Okay, so what do I mean by "the Oil War"? Well, before we start, here are a few more links:
Now that you're caught up on the chatter, let's work together to try to figure out what's going on.
From where I sit, there are potentially about five parties in this situation: Saudi Arabia, Iran, Russia, the United States, and the amalgamation of all of the other OPEC members that aren't Saudi Arabia or Iran.
So, let's start with a history lesson about relations between Saudi Arabia and Iran.
In that post from last year, I linked to a story that discussed the ongoing Saudi-Iranian cold war. Elsewhere, I've written extensively about the Dhofar Rebellion, an obscure counterinsurgency campaign that took place in Oman in the 1970's. A few years after major combat operations in that conflict ended, the Shah was ousted in the 1979 Iranian Revolution. The Iranian Revolution drove the 1981 establishment of the Gulf Cooperation Council, an alliance of the six Gulf monarchies which has served as a direct counterweight to Iran. Some of the international tensions that played into the Dhofar Rebellion eventually contributed to the conduct of the Iran-Iraq War. From my continuing research about the Dhofar Rebellion, here are two passages discussing Saudi and Iranian involvement. The first selection is from page 60 of Oman: The Present in the Context of a Fractured Past by Roby C. Barrett, at Fort MacDill's Joint Special Operations University:
The Iranian presence also created a beneficial byproduct. The presence of Iranian/Persian Shi’a troops and air units in Oman alarmed Riyadh. Now, the Saudis also began to provide equipment and financial, and perhaps most importantly, diplomatic support to the Sultanate. Riyadh worked to induce Aden to stop supporting the rebels. The Iranian presence in Oman alarmed the Saudis as much or more than that of the leftists in South Yemen. From 1972 to 1979, the Saudis tried to convince Sultan Qaboos to remove the Shah’s troops. The last Iranian soldiers did not leave Oman until after the 1979 revolution.The second selection is from page 103 of Determinants of Iranian Foreign Policy: The Impact of Systemic, Domestic and Ideologic Factors by James Kruse, from the Naval Postgraduate School:
Iran also exerted its influence in the early 1970 when it joined Saudi Arabia, Kuwait Jordan and Great Britain in supporting the government of Oman against the Soviet backed rebels in the Dhofari rebellion. While Oman was strategically important to Iran, located at the Straights of Hormuz, support for the Monarch also served as an opportunity to confront Iran's persistent opponent, Iraq, which was supporting the rebels.Just to be clear, "the early 1970" and "Straights of Hormuz" are direct quotes, not mistakes on my part. Regardless, these passages demonstrate the situation: even before the 1979 Islamic Revolution, Saudi Arabia and Iran were strategic rivals in the region. Before 1979, Iran and Iraq were "persistent opponents"; after 1979, the new regime in Iran became more aggressive against that persistent opponent, the latter of which initiated the Iran-Iraq War in September of 1980.
It's important to remember the context of the time, because it's so easy to forget some of the significant changes in the last thirty or forty years. Sectarian and ethnic differences have always been a significant factor in Iran's relationship with the Arab world, but to some degree, that 1970's conflict between Iran and Iraq stemmed from the nations the two were aligned with. Iraq was a Baathist state: a secular, albeit Sunni-leaning, socialist state aligned to the Soviet Union. By contrast, Iran was a secular, albeit Shiite-leaning, monarchy aligned to the West, and particularly the United States and the United Kingdom. Their conflict with each other and their alignments with the respective superpowers influenced their involvement in the region: Iraq joined the Soviets in assisting the Dhofari rebels, which made it easy for the Shah of Iran to justify Iranian assistance to Oman in fighting them.
In his 2007 paper for the United States Marine Corps School of Advanced Warfighting entitled Working “Through, With, and By” Non-US Actors to Achieve Operational-Level Security Objectives, Travis Homiak notes (and don't skip the footnotes, which add some clarification):
The Iranian role in the Dhofar Rebellion in Oman (1962-1975) is an excellent example of the US working “by” another actor. Beginning in 1959 and continuing into the late-1970s, the US worked “through” Iran in an effort to contain the Soviet Union.[14] During this period, America provided the Pahlavi monarchy with significant military assistance against external, notably communist, threats.[15] In 1973, Iran used its increased military capacity—without American prompting—to intervene in the Sultan of Oman’s ongoing counterinsurgency campaign against the communist People’s Front for the Liberation of Oman (PFLO). “Iran’s military and economic support made an indispensable contribution toward turning the tide in Oman.”[16] This case demonstrates working “by,” because the Shah of Iran independently took action against a mutual problem. In fact, America’s previous efforts to build Iranian capacity to counteract regional Soviet influence—activities conducted under a “through” relationship—enabled a subsequent “by” relationship in which Iran achieved US objectives, while pursuing its own interests.Referring back to that earlier paper from James Kruse, we also learn:
[14] Cottrell, Alvin J.; Iran’s Armed Forces under the Pahlavi Dynasty: In Iran Under the Pahlavis; Stanford, CA; Stanford University, Hoover Institution Press; 1978; pp. 398, 401; It is also worthwhile to point out that America’s decision to work indirectly “through” Iran can be traced directly to the Nixon Doctrine—itself an indirect strategy, albeit at the strategic-level. Jeffrey Kimball, author of “The Nixon Doctrine: A Saga of Misunderstanding,” identifies the doctrine’s key tenet as America’s reliance on its allies to shoulder the primary burden of defending themselves against Communist encroachment, while America limited its involvement to providing military and economic assistance as well as advice.
[15] Cottrell, Alvin J.; Iran’s Armed Forces under the Pahlavi Dynasty: In Iran Under the Pahlavis; Stanford, CA; Stanford University, Hoover Institution Press; 1978; 418-415
[16] Cottrell, Alvin J.; Iran’s Armed Forces under the Pahlavi Dynasty: In Iran Under the Pahlavis; Stanford, CA; Stanford University, Hoover Institution Press; 1978; 407-408; Iran intervened in the Dhofar Rebellion in 1973 at the request of Sultan Qaboos of Oman. According to Calvin H. Allen Jr’s Oman Under Qaboos: From Coup to Constitution 1970-1996, direct Iranian military involvement in Dhofar lasted until 1979. At the height of their involvement the Iranian commitment numbered anywhere from 1,500 to 2,000 men with rotary, fixed-wing, and naval support.
Iran had pursued relations with the Soviet Union in part to obtain greater leverage with its American allies. By the middle of the 1970s, Iran had achieved all of the goals of its independent national policy: it was actively participating as the region's policeman in accordance with the Nixon doctrine, it had a free hand in purchasing whatever western arms it desired and it was pursuing rapid industrialization and modernization due to the meteoric rise in oil revenues. The loosening of tensions in the international system gave Iran the freedom to conduct trade and development projects with the Soviets, while at the same time acting in the interests of American in the Persian Gulf.So, before 1979, Saudi Arabia and Iran were strategic rivals, though not outright enemies; Saudi Arabia and Iraq were strategic rivals, though not outright enemies; and Iran and Iraq were strategic opponents. After 1979, Saudi Arabia and Iran were increasingly hostile to one another, via proxies and other indirect means; and Saudi Arabia and Iraq remained strategic rivals, though the course of events in the 1980's would force them into a de facto partnership with one another.
The Tanker War involved both Iranian and Iraqi attacks on one another's shipping, as well as Iraqi cooperation with its GCC neighbors to raise much needed oil revenue in order to finance Iraq's struggling war effort. In a nutshell, Iraq circumvented an Iranian naval blockade by coordinating with the GCC states to ship its oil via Kuwaiti ports. Iran then harassed Kuwaiti shipping, and later shipping from other Gulf states, leading to Operation Earnest Will in which the United States re-flagged numerous ships as American and escorted them into and out of the Gulf, skirmishing with Iranian forces in the process. Following the Iranian attack on the U.S.-flagged Kuwaiti tanker Sea Isle City in 1987, the United States launched Operation Nimble Archer in which several Iranian oil platforms were attacked in retaliation. In addition to employing speed boats and other irregular tactics, the Iranians aggressively mined shipping lanes, resulting in damage to both merchant shipping and, eventually, a 1988 mine strike against USS Samuel B. Roberts. That mine attack led the United States to carry out Operation Praying Mantis, which involved air and special operations strikes against Iranian oil platforms and warships.
The Hussein regime's objective in the Tanker War - and the objective of Saudi Arabia and the other Gulf monarchies in assisting Iraq - was to undermine the Iranian economy, thus undermining Iran's economic capacity to continue the land war. As that CSIS piece notes:
The tanker war was the most important aspect of the fighting at sea, but it never produced a major interruption in Iran's oil exports. Both for political and military reasons, Iraq never achieved the concentration of force necessary to severely reduce Iran's exports on a sustained basis, and lacked the targeting assets and the ability to use sufficiently lethal weapons to achieve decisive results.The rest is history that's mostly been forgotten. Iraq had sustained significant damage in the war, and had borrowed money from the Gulf monarchies to finance what was for them a proxy engagement against Iran. In 1990, with its economy faltering, and following allegations that Kuwait (itself a former component of the Ottoman, later to become the Iraqi, Wilayet of Basra) was slant-drilling into oil fields on the Iraqi-Kuwaiti border, the Hussein regime annexed Kuwait. Several months later, the Persian Gulf War led to the eviction of Iraqi forces from Kuwait, severely degrading Iraq's military capabilities in the process, and cemented Saddam Hussein's status as an international pariah. The issue continued to smolder, but any hope that Hussein had of rebuilding Iraq to its former strength evaporated in 2001 when the 9/11 attacks focused attention back on to the Hussein regime for a variety of reasons which remain controversial to this day. Meanwhile, Iran has largely confined itself to covert and proxy operations since 1988. Its cold war with Saudi Arabia, significant campaigns of which include the Tanker War and both nations' sponsorship of opposing groups in Iraq and Syria, continues.
So, that may seem like a lot of background, and it is, but stick with me, because it will come around soon.
The other element of the Tanker War that's less obvious is what was happening on the wider, global geopolitical stage. By the 1980's, while Iran and Iraq were at war, three other things were happening. The first is that in late 1979, shortly after the Islamic Revolution, the Soviet Union invaded Afghanistan. In 1980, the disastrous domestic and foreign policies of the Carter Administration led to President Carter's defeat by Ronald Reagan, who was openly anti-communist and fiercely dedicated to the eventual demise of the Soviet Union. Third, by the mid-1980's, with Russian industry lagging further and further behind that of its Western competitors, political weaknesses in the Soviet system were beginning to appear. In the early- to mid-1980's, there were growing expectations in the West that these and other factors might force the Soviet Union to moderate its foreign policy and domestic policies; the extent of Soviet weakness was underestimated by most analysts until weeks or even days before its collapse in late 1991.
The Soviet - now Russian - economy leans very heavily on its energy exports, which have occasionally given a disproportionate boost to its finances, as well as serving as an important tool of economic leverage that Moscow uses to influence friend and foe alike. In the 1980's, the Reagan Administration used a multi-pronged strategy to undermine the Soviet Union. While all of these prongs acted in concert, three were intimately interrelated:
1) The Reagan Administration used its influence abroad to boost global oil production, undercutting the very oil revenues that the Soviet Union needed to survive.
2) The Reagan Administration initiated a number of defense programs, most notably the Strategic Defense Initiative, that the Soviet Union was obligated to try to emulate, but for which it had neither the finances nor the technical expertise.
3) To a lesser degree, the Reagan Administration's sponsorship of elements of the Afghan Mujahideen was meant to undercut Soviet military strength while simultaneously straining Soviet finances.
So, interfering with one another's ability to export oil was a tactic employed with minimal success by Iran and Iraq in their war against one another, and boosting oil output to decrease its price was employed with (eventually) devastating success by the Reagan Administration against the Soviet Union. In both cases, this played into cold/proxy wars between Saudi Arabia and Iran on the one hand, and the United States and the Soviet Union on the other.
So, now let's look at today's situation.
Vladimir Putin's Russia has taken its most adversarial posture against its Western rivals since the 1991 collapse of the Soviet Union. In recent years, the Russian Federation has resumed deterrent bomber patrols and other provocative military operations; provided military and potentially/allegedly WMD assistance to rogue states such as Iran and Syria; violated or vacated treaties such as the Budapest Memorandum, Conventional Forces in Europe treaty, Intermediate Nuclear Forces treaty, and its participation in the Cooperative Threat Reduction Program; and invaded Western-allied states in Russia's sphere of influence (Georgia in 2008 and Ukraine in 2014). While an objective strategist will acknowledge that such moves may be consistent with Russia's strategic interests, the same objective strategist will acknowledge that these moves run contrary to the interests of America and its worldwide allies, and that many of them are questionable or outright illegal under international law or treaty obligations.
And meanwhile, there's Iran. Iran is no less adversarial now than it has been for the last thirty-some-odd years, though America, its allies, and Iran do appear to be experiencing a rare confluence of interests in the ISIS/DAESH crisis in Iraq and Syria (Iran's contribution to the rise of ISIS/DAESH notwithstanding... ). Regardless, the Iranian regime remains defiant and evasive about its controversial nuclear program, which many experts on nuclear technology and weapons of mass destruction agree to be unequivocally military-focused despite Iranian claims to the contrary. In late 2013, the Obama Administration hailed a supposed tentative deal in the ongoing nuclear negotiations, which really wasn't: in exchange for a rather significant (albeit temporary) relaxation of the ongoing sanctions, the Iranians agreed to a handful of comparatively minor (and also temporary) curbs on its nuclear activities, with both sides agreeing to continue the negotiations in lieu of a deadline that was about to be reached. Save for the recent agreement to resume talks in 2015, the recent round of talks have resulted in no new Iranian concessions. Meanwhile, Iran, its allies (notably Syria), and its tentative partners (notably Iraq) are under pressure from ISIS/DAESH and, in Syria's case, other insurgent groups; and its economy remains stagnant.
As for the Saudis and their allies, they remain extremely nervous about Iranian nuclear ambitions, particularly in light of the deterrent insulation it would provide to future Iranian covert and proxy operations in the region. (Again, Iran's role in the rise of ISIS/DAESH isn't lost on the Saudis or their regional partners.) As part of their Wikileaks coverage, The Guardian reported in late 2010 that Saudi Arabia had urged the United States to attack Iran's nuclear facilities. In February of 2013, the Center for a New American Security released a study entitled Atomic Kingdom: If Iran Builds the Bomb, Will Saudi Arabia Be Next?, in which the authors argued that it was unlikely that the Saudis would seek to purchase or develop their own nuclear weapons; as far as I'm concerned, the data they cited makes exactly the opposite case. Later in 2013, the BBC Newsnight program reported that Saudi Arabia has nuclear weapons "on order" from Pakistan, whose nuclear program may have been funded by Riyadh. There have even been various reports (Haaretz, The Daily Telegraph) - I think I began hearing rumblings as long ago as 2007 - that the Saudis and the Israelis have come to an understanding about cooperating with one another against Iran.
So the Saudis, the Americans, and their collective partners have a variety of concerns with Iran and Russia. Russia and Iran work in concert with one another, and the economies of both nations are extremely sensitive to the global price of oil because neither have been able to mitigate such risks through market diversification. With limited direct diplomatic leverage against either, the Saudis have had every interest in pressuring their OPEC partners to keep production high in order to prevent prices from rising. I don't expect the Saudis to state it outright - unlike many Western nations, the Saudis have shown themselves to be much better at playing their proverbial cards close to their chest, and at carefully using information as an implement of manipulation. There's also the inconvenient matter of ISIS/DAESH financing their operations in Iraq and Syria with black market oil sales - keeping prices low undermines their revenue stream as well.
So, we've discussed Saudi Arabia, Iran, Russia, and the United States. Earlier in this post, I talked about a fifth player: the other collective members of OPEC that aren't Saudi Arabia and Iran. Most OPEC members' economies are every bit as singularly fixated upon oil as are those of Iran and Russia. These other nations are also feeling the pain of low prices, but contrary to Iran or Russia, and owing in no small part to the added pain of sanctions on Iran and Russia, these other nations are better poised - within reason - to tolerate an added degree of financial risk. Even so, the collapse in oil prices is causing anxiety among those other OPEC members - particularly Venezuela, whose welfare state reportedly relies upon a $120-per-barrel oil price. This week, the Arab Times (of Kuwait) featured two articles of note: ‘Oil prices drop to affect projects’, and More than $150 billion worth of oil projects face the axe in 2015. The Saudis have been able to use their leverage within the organization (and the additional wrinkle of ISIS/DAESH), and to capitalize upon other Arab OPEC members' anxiety over Iranian adventurism, to keep oil prices low.
So, is it working? Well, Russia is feeling the pain, and President Putin's popularity among his constituency appears to be slipping, albeit slightly. Negotiations between Iran and the P5+1 states continue, and although there's plenty of cause for pessimism about prospects for a substantive deal, the fact that the negotiations continue at all may be cause for optimism.
There's also the question of attribution. The Saudis are certainly involved. Some news sources seem to be labeling the situation "Obama's Oil War on Russia". I'm personally skeptical as to whether the Obama Administration is involved in orchestrating the whole thing. In both word and deed, the Obama Administration has consistently maintained a "green" agenda, to include allowing high energy prices to encourage innovation and discourage fossil fuel consumption. The Obama Administration also has a fairly consistent record of taking credit for any development that might afford it political capital, and doing so immediately - for example, immediately announcing the death of Osama bin Laden, when strategic prudence might have delayed such action pending the exploitation of the trove of intelligence collected by the raiders. That said, the Obama Administration has also kept quiet about alleged American involvement in Stuxnet - another covert effort aimed at Iran's nuclear program. The Obama Administration's silence - again, if it's involved - may also be a confluence of the two imperatives: on the one hand, consistent with President Obama's ideological convictions against nuclear proliferation; and on the other, the political imperative of safeguarding the domestic political support of American environmentalists.
As for whether the whole endeavour will be as strategically ineffective as the Tanker War, or as strategically devastating as President Reagan's plan to collapse the Soviet oil revenues, only time will tell.
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