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2 THE GULF'S BLACK
TREASURE Oil rulers toy with
Armageddon By Hossein Askari
This is the 24th and concluding
article in a special series on oil and the Persian
Gulf. For previous articles, please see the foot of
page two.
The Persian Gulf has every
ingredient imaginable for stoking conflicts,
revolutions and wars for all eternity. Just recall
the long, though still highly partial, list of
conflicts that are the region's inheritance (see
Conflict
without end, Asia Times Online, October 19,
2012). And don't forget that hardly any of these
conflicts are ever reconciled, with the result
that about eight out of 10 conflicts are
resurrected.
Why is the Persian Gulf so
cursed? Although it is the birthplace of Islam, a
religion that preaches peace, justice and the
unity of
humankind, the Persian
Gulf has sectarian, tribal and ethnic divides and
conflicts that appear timeless and likely to
linger until the end of time.
But to our
mind what stand out in the region as the fuels for
conflicts to come, including Armageddon, are the
vast oil and gas wealth under the ground, its
highly skewed regional distribution (per capita)
and the unimaginable human greed within the region
and from much farther afield.
How will the
future unfold in the region?Let's start out by
stating a number of considerations that we take as
almost facts. To begin with, we believe that the
Iranian and Saudi regimes will not entertain any
talk of pluralism, democratic reform and elected
and accountable governments.
The mullahs
in Tehran have shown their resolve in the
aftermath of their presidential election of 2009.
Their brutal crackdowns are etched in the minds of
millions in Iran and around the world. More
recently, their unashamed support for the criminal
actions of their ally Bashar al-Assad in Syria
further confirms the fact that they will do
anything to stay in power, even if it means
complicity with those that commit crimes against
humanity.
The mullahs will not accept any
significant change in the constitution that erodes
the power of the supreme leader, the leader that
they put on the perch without popular
participation. For legitimacy, the mullahs point
to a constitution adopted in the heat of a
revolution (with little time for reflection and
ability for revision) and Islam. And they have
even discarded this constitution and have ruled in
ways that contradict basic Islamic teachings.
In contrast, the regime in Riyadh, while
even more repressive than the regime in Tehran,
co-opts most dissidents with money and
indoctrination, not by force - but not when it
comes to dealing with their 10-15% Shia
population.
The al-Sauds will do whatever
is necessary to limit Shia resurgence anywhere and
everywhere, especially in the kingdom and in the
rest of the Gulf Cooperation Council (GCC - that
is, Bahrain, Kuwait, Oman, Qatar and the United
Arab Emirates).
In the end, no matter
Qatar's protestations, the rest of the GCC will
tow the Saudi line in controlling domestic
dissent. These family rulers - the al-Sauds in
Saudi Arabia, the al-Sabbahs (Kuwait), the
al-Thanis (Qatar), the al-Nahyans (Abu Dhabi) and
the al-Maktoums (Dubai) in the UAE, the
al-Khalifas (Bahrain), and the al-Saids (Oman) -
will not support peaceful transition to
constitutional monarchies.
Although the
al-Sabbahs (and possibly others) may be disposed
to such a transition, the al-Sauds will not
tolerate such a change on their doorstep as they
see it as an existential threat to the survival of
their own absolute rule. Similarly, the al-Sauds
will not tolerate any concessions to the Shia
majority in Bahrain as it might encourage Shia in
Saudi Arabia to fight for their rights.
In
support of their goals and policies, the al-Sauds
will push for a "stronger" union of the GCC with
them at the helm and with financial largesse for
the financially less fortunate members of the GCC.
The rest of the GCC, with the possible exception
of Qatar, will tow the Saudi line and try their
best to stay out of the limelight and not be
involved in conflict.
In Iraq, the Shia
community is destined to rule but conflicts over
the division of oil revenues with Kurds and Arab
Sunnis will translate to a siege mentality with
discrimination and conflict for the foreseeable
future. Reconciliation will be difficult after so
many years of brutal Ba'athist rule. However,
without reconciliation, internal insurgency will
continue for the foreseeable future and keep the
regime preoccupied.
Turning to the role of
the United States, it is safe to say that it has
learned nothing from the overthrow of the Shah in
Iran or from the more recent overthrow of
dictators in the Arab Spring. The US, no matter
what it professes, will continue to look the other
way in support of its favorite dictators until the
bitter end in the name of "stability" and the
"free flow of oil".
It will not stray from
this policy as long as dictators buy US arms,
import other goods and services from the US,
finance US government debt, maintain significant
deposits in the US and award contracts to US
public relations firms and influential lobbyists.
It continues to sell arms to Saudi Arabia
even though Saudi Arabia pushes for, and supports,
the al-Khalifas' brutal tactics (in our view
constituting crimes against humanity) to suppress
the peaceful demonstrations of its Shia citizens
who make up more than 65% of its population.
Even worse, the US has sold arms to
Bahrain to crack down on dissent in the aftermath
of these events while simultaneously professing
democratic reforms and human rights for the
region. It is almost unbelievable that the US can
do all this with a straight face and believe that
the region does not see through such blatant
duplicity. And when it comes to Israel, the US
will blindly do as Israeli leaders ask, even
though it may turn out to be harmful for Israel,
for the US and for the region.
On this
basis and given our depiction of the region in
previous articles and the region's simmering
conflicts, where will we go from here over the
decades to come?
Let's look at the easy
item first - the global oil and gas market.
When it comes to the world oil and gas
market, we believe that the position of the
Persian Gulf region will go through a fundamental
transformation. First, we, unlike analysts, do not
see the region's global oil market importance
(market share) increasing significantly in the
coming years. We believe that:
Unconventional oil and oil from the Arctic and
very deep sea finds will make important
contributions to supply;
Oil demand will not grow as fast as most
expect because of the much slower global economic
growth that will be a part of the landscape for
years and more conservation, especially in the US
and in most emerging markets where the biggest
growth in demand has been expected;
The relative contribution of natural gas, even
in transportation, will continue to increase;
Shale gas will steadily become a major fuel
source worldwide; and renewable energy will make a
bigger contribution than most project, with solar
becoming increasingly competitive as the price of
solar panels continue to plunge.
As
important, we think that Saudi Arabia's
significance in the global oil market is today at
about its peak and it will start to decline as the
country's domestic oil consumption continues to
increase rapidly, its production capacity is at
its limit and the production of others in the
Persian Gulf increases.
Although Iraq will
continue to be besieged by insurgency and
instability, we believe that corrupt officials,
looking out for their own quick financial gains
after years of Ba'athist rule, will offer
increasingly attractive terms to international oil
companies and investors that will boost its
production capacity and enhance its proven
reserves well beyond the 200 billion barrel level
and approaching Saudi Arabia's level of reserves.
In Iran we expect a major boost to Iran's
natural gas output (and a significant increase in
oil output capacity), destined for domestic
consumption and export, especially to Europe and
Southwest Asia. Still, oil price shocks may become
even more pronounced because of increasingly
unpopular Persian Gulf governments, US support for
oppressive rulers and the resulting conflicts and
insurgencies.
Regionally, we believe that
the al-Sauds will entertain an enlarged GCC that
includes Jordan and Morocco. The al-Sauds, as we
have said above, will push for a more unified GCC
under their stewardship, with unified military,
intelligence services, foreign policy, religious
affairs (ie towards Shia Muslims), and currency
(single or common), with Saudi fiscal support for
Bahrain and Oman and with more financial
assistance from Abu Dhabi for the poorer members
of the UAE.
Simultaneously, Saudi Arabia
will step up its support of Iraqi Sunnis and
Lebanese Sunnis and Christians (in opposition to
Iranian backed Shia under the umbrella of
Hezbollah).
Iran and Iraq will have little
choice but to respond to what they would see and
brand as Saudi aggression, annexation and
expansionism.
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