There is nothing like a sudden decline in available oil supplies to bring out forgiveness in what is dubbed in and around Washington, D.C. as "The Blob." This term refers to an amorphous, but powerful group of think-alike U.S. foreign policy actors both inside and outside of government who have influenced every U.S. administration since the end of World War II. The main tenet of The Blob is that America knows best how to lead the world and it must do so.
The Blob seriously penalizes those whom it regards as a threat to American power and security. The Blob likes to use words such as "rogue" and "pariah" to describe those countries which get on its wrong side. (Many are admittedly run by truly odious regimes.) To get a sense of who has violated The Blob's sensibilities, one needs only to glance at the U.S. Department of Treasury website page entitled "Sanctions Programs and Country Information." On it, you will find The Blob's who's who of rogue and pariah states.
With the abrupt drop in oil supplies from Russia in the wake of the Ukraine/Russia conflict, the list of rogue and pariah states is about to get shorter as the necessity of obtaining ready oil supplies trumps any concern about previous challenges to The Blob's narrative.
Venezuela and Iran, two large oil producers, are suddenly being courted by the current U.S. administration with an eye toward increasing world supplies of oil. To be fair, the United States was trying to revive a deal to prevent nuclear weapons development in Iran before the Ukraine/Russia conflict began. But a deal has become a more urgent priority since world oil supplies dropped abruptly at the beginning of the conflict.
Will all be forgiven or at least overlooked in exchange for ramping up oil exports? We do not yet know.
The facts about oil suggest an affirmative answer to the question above. World oil production peaked in November 2018 and has been in decline since then with a huge drop related to the outbreak of the COVID pandemic. (This applies to crude oil including lease condensate which is the definition of oil in world markets.) Production recovered after the pandemic but was still several million barrels per day below the 2018 peak when the Ukraine/Russia conflict began. Russian oil production has almost surely fallen since the war started as the Russians find fewer and fewer places to sell their crude and not enough space to store it all.
One very important truth about America's power is rarely mentioned by The Blob in public: That power depends in large part on access to resources found in other countries. The U.S. Geological Survey (USGS) lists 17 minerals for which America is 100 percent dependent on imports. (See page 7 of this report.) The USGS lists another 32 for which the United States imports more than 50 percent of its needs. And, contrary to the popular impression, the United States still imports a considerable amount of oil (though it exports some of it again as refined products). More important, American prices for oil are tied to the world market. Those prices would be affected by the current shortage whether the country imported oil or not.
All this explains, in part, why getting countries around the world to accept American leadership is central to The Blob's strategy. The United States needs those imported minerals and other commodities to remain a world power. It's true that if the United States can somehow provide stability to the rest of the world, that's good for those who have such resources to sell (whether they came to control them legitimately or not). But it is becoming increasingly difficult for the United States to do that-especially as it is more and more challenged by China and Russia and even some smaller countries such as oil-rich Venezuela that believe American power has limits and that try to expose those limits through their economic, political, and military actions.
Look for The Blob (that is, the American foreign policy establishment) to make more compromises in order to secure U.S. access to imported commodities critical to maintaining the country's power. Without those commodities in sufficient quantities, it will be difficult for the United States to project power into the world in the way that The Blob wants it to.
P.S. One of the critical chokepoints for the commodities that the United States needs for its electronics industry is China, which has an overwhelming share of the worldwide production of rare earth elements critical to that industry.
By Kurt Cobb via Resource Insights
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Kurt Cobb is a freelance writer and communications consultant who writes frequently about energy and environment. His work has also appeared in The Christian Science… More
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Moreover, countries like Iran, Saudi Arabia, UAE and Venezuela whom the Blob calls sometimes allies and other times ‘rogue’ and ‘pariah’ are helping accelerate this transformation.
Venezuela, one of the pariah states, is now assiduously being courted by the United States for its oil exports. But Venezuela whom John Bolton the former National Security Advisor to former President Trump wanted a regime change in it so as to get his hands on its oil wealth, the largest in the world, isn’t going to bite until all sanctions against it have been lifted.
The only nuclear deal the other pariah, Iran, will accept is one on its own terms meaning a lifting of all US sanctions against it first with no new limitations on its nuclear and ballistic missile development programmes. Iranian negotiators sense that the United States is in a hurry to reach a deal so as to focus all its energies on China and the evolving Ukraine crisis. Therefore, they will drag their feet to extract major concessions from the United States.
OPEC+ an organization full of pariahs and rogues according to the Blob adamantly refused President Biden’s repeated requests to raise production insisting on adhering to its own production policies.
But when traditional allies like Saudi Arabia and UAE refuse to take telephone calls from President Biden, then the world knows to what level United States’ influence in that part of the world has sunk.
Therefore, it wouldn't please the Blob to know that the very last barrels of oil produced in the world will come from three regions led by rogues and pariahs according to them, namely the Arab Gulf region, Venezuela's Orinoco Belt and Russia 's Arctic.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
But he immediately clarified that perspective by saying that few, if any, LIKE a policeman.