With tankers ablaze in the Persian Gulf, and sanctions on Iran and Venezuela, what are the real issues with these two countries? Ostensibly, they are nuclear capability in Iran and lack of democracy in Venezuela. But as in other recent conflicts, petroleum issues lie below the surface.
The United States has imposed severe oil sanctions on Iran and Venezuela, a form of economic warfare. Both countries have been in Washington’s crosshairs for decades. Washington wants to shut down their petroleum exports completely – to bring about regime change.
Iran has immense oil and gas resources. It’s a regional power, a challenge to U.S. hegemony. The 2016 nuclear deal was meant to end sanctions on Iran. Last year, Washington pulled out of the deal and re-imposed oil sanctions. It threatens secondary sanctions on companies and banks worldwide if they trade or invest in Iran’s petroleum. The sanctions are unilateral, imposed by the U.S. – not the United Nations. Iran has drawn close to China and Russia in self-defence.
Iran has immense oil and gas resources. It’s a regional power, a challenge to U.S. hegemony…Venezuela has more proven oil than any country in the world. Because Venezuela has a national oil company, a lot of the benefits accrue to Venezuela, not to foreign oil companies.
In Venezuela, the surface story is about democracy deficits. But Venezuela has more proven oil than any country in the world. Because Venezuela has a national oil company, a lot of the benefits accrue to Venezuela, not to foreign oil companies. For two decades, Washington has sought regime change. Recent sanctions on Venezuela’s oil and banking sectors cripple its economy, making oil exports difficult.
U.S. National Security Adviser John Bolton asserted earlier this year, “It will make a great difference to the United States economically, if we could have American oil companies … produce the oil capabilities in Venezuela.” Venezuela turned to China and Russia for huge loans to help manage the situation.
Canada supports U.S. sanctions against Venezuela. Whether sanctions enhance democracy or human rights is highly questionable. For sure, sanctions have reduced Venezuela’s ability to export oil to U.S. refineries, enabling Albertan bitumen to fill the gap. Canada benefits when oil elsewhere is taken off the market and oil prices rise. Canadian officials overlook this reality in public comments.
Oil and regime change were unmentioned reasons for the Iraq and Libyan wars. Former U.S. president George W. Bush insisted the 2003 invasion of Iraq was not about oil. Yet two years before the invasion, the State Department began formulating a new oil policy that would open the sector to international companies. Speaking in 2007, retired U.S. general John Abizaid, former head of U.S. Central Command, said, “Of course it’s about oil. Oil fuels a lot of geopolitical moves.”
The NATO war on Libya was packaged and promoted under a “Responsibility to Protect” label. Again, oil and regime change were involved. Libya happens to have the world’s ninth-largest oil reserves, and its oil is top quality. In 2011, NATO flew 9,700 strike sorties led by a Canadian general. Libya’s infrastructure was devastated. Afterwards, Libya was fragmented, bankrupt, in crisis. Eight years later, its oil exports are sporadic and still a source of fighting among rival factions. Libya has become a staging ground for refugees to Europe. Libya is a failed state.
Since the 9/11 terrorist attacks, petroleum has been part of numerous interventions and clashes, though rarely identified as such. Iraq, Libya, Iran and Venezuela have vast petroleum resources. Afghanistan, Syria and Ukraine have strategic locations for rival pipelines. Somalia and Yemen border sea routes for petroleum. In my recent book, Oil and World Politics , I documented the surface stories and underlying petroleum stories.
All these countries are caught up in rivalries among the U.S., China and Russia. The U.S. sees itself as an exceptional country, entitled to control the seas and take action anywhere in the world. Secretary of State Mike Pompeo said recently, “When America leads, peace and prosperity almost certainly follow.” Some countries think otherwise.
Petroleum is, so far, the lifeblood of modern economies, the most important commodity in world trade, and a source of enormous wealth. Under the United Nations Charter, wars for resources are illegal. Perhaps that’s why petroleum is the rarely mentioned aspect of conflict stories. Its role in ongoing disputes deserves exposure.
John Foster is author of Oil and World Politics: The real story of today’s conflict zones (Lorimer, 2018) . He is an energy economist who has worked for 40 years in policy and economic issues relating to infrastructure and petroleum.
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