Most Oil Producing Nations No Admirers of U.S.
American dependence on unstable, unfriendly regimes for petroleum could spur future oil wars
By Richard Walker
As soaring petroleum prices bring recession home to U.S. consumers, the fact that much of our oil comes from unstable parts of the globe means things can only get worse in the months and years ahead.
A stark example of how conflict impacts the oil market and the U.S. economy was the decline on Wall Street when oil recently jumped to $120 a barrel following an attack by rebels on two Shell pipelines in the Niger Delta. Exports from Nigeria dropped by 162,000 barrels a day
of light crude, the type most favored by U.S. refineries.
Nigeria is the fourth largest exporter of light crude and petroleum to the U.S., and each time rebels attack oil platforms, seize foreign workers or blow up pipelines, the international markets panic and prices increase. Conflict zones like Nigeria are now having a bigger impact on increasing oil prices because overall global demand has increased and the dollar is at an all-time low. Therefore, when oil output from Iraq, Nigeria or Sudan is shut off or reduced by terrorism or internal civil strife the price of oil soars.
When supplies from troubled countries like Nigeria, Iraq, Angola, Algeria or Colombia are interrupted, the U.S. is forced to seek other suppliers and inevitably pays higher prices that are passed on to the consumer.
National Geographic painted one of the starkest portraits of Nigeria in a commentary by Tom O’Neill:
Oil fouls everything in southern Nigeria. It spills from the pipelines, poisoning soil and water. It stains the hands of politicians and generals, who siphon off its profits. It taints the ambitions of the young, who will try anything to scoop up a share of the liquid riches—fire a gun, sabotage a pipeline, kidnap a foreigner. . . . Dense, garbage-heaped slums stretch for miles. Choking black smoke from an open-air slaughterhouse rolls over housetops. Streets are cratered with potholes and ruts. Vicious gangs roam school grounds. Peddlers and beggars rush up to vehicles stalled in gas lines. This is Port Harcourt, Nigeria’s oil hub, capital of Rivers state, smack-dab in the middle of oil reserves bigger than the United States’ and Mexico’s combined.
That description of Nigeria sitting atop massive reserves of oil and gas reserves and as a human garbage heap points to a volatile future in which heavily armed gangs like MEND— Movement for the Emancipation of the Niger Delta—continue to attack oil facilities in the delta in order to force out foreign companies. When the West looks at countries like Nigeria, there must be military planners envisaging a scenario when it may be necessary for the U.S. and its allies to send in troops to protect the oil supply as oil becomes more scarce.
It took the Bush administration a long time to recognize the growing role of China in Africa where some of the world’s largest gas and oil reserves are still waiting to be tapped. Beijing has demonstrated in its dealing with the Sudanese regime, which has overseen the genocide in Darfur, that it cares little about the nature of the regimes it does business with as long as they cater to China’s insatiable appetite for energy, wood and minerals.
On the world stage, the major oil suppliers are not necessarily countries the U.S. can rely on in the longer term, and some are hostile toward America. According to BP Global, the top ten oil reserves are in Saudi Arabia, Iran, Iraq, Kuwait, United Arab Emirates, Venezuela, Russia, Kazakhstan, Libya and Nigeria.
If Iraq, as now seems likely, becomes dominated by Shiites, who feel closer to their co-religionists in Iran than their American liberators, the Bush administration will effectively have created a major oil bloc that could in the future shut off supplies to the United States. Russia has begun to use its massive energy supplies in tandem with its foreign policy, a factor that could someday bring it into conflict with the United States.
Richard Walker is the nom de plume of a former mainstream news producer who now writes for AFP.
(Issue # 19, May 12, 2008)