US Foreign Policy and Oil - Essay Example

US FOREIGN POLICY AND OIL US Foreign Policy and Oil Introduction The United s foreign policy has always been reflective of its democratic principles. It has also encouraged open communication with other countries and the coordinated resolution of political and economic issues. For the most part, it has also supported the principles set forth by the United Nations (UN) in its foreign relations and accountability. This chapter shall now discuss the US foreign policy and oil. It shall also discuss unilateralism and the US foreign policy as well as the new world order. This chapter is being considered in an attempt to establish a clear picture of the US foreign policy and its processes in relation to world issues, most especially those related to oil. Discussion During the Civil War, oil use was seen in the United States (Committee of Foreign Relations, 1975). Being the largest user and producer of oil, it also supplied oil to the Allied Forces during the First World War. The use of oil in the US industries was prominent in the post-war era and this prompted the US to fear oil supply depletion. The US was also concerned about oil supply being largely controlled by foreign interests like British Petroleum and Royal Dutch Shell (Committee of Foreign Relations, 1975). Moreover, the US also feared British control of numerous oil fields outside the United States. “All the known oil fields, all the likely of probable fields outside of the United States itself are in British hands or under British management of control, or financed by British capital” (Terzakian, 2006, p. 72). This prompted the US to be more restrictive of its oil exports and to consider other sources of oil. After the First World War, the US Senate asked the President to report on the restrictions being imposed on Americans exploring oil in foreign nations (Committee of Foreign Relations, 1975). Reports on how Americans were excluded from the exploration of foreign oil fields were revealed by a State Department report. Those which were under British control were especially active in excluding American oil explorers. Congress was prompted to pass the Mineral Leasing Act of 1920 and this act set forth that oil and minerals outside the US can be explored by US nationals (Randall, 2005, p. 19). The Congress also implemented what is now known as the Principle of Reciprocity wherein oil and other minerals in the US lands could be used for exploitation by domestic foreign-owned corporations, but if the same privileges were not given to US nationals, these corporations would not be able to own stock or control stock in any lease acquired under the Mining Act (Committee of Foreign Relations, 1975). When the US found out that the Dutch government was planning to grant oil concession in the Djambi residency of the Netherlands East Indies to a Dutch company partly owned by Royal Dutch Shell, the US protested to the Netherlands (Committee of Foreign Relations, 1975). When the Dutch refused to reconsider, the US informed Netherlands that no foreign capital would be allowed to operate in the US unless similar privileges were granted to Americans in their lands (Committee of Foreign Relations, 1975). The Department of Interior then refused to allow Shell to explore oil on some public lands in Utah because the Netherlands discriminated against US businesses. Considering the fact that the US was the world’s largest oil user and producer, other countries were cautious about being cut off from the US as a source and user of oil (Committee of Foreign Relations, 1975). The reciprocity act was then considered by the Netherlands in the pre-Second World War era. The same agreement was then applied to later allow access to the major European nations which were controlling oil access in Iraq. After the Turkish government offered reciprocity rights to the US, concessions to a consortium of European interests were granted. Turkey’s alliance with Germany during the First World War was detrimental to both countries because the consortium in Iraq was taken by Britain (Arvanitopoulos, 2002, p. 5). European agreements and concessions were being made involving European nations and this brought protests from the State Department. The US was especially not comfortable with the extent of supremacy which Britain was gaining in the Middle East. The US responded to British actions by implementing an open door policy with the knowledge that the companies which are taking advantage of open door policies would be Americans. In effect, this policy allowed the State Department to be open to the development by nationals of all states, unrestricted by nationalistic policies and restrictions (Committee of Foreign Relations, 1975). The State Department’s actions helped support the American oil industry. Exxon first gained interest in Iraq after the First World War, and the State Department expressed that it would be able to support different American companies (Conant, 1979, p. 51). The American Petroleum Institute expressed its concern to the State Department about Americans being excluded from oil exploration in the Middle East. Initial oil explorations by the API on behalf of interested members were then commenced in Iraq. Exxon was later designated as the representative in negotiations with British Petroleum over American interests in Iraq. The State Department welcomed the negotiations with Exxon and BP. The new Red Line Agreement was a more favourable agreement for the US in terms of oil access in the Middle East – allowing access to oil in Bahrain (American Foreign Relations, n.d). More complications in the political processes became apparent throughout the years with regard to oil and oil exploration within and outside the US. As can be seen from the above discussion, the post World War I era saw the rise of Britain as primary power in the colonization of oil-rich nations. Their purposes in carrying out such activities have been largely couched in goals of stabilization and democratization of the conquered regions (Cangaliosi, 2006, p. 1). The US also picked up this pattern from Britain with its conquests of South America and Iraq. These conquests and political dominance have created a trend of wanting to seek oil interests in these conquered nations. The link therefore between terrorism and global dominance over resources has become apparent in the process of oil exploration. Oil has apparently given people “a false sense of security and power for industrialized nations, an antagonistic vice to sustainability in ecological and humanitarian efforts” (Cangaliosi, 2006, p. 1). In terms of war and the economy, oil is an important commodity; and getting the people to agree on the different beliefs in relation to this resource is a near impossible task. It has become a seemingly ideological source of warfare which has not produced favourable results for all parties involved. When rich deposits of oil were seen at the Gulf of Mexico, interest in striking a profitable agreement with Mexico was raised. The US and Mexico were able to agree on the protection of companies operating in Mexico. However, Venezuela oil production was still able to overwhelm the Mexican oil production. By the end of the Second World War, Venezuela became the third leading oil producer in the world (New American Nation, 2011). A labour dispute between the major oil companies in Mexico eventually resulted to both the US and British oil interests in Mexico being set aside in favour of Mexican interests. This move by the Mexican government provided a powerful statement against international oil companies and in favour of independent actions by developing nations (New American Nation, 2011). This prompted many oil companies to react against the nationalization of oil production. In response to the nationalization of the Iranian oil industry, the US set forth is opposition to economic nationalism; it was also prompted to express an activist role in stabilizing Western orientation of the Middle East and expressing public support for non-intervention in the oil operations (Saunders, 1996, p. 2). The Iranian oil crisis seen in the early 1950s was seen as a result of the nationalization of the Anglo-Iranian Oil Company (AOIC). This company was Britain’s most valuable overseas asset and Britain feared that nationalizing it would jeopardize Britain’s oil interests. The US urged Britain to settle its oil interests with Iran, however Britain refused; furthermore, it staged a boycott of Iranian oil (New American Nation, 2011). The US failed in its settlement attempts for Iran and Britain; it also failed to convince the shah of Iran to remove nationalist Prime Minister Mossadeq (Heiss, 2009, p. 179). The Britain-initiated boycott reduced Iran’s earnings significantly and also created a major disturbance in Iranian politics. In order to ensure that Mossadeq would not displace the shah, the US and Britain funded and directed a coup which displaced Mossadeq and installing a government which was more favourable to US and British interests (Heiss, 2009, p. 180). After the coup, Iranian oil found its place in the international markets. The US role in settling Iranian oil interests, as well as the inclusion of US oil companies in the Iranian consortium successfully installed the US as the primary Western power in the Middle East. Moreover, “the short-term success of the Iranian model of covert intervention influenced subsequent US actions in the Middle East, Latin America, and Asia (New American Nation, 2011). The US became a much more significant player in the global exchange and in oil interests with its influence in the Middle East and Asian region. During wars and periods of insecurity, oil prices and oil supply is often endangered. The US has placed much importance over the lack of security and the diversification of supplies which tend to deplete oil production and affect the politics in many countries of the world. The US has noted that it has become very much dependent on foreign imports and its so-called safe sources of oil are no longer safe (Walde, 2006, p. 2). From the post World War I to the post World War II era, the US was more or less self-sufficient in its oil supply; moreover, coal was more important to it at that time. At present, the US has become more preoccupied with furnishing its oil supplies. Hence, it has secured its position in the oil producing areas, including the US territories and the Middle East. However, the Middle East has become a highly volatile place and less amenable to US interests and dictates (Hagel, 2004, p. 3). Moreover, US support for Israel has made things difficult for US oil companies because of growing resentment on US presence and influence in the region. This has given rise to Islamic fundamentalism in the Middle East. Such views have made it even more difficult for the US to influence oil-producing nations (Walde, 2006, p. 1). There is a major issue in the US relationship with Saudi Arabia mostly because of the internal security in the country. With Russia taking a more aggressive approach in its role in supplying Europe and Asia for their oil needs; and with the Middle East expanding into the world’s dominant oil production and reserves area, the US dependence on foreign oil is considered at risk. The internal US energy policy has been insufficient in handling internal demand mostly because of the political complications arising from US consumers’ refusal to accept tax induced high oil prices (Transport Research Centre, 2008, p. 24). Much optimism is actually being pinned on technological innovations which can help improve energy savings and impose efficiency policy. However, at present, the thrust of the Obama Administration in terms of foreign policy and oil have not aggressively veered away from foreign oil dependence. The US remains to be dependent on foreign oil; consequently, the US is embroiled in the political issues which seem to follow oil use and production in the Middle East, Asia, and in other oil producing regions. Unilateralism and US Foreign Policy After the September 2001 attacks, coalitions with other nations became one of the most discussed policies. Moves towards international cooperation were then proposed by various interest groups; however this proposal was not welcomed by the US (Rubenfeld, 2004, p. 1971). International support for the US was expressed by various countries around the globe. There was also condemnation for the acts of the perpetrators. A more multilateral policy from the US was thus expected in the wake of the terrorist attacks. The US was however not obliging on this matter. It was still sticking to its unilateral policy. This policy was in sharp contrast to the then European policies which were mostly geared towards multilateralism (Rogers, 2002). Such unilateral approach was mostly built on policies pursued by the Republican majorities even before President Bush’s election. Much protest was actually seen with the Comprehensive Test Ban Treaty and to the UN proposals for an International Criminal Court (Rogers, 2002). This era of unilateralism was highly active during the Bush administration with no interest given to ratifying the Anti-Ballistic Missile Treaty and firm opposition on curtailing the weaponisation of space; moreover, their control of transfers of light arms was also non-committal to UN plans (Higgott, 2003). In furthering its unilateralist policy, the US also refused to ratify the Kyoto climate change protocols and it also opposed the protocol seeking to strengthen the Biological Weapons Convention of 1972. Much of Europe was frustrated with the US’ failure to share in these policies. Things did not seem to get better with disagreements seen in the talks with North Korea and the lack of interest in the growing Israeli-Palestinian peace process (Rogers, 2002). Many of the EU nations were lobbying for conflict prevention and were quick to negotiate peace with North Korea and the Middle East. EU members, such as Sweden, were expressing international social awareness and such awareness was impacting on EU policies. This awareness translated well to improved debt relief and international assistance. Such commitment exemplified the fact that the Kyoto protocols were insufficient to ensure international rescue and there was a need to make a stronger commitment towards arms control and towards strengthening bio-weapons treaty (Higgott, 2003). This unilateralist doctrine was seen as early as the Carter administration when powerful right wing groups advocated the re-arming of the US based on perceived Soviet threats. These groups went on to serve during the Reagan administration (Higgott, 2003). They saw a bipolar world with international communism being a threat to US interests. At the end of the 1990s, the Cold war ended and international communism became less of a threat to US interests. However, the Bush administration still saw a threat from the international community and expressed that these threats were ‘still there’ (Rogers, 2002). In considering the above discussion, such unilateralist policies have clearly dictated international responses to US call for cooperation and coordination. At present, the US is still considered ambivalent in this regard because there have been no outright moves on its part to portray a more multilateral approach to international agreements. US Foreign Policy and the New World Order Interest groups have commented that the US is no longer the dominant nation that it once was. In the current world order, there are now three equal centres of influence: Washington, Brussels, and Beijing (Khanna, 2008). The EU’s influence in the international world order has risen to levels almost matching that of the US. Second world nations have also apparently risen to power in the face of their growing influence and impact in the international community. The three centres of influence are now racing with each other in order to win favour with these second world nations. These transitional nations include India, China, Singapore and other Asian nations and those in the Central European region (Khanna, 2008). America’s impact has now become less evident most because the foreign aid budget is relatively small. In this regard, the US can still exert its military might but its ability to influence and reward allies are actually very limited. Some authors have pointed out the flaw for the US being stuck in the Cold War mindset. “While we pursue a ‘global war’ on terror, for example, the leaders of many other nations think we face a terrorist ‘challenge’ that calls for a carefully calibrated economic and diplomatic – as well as military – response” (Khanna, 2008). For which reason, the blame for America’s decline is being put on America itself – for its refusal to make more beneficial responses to aggressive issues. The US seems to also have lost its capability of using the power it has. China is making much progress with its economic progress; and the EU is impressing the world with its ability to gain the consensus of its members and applicants. And the US seems to be keener in fighting more wars, pushing for free trade, and in allowing mass migration; but not in seeking improved lives for its citizens (Khanna, 2008). Conclusion The US foreign policy in relation to oil has been complicated and largely politically-based. The political interplay has mostly focused on the interplay of power between the US and the Middle Eastern nations and other oil-producing nations. This interplay has assisted in the implementation of more tedious policies for the US and for the oil-producing nations. In effect, oil has been a source of conflict for the US and for these oil rich nations. In terms of international policies, the US has been considered a unilateral state as it has not actively taken part in the international conventions and treaties. It has also lost a certain amount of influence in relation to the international community as other countries and groups like the EU and China have managed to emerge as more influential economies and world powers. Works Cited Arvanitopoulos, C. (2002), The Geopolitics of Oil in Central Asia, Institute of International Relations, viewed 17 March 2011 from http://groups.uni-paderborn.de/kowag/geoeconomics/pdf/tgooica.pdf Committee on Foreign Relations (1975) Multinational Oil Corporations and U.S. Foreign Policy - REPORT together with individual views, United States Senate, Washington, US Government Printing Office Conant, M. (1979), Access to energy, 2000 and after, Kentucky: University of Kentucky Press Hagel, C. (2004), A Republican Foreign Policy, Foreign Affairs, viewed 17 March 2011 from http://academic.marion.ohio-state.edu/vsteffel/web597/Hagel_RepublicanFP.pdf Heiss, M. (2009), Real men don’t wear pajamas: Anglo-American cultural perceptions of Mohammad Mossadeq and the Iranian Oil Nationalization Dispute, Ohio State Press, viewed 17 March 2011 from http://www.ohiostatepress.org/books/complete%20pdfs/hahn%20empire/09.pdf Higgott, R. (2003), American unilateralism, foreign economic policy and the securitisation of globalization securitisation of globalization, University of Warwick, Centre for the Study of Globalisation and Regionalisation, Coventry, number 124, pp. 1-42 Khanna, P. (2008) New World Order: Why America is losing the race to influence the "second world,” Washington Post, viewed 17 March 2011 from http://www.washingtonpost.com/wp-dyn/content/story/2008/03/21/ST2008032102526.html Oil - The origins of US foreign oil policy (n.d) American Foreign Relations, viewed 17 March 2011 from http://www.americanforeignrelations.com/O-W/Oil-The-origins-of-u-s-foreign-oil-policy.html Randall, S. (2005), United States foreign oil policy since World War I: for profits and security Stephen J. Randall, London: McGill-Queens Press Rogers, P. (2002) If its good for America, its good for the world, Guardian.uk, viewed 17 March 2011 from http://www.guardian.co.uk/world/2002/jan/27/usa.georgebush Rubenfeld, J. (2004) Commentary: Unilateralism and Constitutionalism, 79 N.Y.U. L. Rev. 1971 (2004) Saunders, B. (1996) The United States and Arab nationalism: the Syrian case, 1953-1960, New Jersey: Greenwood Publishing Group Tertzakian, P. (2006), A thousand barrels a second: the coming oil break point and the challenges facing an energy dependent world, USA: McGraw Hill Professional Transport Research Centre (2008) Oil dependence: is transport running out of affordable fuel? New York: OECD Publishing Walde, T. (2006) Reviewing Steve Randall, Journal of Military and Strategic Studies, volume 9(1), pp. 1-9 Read More