Challenged Hegemony

The United States, China, and Russia in the Persian Gulf

Steve A. Yetiv, Katerina Oskarsson

• Editorial: Stanford University Press
• Año: 2018
• ISBN:
  9781503604261
• Edición: 1
• Categoría: Politica e relazioni internazionali
• Categoría: Controllo degli armamenti

Few issues in international affairs and energy security animate thinkers more than the classic topic of hegemony, and the case of the Persian Gulf presents particularly fertile ground for considering this concept. Since the 1970s, the region has undergone tumultuous changes, with dramatic shifts in the diplomatic, military, and economic roles of the United States, China, and Russia. In this book, Steve A. Yetiv and Katerina Oskarsson offer a panoramic study of hegemony and foreign powers in the Persian Gulf, offering the most comprehensive, data-driven portrait to date of their evolving relations.

The authors argue that the United States has become hegemonic in the Persian Gulf, ultimately protecting oil security for the entire global economy. Through an analysis of official and unofficial diplomatic relations, trade statistics, military records, and more, they provide a detailed account of how U.S. hegemony and oil security have grown in tandem, as, simultaneously, China and Russia have increased their political and economic presence. The book sheds light on hegemony's complexities, and challenges and reveals how local variations in power will continue to shape the Persian Gulf in the future.

I

THE UNITED STATES IN THE PERSIAN GULF

2

The United States and the Global Oil Era

THE MIDDLE EAST has been an arena for great power rivalry for millennia, from the time of the vast empires that followed the first civilizations, through the great game of Euro-Russian rivalry in the nineteenth century, and into the Cold War of the twentieth century and the post–Cold War period. The most ancient rivalries began at least as early as 2500 B.C. in Mesopotamia, the purported cradle of civilization between the Tigris and Euphrates Rivers in modern-day Iraq. Thereafter, a broad array of empires rivaled each other for influence, including the Babylonians, Assyrians, the Hittites of Anatolia, and the Persians, whose vast empire under Cyrus the Great stretched across the Near East from Greece to the frontier of India, only to be eclipsed later by Alexander the Great and subsequently the Romans.¹

The goals of great powers have changed, as have the great powers themselves across eras from these ancient times to the fifteenth and sixteenth centuries, when the Europeans established themselves in the region, to the modern period of rivalry and cooperation among actors in a globalized world. But the Middle East has always enticed them for its coveted land, strategic position astride three continents, importance as a trade route, religious intrigue and centrality, and, in more recent times, its oil resources and concerns about transnational problems such as terrorism and weapons of mass destruction.

Modern actors at times have learned the high costs of seeking to secure energy. When one American official asserted in 1944, referring to the Persian Gulf, that the “oil in this region is the greatest single prize in all history,”² he could not have known what wars and travails awaited America, especially after it assumed responsibility from Britain in 1971 for the security of the Persian Gulf, a region that includes Iran, Iraq, Saudi Arabia, Kuwait, Oman, Kuwait, Bahrain, and the United Arab Emirates.

America has certainly benefited from the free flow of oil from the Middle East, but it would also be drawn slowly into the region by revolution, war, and regional rivalries, all set against the inherent instabilities of the region and the struggles for influence and standing among the global powers. The evolution of its position relative to the other great powers would prove critical to regional and global politics and to all countries that depend on the flow of oil at reasonable prices.

It is worthwhile sketching some key signposts in the American journey into the Persian Gulf all the way from the rise of the age of oil in the early twentieth century to the Iran nuclear accord of 2015, a journey that has been affected by, and has cross-cut, that of China and Russia. This evolution has been shaped in important ways by the concomitant rise in the importance of oil to the global economy. As the most politicized commodity in history, oil has been intricately interwoven into the domestic, regional, and international relations of the region.

The Age of Oil, Centered in the Middle East

By the advent of the twentieth century, the industrial revolution and the development of large standing armies had created enormous energy needs. To fill this potentially lucrative market, the United States and Russia started producing oil and by 1900 accounted for 90 percent of the world supply. American oil proved to be critical in World War I. Shortly before that war, the United States started to transform its coal-burning battle fleet into one that used oil for fuel, which created important military advantages, and during the war, it also supplied its allies with oil.³

From 1918 to 1999, America produced more oil, cumulatively, than any other country.⁴ That position would be overtaken by Saudi Arabia, but the United States would try to regain its position with its oil boom that took off in 2007–2008. The opening salvo of the oil era for the Gulf was in 1907 when a large petroleum field was discovered in Iran. By May 1933, the United States and Saudi Arabia made an agreement that would fashion their oil relations, and oil in general would help contribute to American power in the twentieth century.⁵

Founded in 1870 at the outset of the Gilded Age of great capitalist enterprises and excesses, Standard Oil Company of California struck a sixty-year contract allowing it exclusive rights to explore and produce oil from Saudi Arabia’s Eastern Hasa oil province.⁶ By 1938, ARAMCO—the Arabian American Oil Company—discovered oil in commercial quantities.⁷

Forged on common interests in oil, America and Saudi Arabia developed relations that privileged strategy and money over democracy, while painting their interaction in a brighter light than deserved.⁸ In subsequent decades, the Saudis slowly took control of the company from the Americans⁹ as a forerunner of one of the biggest changes in global oil in the past seventy-five years—and one that has had an enormous impact on oil security and the American role in the Middle East.

Prior to the oil crisis of 1973, the Seven Sisters—the biggest private oil companies such as Chevron—controlled around 85 percent of the world’s oil reserves.¹⁰ By contrast, data show that national oil companies control around 89 percent of the world’s reserves; national oil companies are more privatized hold around 7 percent; and private international oil companies (IOCs) control about 4 percent.¹¹ As one expert points out, in “virtually every oil-exporting country, NOCs, which had in the 1990s ceded ground to IOCs in the wake of globalization, have reclaimed lost ground.”¹²

NOCs expanded most rapidly during the period of decolonization in the 1950s, 1960s, and 1970s but also in more recent decades. For instance, Iran initially nationalized its oil assets in 1953, though Western powers reversed that move in Operation Ajax, launched by America and Britain, but by the 1970s, Iran and the other Persian Gulf countries had nationalized energy more effectively.

Saudi Arabia and Kuwait nationalized their oil assets in the 1970s, keeping upstream production mostly closed to foreign investment thereafter while opening downstream production (refining mainly) to outside parties. Chevron, then the Standard Oil Company of California, had discovered oil in Saudi Arabia in 1938 and created the basis for ARAMCO, a predecessor of today’s Saudi Aramco. The Saudis took full control of ARAMCO’s assets in 1976, which launched a period in which the private companies would be contractors with production-sharing contracts rather than concessionaries and actual owners.¹³

The early 1970s saw further nationalization of oil assets by Middle Eastern producers, and by the mid-1970s, resource nationalism had spread throughout the developing world. Producers in the Persian Gulf assumed complete control over their oil industries, revoking any remaining concessions they had with the Western private oil companies.

Today, of the twenty major oil-producing companies worldwide, fourteen are NOCs, and their states also control the majority of global oil fields large enough to warrant investment from a supermajor or one of the world’s biggest private oil companies. Moreover, it is well recognized that the global oil sector will need massive investment to meet rising demand. Most of this oil will come from members of the Organization of Petroleum Exporting Countries (OPEC), and they most likely will be critical in determining the path of the oil market. NOCs will be key drivers, despite the North American energy boom, which will probably reach peak production between 2020 and 2025.¹⁴ In brief, then, the trend in control over oil resources has completely reversed since 1972, with Saudi and Iran dominant and the major private companies by and large sharing small percentages of control. This shift is vital to an understanding of global oil and security dynamics and the many issues that they affect. Such dynamics will make the international relations of the Persian Gulf even more important in the future.

Unlike the European powers, America was not directly involved in the great power rivalries of the nineteenth century that crisscrossed the Middle East and instead was caught in nation building, civil war, and reconstruction. While continental America was forged on the anvil of aggressive expansion, that policy did not extend over to the Middle East. America scarcely even intervened near the region with the exception of the Barbary wars from 1801 to 1804, which in any case were aimed at checking piracy against American shipping in the Mediterranean.

By contrast, imperial Britain was interested in the Middle East because of its rivalry with France, Russia, and Germany, especially after the rise of the ambitious but mercurial Wilhelm II in 1890. European interest in the region became increasingly more strategy oriented as the nineteenth century wore on. Under the nineteenth-century classic European balance-of-power system established at the Congress of Vienna in 1815, major European states endeavored consciously and purposefully to maintain a balance of power in Europe, but did not proscribe intense competition for domination of other regions.¹⁵

For its part, Britain and Russia transformed the Gulf into a playground for their so-called great game. In order to protect its crucial lifeline to India, Britain also needed unchallenged supremacy in the Gulf. This explains its dogged efforts to thwart Napoleon, undermine Russia’s southward advance in search of warm water ports and improved strategic position, and sabotage Germany’s provocative Berlin-Baghdad railroad plan.¹⁶ While Britain and Russia were frittering away their energies in the great game, the United States, many thousands of miles away, was continuing the process of becoming one of the strongest countries in the world, a development that leading American thinkers and politicians understood and appreciated.

The Gulf became an important strategic foothold against Wilhemine Germany. The allies viewed Iran in particular as a vital conduit for sending arms to Russia during World War I, and both the Suez Canal and the petroleum fields of Persia were perceived as critical to allied interests. Defeating the Ottoman Empire, which had allied with Germany, meant penetrating the Middle East, which was under the influence of the far-flung Ottoman Empire, despite the advent of its demise in the nineteenth century.

During World War II, the Persian Gulf became more important to the United States as a result of the increasing military demand for oil and the region’s strategic location.¹⁷ Middle East oil was vital to the entire Allied war effort. Unlike World War I, armies required far greater mobility, and that resulted in one hundred times the use of gasoline.¹⁸ Oil proved crucial to mechanized warfare on a global scale. Had the Nazis successfully invaded the Gulf area, their control of the oil fields could have shifted the course of the war.¹⁹

As an oil glut lasting almost two decades approached its end in fall 1941, Secretary of the Interior Harold Ickes advised President Franklin Roosevelt that America must secure additional oil resources to ensure near-term supply.²⁰ Although this was largely a false alarm of a peak oil problem, it illustrated how important oil had become to American national security. In roughly the same period, the Soviets had occupied Iranian Azerbaijan in 1941 in the effort against Nazi Germany, only to withdraw belatedly in 1946. Later, during the Cold War, perceptions of ongoing Soviet interest in the warm waters of the Gulf triggered Western states to secure the Gulf from their erstwhile wartime ally while also jockeying among themselves for primary political and economic influence.

While the United States was in a presidential year that would bring John F. Kennedy to power, the rise of OPEC was in the wings and would become one of the most significant developments of the twentieth century in global energy. OPEC was founded in 1960 by Saudi Arabia, Kuwait, Iran, Iraq, and Venezuela, with subsequent expansion that added Algeria, Ecuador, Gabon, Indonesia, Libya, Nigeria, Qatar, and the United Arab Emirates. OPEC market power slowly developed in the 1960s, but it was not until the 1970s that the Arab states in ...