An economist says that U.S. policy in the Middle East is driven by baseless fears that an “oil weapon” can cut off our fuel supply.

Roger J. Stern argues that the decades-old belief that petroleum-rich Persian Gulf nations must be appeased to keep oil flowing is imaginary and the threat of deployment of an “oil weapon” is bogus. He contends that untapped oil supplies are abundant, not scarce.

The real security problem, according to Stern, comes from market power. Persian Gulf oil producers collude to command artificially high prices that could never exist in a competitive market, producing excessive OPEC profits.

Stern says, “U.S. appeasement of the oil market power not only helps create these problems, it makes them inevitable. Why do we follow this schizophrenic policy? We do it because we believe the ‘oil weapon’ might be used to reduce our supply if we somehow offend the OPEC countries. My research shows the oil weapon is completely implausible.”

Recent history shows that attempts to use an oil weapon have consistently failed. The idea, Stern says, dates back to the mid-1930s, when the League of Nations considered cutting off oil to Italy as punishment for its aggression in Ethiopia. The league realized the oil weapon couldn’t work, however, because non-league nations could continue to supply Italy. Keeping oil out of Italy would have required a blockade, an idea dismissed as impossible to enforce. What was true for Italy then is true for the United States today.By the 1950s, the low price of Persian Gulf oil imports jeopardized the profits of smaller U.S. oil producers, especially in Texas.

In the early 1970s, fuel shortages and economic disaster were predicted for the US if we did not honor the wish of many Middle East oil producers that Israel’s borders be redrawn. The United States refused to go along with this, and in 1973 Persian Gulf states vowed to cut supplies to the United States if Israel did not return to its 1967 borders. But because the United States could obtain fuel from elsewhere, and because the Persian Gulf nations were utterly dependent on oil revenue, their “attack” was quickly abandoned.

Stern doesn’t think we will face an oil shortage anytime soon. His research shows that since 1970 the cost of extracting oil in Saudi Arabia has dropped by more than one-half, a clear sign of abundance. He says Persian Gulf oil prices are being kept artificially high in order to generate high profits.

Stern says that U.S. leaders must stop allowing fear of an oil shortage to dictate foreign policy and must find ways to reduce our fuel use instead. “It’s like we’re holding a gun to our own heads: Our belief in the oil weapon constrains our concept of what we can and cannot do in the Middle East and in our own economy,” he says. “It also blinds us to the huge opportunity to make ourselves more secure by reducing our oil consumption.”

Art credit:

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