U.S. also helped to achieve a peace agreement between Syria and Israel. Following the U.S.’ successes in mediating those conflicts, OPEC ended the oil embargo imposed against the U.S.

The second shock

During the 1979 Iranian Revolution, the world was once again struck by an oil shock due to the extreme reduction in oil production in Iran. It is worth mentioning that Iran supplied almost 5% of the total oil and petroleum consumption in the U.S.

At the same time, the U.S. was also known as a close ally to the secular shah of Iran. With oil industry workers joining the strike, the Iranian oil industry suffered from a total paralysis with a reduction of oil production from 5.5 million barrels per day to only 2.4 million barrels in late 1978.

It had caused the oil price to skyrocket from $2 to $14 per barrel. By 1979, there was almost no production of oil at all. Therefore, the triumph of Ayatollah Khomeini’s regime in overthrowing the long-standing monarch was indeed not a good sign for the U.S. either.

Eventually, the dispute between Iran and the U.S. had transformed into political distress. This was the beginning of the bitter and hateful relationship between the two countries.

The two oil shocks left the U.S. with an important lesson, that to be economically dependent on other nations has more risks than actual benefits.

Present domination

It is observed that the U.S. is still significantly influential in global oil politics despite the presence of the long-standing OPEC. Rather than using the word “dominant,” it is more preferable to say that the presence of the U.S. allows it to “rebalance” global oil politics from domination by a specific organization or country.

Noting the track record of the U.S. in oil power, all U.S. presidents, from Nixon to Donald Trump, have been very committed to the agenda of making the U.S. independent from other countries in terms of energy sources.

At present, the U.S., Saudi Arabia and Russia champion the world production of oil and petroleum. In short, they are the main actors in global oil politics.

For example, in 2019, the U.S. Energy Information Administration revealed that the U.S. produced 19.51 million barrels of oil per day, followed by Saudi Arabia in second place at 11.81 million and Russia at 11.49 million.

Of these, the U.S. has become the largest oil-producing country, constituting 19% of the world’s total oil production. Even Saudi Arabia, as the central power in OPEC, is not able to produce as much oil as the U.S. does.

Nonetheless, one should not also neglect the fact that OPEC is also still powerful and relevant in exerting its influence over the global oil political economy through holding 80% of the world’s oil reserves.

OPEC members, especially Saudi Arabia, constantly compete with the U.S. and Russia for domination and supremacy in the oil price market.

In recent years, several measures have been taken by OPEC to increase oil prices by reducing oil production in all member states. Furthermore, OPEC and Russia also agreed to reduce oil production in order to increase oil prices in 2019, even though Moscow initially refused to go along with the proposal. The effort succeeded in increasing oil prices in 2019 and 2020.

However, several internal factors, especially the constant political turmoil in the Middle East and North Africa region, political differences between members of OPEC and a significant increase in U.S. shale oil production in recent years, have shaken the supremacy of the organization in global oil politics.

Moreover, the rise of new non-OPEC oil-producing countries such as Canada and China have also loosened the dominance of the organization in determining the oil market price.

On top of that, the U.S. also steadily contributes to increasing global oil production over the years following the “U.S. Shale Revolution.”

It can be observed that the U.S. currently enjoys its growing power in global oil politics. For instance, the Robust Strauss Centre for International Security and Law noted that the U.S. contributed to oil price increases in 2018 and 2019 by imposing sanctions on Iran and Venezuela.

The high production of oil and petroleum in the U.S. indeed benefits its domestic economic growth. Nevertheless, the question of whether the U.S. has fully dominated global oil politics remains largely debatable.

There is no definite answer to this question on who really owns the oil power between the U.S., Saudi Arabia or Russia.

One thing is for sure, the growing power of the U.S. in oil politics is very influential in creating a more balanced and competitive oil market, avoiding any domination or monopoly by a specific organization, region or country. This might sound very positive, but the effect is it causes oil prices to be constantly fluctuating.

*Lecturer of Malaysian Studies (History and Politics) at the Netherlands Maritime University College, Malaysia and holds BA of Political Sciences from the International Islamic University, Malaysia

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Beijing huddles with friends, seeks to fracture U.S.-led ‘clique’



By Gabriel Crossley and Yew Lun Tian

BEIJING (Reuters) – China is shoring up ties with autocratic partners like Russia and Iran, as well as economically dependent regional countries, while using sanctions and threats to try to fracture the alliances the United States is building against it.

Worryingly for Beijing, diplomats and analysts say, the Biden administration has got other democracies to toughen up to a rising, more globally assertive China on human rights and regional security issues like the disputed South China Sea.

“China has always resolutely opposed the U.S. side engaging in bloc politics along ideological lines, and ganging up to form anti-China cliques,” the Chinese foreign ministry said in a statement to Reuters.

“We hope relevant countries see clearly their own interests…and are not reduced to being anti-China tools of the U.S.”

After last month’s stormy talks between top U.S. and Chinese diplomats in Anchorage, Beijing also appeared to engage more urgently with countries like Russia, Iran and North Korea, which are also on the wrong end of U.S.-led sanctions.


“China is very worried about U.S. alliance diplomacy,” said Li Mingjiang, associate professor at the S. Rajaratnam School of International Studies in Singapore, pointing to what he calls attempts to “huddle for warmth” with governments shunned by the West.

Days after the Alaska meeting, the Chinese government’s top diplomat, State Councillor Wang Yi, received Russia’s foreign minister Sergei Lavrov, who called for Moscow and Beijing to push back against what he called the West’s ideological agenda.

A week later, Wang flew to Iran and signed a 25-year economic pact, which Renmin University professor Shi Yinhong said “effectively exposes every Chinese company participating to direct or indirect U.S. sanctions.”

President Xi Jinping, meanwhile, exchanged messages with North Korean leader Kim Jong Un, calling for a deeper partnership with another country whose ambitions for nuclear arms has drawn sanctions.

China is also wooing its economically dependent neighbours. Wang hosted foreign ministers from Indonesia, Malaysia, the Philippines, Singapore and South Korea in China’s southeastern Fujian province in recent weeks.

Li said Beijing will be holding out promises to help these countries revive their economies after the COVID-19 pandemic, making them think twice about siding with the United States.

After Philippines diplomats and generals accused China of sending militia-manned vessels into their waters, President Rodrigo Duterte said he was not going to let territorial disputes in the South China Sea get in the way of working with China on vaccines and economic recovery.


Biden has continued to pressure Beijing on many of the same issues the Trump administration did, but with a more alliance-focused strategy.

At a meeting between Biden and Japanese Prime Minister Yoshihide Suga on Friday, the two countries presented a united front against China’s assertiveness, on issues ranging from the disputed East China Sea islands known as Senkaku in Japan and Diaoyu in China, to rights issues in China’s Hong Kong and Xinjiang region.

Last month, the United States, the European Union, Britain and Canada imposed coordinated sanctions over reports of forced labour in China’s western Xinjiang region, while over a dozen countries jointly accused China of withholding information from an investigation into the origin of the COVID-19 pandemic.

Germany, Britain, the Netherlands, Canada and France all recently joined the United States in sending warships through the disputed South China Sea, or announced plans to do so.

Washington also said it wants a “coordinated approach” with allies on whether to participate in the 2022 Winter Olympics in Beijing, amid concerns over human rights violations, particularly related to the treatment of Uighurs and other Muslim minorities in Xinjiang.


China has responded angrily to shows of unity by Washington’s allies, with its diplomats dubbing Japan a “vassal” and Canada‘s Prime Minister Justin Trudeau a “running dog” of the United States.

China’s strategy to weaken this unity revolves around encouraging U.S. allies to engage independently with Beijing, and put the economic benefits first, while punishing them if they engage in joint-action against China.

Beijing responded to the EU’s sanctions of Chinese officials over Xinjiang with disproportionately harsh counter-sanctions, analysts said, potentially torpedoing a long-awaited investment agreement.

Janka Oertel, director of the Asia Programme at the European Council on Foreign Relations, believes Beijing is prepared to sacrifice economic benefits for core interests if they are threatened by the U.S.-EU alliance.

Xi drove home the message in a recent phone call with German Chancellor Angela Merkel, telling her that he hoped “the EU will make a correct judgment on its independence”.

But China still needs European technology and investment, said Joerg Wuttke, president of the European Chamber of Commerce in China.

“They still talk to us, despite the sanctions, business keeps going, and that’s very reassuring.”

Beijing has not given up persuading Washington that cooperation is better than competition, as demonstrated last week when it assured U.S. climate envoy John Kerry of support for Biden’s virtual climate summit this week.

“China hopes Washington can appreciate that it is in U.S. interests to have China as a friend rather than as a foe,” said Wang Wen, a professor at the Chongyang Institute of the Renmin University of China.


(Reporting by Gabriel Crossley and Yew Lun Tian; Editing by Tony Munroe & Simon Cameron-Moore)

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Prince Philip took a keen interest in Canada, but stayed above politics, former GGs and PM say



When former Canadian prime minister Jean Chrétien met the late Prince Philip for the first time, he told him that for an Englishman, his French was very good.

“He said ‘I’m not English and I’ve spoken French since before you were born,’” Chrétien told the Star Friday, commenting on his many encounters over 50 years with the Duke of Edinburgh.

“He was not dull, let me put it that way,” Chrétien said. “He had some strong views. Sometimes he had to show discipline to not speak up more than he would have wished.”

Philip, born in Greece in 1921 and husband to Queen Elizabeth II for over 73 years, died at the age of 99 on Friday.

Prime Minister Justin Trudeau, who said he first met Philip when he was a little boy, described him as “a man of great purpose and conviction, who was motivated by a sense of duty to others.”

Former prime ministers and governors general spoke of a man who understood his role and knew not to get involved in politics, but who was very knowledgeable about Canada and took a keen interest in the country’s success.

“I was always impressed by their knowledge,” Chrétien said of Philip and the Queen, Canada’s head of state.

He said he can recall Philip asking about the prospect of Quebec separating from the rest of the country. “Not in a very political fashion, just in terms of interest. Of course he was interested to not see Canada break up. He would certainly say that to me.”


Statements from former prime ministers Paul Martin and Stephen Harper highlighted Philip’s devotion to the Canadian armed forces and charitable organizations, as well as the Duke of Edinburgh’s Award, an international self-development program for young people.

Former governors general David Johnston and Michaëlle Jean, through their role as the Queen’s representative in Canada, were also able to get to know Philip more intimately, particularly at the Queen’s Balmoral Castle estate in Scotland.

Jean recalls being “overwhelmed” by all the protocol recommendations ahead of a Balmoral visit with her husband and six-year-old daughter prior to taking office in 2005, only to find Philip and the Queen greeting them at the door, with Philip paying special attention to her daughter.

“The memory I keep of Prince Philip is that of an affable, caring, elegant and warm man,” Jean told the Star, adding he was a man who was very attentive to detail.

She recalled attending a barbecue on the Balmoral estate, just the four of them, and Philip telling her, “Don’t forget to congratulate Her Majesty for her salad dressing, because she made it herself.”

What Jean also saw was a man sometimes hampered by the limitations of his role, like when he talked about one of his favourite topics, the environment.

“He said ‘I do a lot about it, I raise awareness, I take actions…I feel that whatever I do, no one cares,’” Jean recounted. “What I got from that is how lonely he felt…There was a sense of not feeling appreciated in proportion to his contributions, a feeling of being misunderstood.”

Johnston, who succeeded Jean, said Canada’s constitutional monarchy — where the head of state is politically neutral and separate from elected office — is an “important and precious” form of government, and Philip was key to making it work.

Philip showed leadership as a servant, Johnston said, “not taking centre stage, but by ensuring that the Queen and the monarchy were front row and centre.



“He played such an important structural role, and did that with great diligence and commitment. He was selfless in that respect,” Johnston said in an interview.

For Matthew Rowe, who works on the Royal Family’s charitable endeavours in Canada, the Duke of Edinburgh’s political value to Canada was precisely that he was not political — that he, along with the rest of the monarchy, provided a stabilizing force outside of the partisan fray.

He was dynamic, irascible, exasperating, intriguing. And he was always three steps behind his wife, Queen Elizabeth, who utterly adored him throughout their 73-year marriage, flaws, faux pas and all.

“His presence, and the role of Her Majesty and other members of the Royal Family, has been to be able to represent the nation, to represent Canadian interests, and commemorate Canadian achievements without being tied to a particular political ideology or regional faction,” Rowe, who met Philip at a ceremony at Rideau Hall in 2010, said in an interview.


Philip’s role meant he could speak more frankly than the Queen in public, and spoke “quite thoughtfully” about the constitutional monarchy in Canada, said University of Toronto history instructor Carolyn Harris.

At a press conference in Ottawa in 1969, Philip famously said that the monarchy doesn’t exist “in the interests of the monarch…It exists solely in the interest of the people. We don’t come here for our health. We can think of other ways of enjoying ourselves.”

Philip had a good, joking relationship with Johnston’s wife, Sharon. He recounted how the two joined the Queen and Prince Philip at Balmoral in August 2010, prior to Johnston’s swearing-in later that year.

One evening, they were returning to the castle from a barbecue at a renovated shepherd’s hut on the estate — just the four of them, the Queen driving with Johnston in one land rover, and Philip driving with Sharon in the other ahead of them on narrow, highland roads.

“We were coming home at about 10 p.m., as black as could be, he and Sharon were ahead, kind of weaving, and we could hear these gales of laughter coming out. They were cracking jokes at one another,” Johnston said.

“I had a vision of him going over the edge and down half a mile into the valley, and my first thought is: Do the Queen and I rustle down to rescue them?”

Chrétien said “it must be terrible” for the Queen to now find herself alone after a marriage that lasted for more than 70 years. He noted it’s been almost seven months to the day since he lost his wife, Aline.


“It’s a big change in life but she’s an extremely courageous person and she will face the situation with the strength that she has been able to show to the world for the almost 70 years she’s been queen,” Chrétien said.

With files from Alex Boutilier and Kieran Leavitt



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After warning, McConnell softens posture on corporations’ taking political stances



Senate Minority Leader Mitch McConnell, R-Ky., softened his stance on corporations’ getting involved in politics Wednesday, a day after he warned companies not to weigh in on hot button issues.

“I didn’t say that very artfully yesterday. They’re certainly entitled to be involved in politics. They are,” McConnell told reporters. “My principal complaint is they didn’t read the darn bill.

“They got intimidated into adopting an interpretation … given by the Georgia Democrats in order to help get their way,” he said.

McConnell was referring to a controversial voting law recently passed in Georgia, which came about in the aftermath of former President Donald Trump’s campaign of falsehoods about the election result in the state last fall.

The law led the CEOs of Delta and Coca-Cola — which are based in Atlanta — to condemn the measure. And last week, Major League Baseball pulled this year’s All-Star Game out of Atlanta in protest. The game will, instead, be played in Colorado.

In recent weeks, McConnell has excoriated corporate America for boycotting states over various GOP-led bills. He said Tuesday that it is “stupid” for corporations to take positions on divisive political issues but noted that his criticism did not extend to their donations.

“So my warning, if you will, to corporate America is to stay out of politics,” McConnell said in Louisville, Kentucky. “It’s not what you’re designed for. And don’t be intimidated by the left into taking up causes that put you right in the middle of one of America’s greatest political debates.”

Major League Baseball’s decision drew the most outrage from Republicans, as Trump called for a boycott of baseball and other companies that spoke out against the Georgia law. McConnell said Tuesday that the latest moves are “irritating one hell of a lot of Republican fans.”

McConnell, long a champion of big money in politics, however, noted Tuesday that corporations “have a right to participate in a political process” but said they should do so without alienating “an awful lot of people.”

“I’m not talking about political contributions,” he said. “I’m talking about taking a position on a highly incendiary issue like this and punishing a community or a state because you don’t like a particular law that passed. I just think it’s stupid.”

Source:- NBC News

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