Why ISIS Might Destroy the Middle East Oil Fields

The Mad Hatter

It is not that ISIS has made any secret of their short term goals - to rule over all Muslim countries and for everyone not to their liking - Shias, Christians, Jews, Yazidis, Alawites - to be dead or enslaved.

Their longer term goals are usually ignored as just vague propaganda - a world Islamic state.  The risk is not that they might achieve it, but the steps they might take in trying to achieve it.

One is that they could take Baghdad.  The majority-Shi'ite majority Iraqi army showed no stomach for fighting and ran away leaving Mosul undefended.  It was hoped that getting rid of Prime Minister al-Maliki and his narrow Shi'ite sectarian government might improve things but the new prime minister seems little better.  If the Shi'ite - Sunni polarization continues, the Sunni tribes will be un-mollified and will either passively or actively support ISIS.   It is perfectly foreseeable that the Iraqi army would be no more successful in defending Baghdad than it was in defending Mosul.

If Baghdad were to fall, the civil war in Iraq would effectively be over.  ISIS would control the country except perhaps Kurdistan.  That would be a bad outcome but not one to make Americans put down the remote during football season.

What comes next however might.  Southernmost Iraq reaches the Persian Gulf, along the shores of which more than a third of the world's petroleum and gas are pumped and shipped.  Were ISIS able to advance against the small countries along the southern, Arab, coast of the Gulf, they could menace the oil fields from Kuwait to Oman.  This has been done before, by Saddam Hussein when he seized and annexed Kuwait.  Saddam's theory was that Kuwait was a province of Iraq and had to be reunited with the rest of the country.  That is what the First Gulf War, Desert Storm, the liberation of Kuwait, was about.  Had Saddam not been driven out, his army would have over-awed Saudi Arabia and the other Arab states on the Gulf, making them in effect Iraqi protectorates.

ISIS' pretensions are far grander.  Their claim is to all Sunni countries everywhere, starting with those closest to hand, those on the Gulf.  Clearly Saddam's plans were to control the export of oil from the Gulf to manipulate Western powers by controlling their energy supply.  And to enrich himself and Iraq with the proceeds of controlling those exports.  Saddam's objectives were the banal and familiar ones of wealth and power for himself and his country.

ISIS sees itself as a religious revival, a restoration of the greatness of the early Arab caliphate, and along with it, the destruction or at least humbling of the Infidel powers who have over-shadowed and oppressed the Muslim countries and Islam in general.

What they see as the sickness of Westernization - materialism, technology, consumerism, Western culture - can not be driven out by accumulating more wealth and with it more import of the trappings, culture, and thinking of Western society.   What religious puritans like ISIS want is not wealth but the austerity and virtue of the early Muslim conquerors of the 8th Century.

They want not to milk Western society of money with which to buy trinkets like Mercedes cars and private jets and MacBooks and iPhones but to rid Muslim society of such things entirely.   They can see as clearly as anyone that the reason Middle Eastern societies are awash in such things is precisely because they have the oil money to buy them.  One way to get rid of them is to get rid of the oil and thus of the money by destroying the oil fields.

They have not destroyed the few small oil fields they have captured thus far because they want oil revenues to buy arms and pay military salaries.  But it does not follow from that that when the scale changes to the vast oil resources of the Persian Gulf that their strategy will not change.  We see what use they have been able to make of looting a bank in Mosul.  Imagine them looting all the banks in Kuwait, Dubai, and the UAE.  Their military needs having been covered, their attitude toward accumulating oil revenues might become quite different than they have shown heretofore.

The other objective they have is not just to manipulate and humiliate the Western countries but to defeat them economically.  The same blow which would purify Muslim societies would also cripple Western ones.

There were temporary and partial restrictions of oil supply from the Persian Gulf in the 1970's after the Arab surprise attack on the Jewish holiday of Yom Kippur in 1973.  Israel defeated the combined Arab armies in spite of having been taken by surprise on their holiest holiday.  Arab impotence was followed by Arab petulance.  Having been being defeated in spite of their treachery, the Arabs vented their pique with the oil embargo of 1974.   Fluctuating high oil prices led to economic instability in the Arab countries and to inflation in the Western ones throughout the remainder of the 1970's.

That was when the Saudi Arabia, both the largest oil producer-exporter and the most politically fragile one, figured out that it was in their dynastic interests to keep production and prices stable.  Which matched Western interests.  So the Saudis came to be seen as allies and puppets of the West, particularly of the United States.  There have been no oil embargoes since.

The destruction of the Gulf oil fields would not just causes high oil prices, it would cause simultaneously high prices and outright lack of supply.  The world economy in the past few years showed its vulnerability to no worse a disaster than the floating of fraudulent mortgage-backed-securities on Wall Street.

The Persian Gulf countries, Iran, Kuwait, Saudi Arabia, Qatar, the UAE, and Oman, have 40% of the world's oil production capacity and 55% of all proven reserves.  The abrupt removal of that much capacity and reserves from the world market would make the economic disruptions of 2008-2009 look small.  One could use the word "collapse" to describe the effect on the world economy, particularly on world trade.  The certainty that the removal would be permanent would compound the seriousness of the collapse.

Everywhere governments would be forced to institute systems of rationing.  Air travel both domestic and internationally would be severely curtailed by fuel prices and availability.  Commuting would wither and with it the prosperous suburbs surrounding every major city.  Trucking would become prohibitively expensive or impossible.  Goods would travel by ship and by rail.  Power plants that could would switch from oil to coal.  Those that couldn't would close, causing widespread and permanent power outages among peoples for whom, for generations, power outages have been momentary inconveniences, not permanent.  Large areas of the developed world would go off the grid.  People in once-rich Western countries would be reduced to kerosene lamps for lighting, and even kerosene would be expensive and hard to get.  Televisions, refrigerators, computers, and indeed all appliances, would become inert relics of another time.   So would private automobiles.

Deprived both of petroleum-based fertilizers and fuel for farm equipment, agricultural production would plummet.  Hunger would stalk once-rich lands.  The GDP of big Western countries could be cut by half or more.  The fact of the shortages being known to be permanent would mean that there would be no new investment in plant or equipment to help economies recover.  After the initial crashes would come not recovery but continued economic shrinkage as both supply and demand for goods and services continued to diminish as purchasing power shriveled everywhere.  

Unemployment, already stubbornly high in many Western countries, would rise to Third World levels and stay there or continue to rise.  There would be rioting and political instability even in Western countries with long histories of democracy.  In other countries things would be still worse.

That is what happened in the 1930's.  The Great Depression illustrated the fragility of the world economic system.  That collapse came about through internal instabilities in the capitalist system, without any external cause at all.  The downward spiral lasted three years.  In 1932 the cumulative value of the corporations on the New York Stock Exchange was 6% (not a typo - six percent) of what it had been at its peak in 1929.  Recovery was tepid and slow.

In the oil-exporting countries outside the Gulf:  Russia, Indonesia, 
Venezuela, Norway, Mexico, Nigeria, Angola, Brunei, there would be floods of wealth.  It would come both from the sale of petroleum to a world market starving for it and from the economic effects of breakneck development of new oil production.

Economic contraction in the West would be compounded by persistent waves of terrorist attacks against urban subway systems, power grid infrastructure, bridges and tunnels, airports, airplanes, freeway overpasses, ports, ships, and political institutions.

Governments would begin to print money to cover shrinking revenues and growing deficits.  They would call it "expanding the money supply".  Inflation and falling stock prices would destroy the value of savings and nest eggs.   Interest rates would rise to two and three digits figures as lenders moved to ever-more secure and ever-less productive places to put money.

Western governments would find their war potential curtailed.  Russia would continue to find excuses to annex one after another of the former Soviet republics.  NATO would become impotent to do anything about it.  As the Russian sphere-of-influence expanded into eastern Europe and the Balkans, into Turkey, and Central Asia, Putin's vision of a Eurasian union would begin to hove into view.  The only sand in Moscow's gears would be escalating terrorist attacks within Russia from its own large Muslim minorities.

The United States would, both from necessity and inclination, begin to turn toward a Tea Party-led soft isolationism.  American influence throughout the world would become as quaint a memory as the British Empire is today.

The Saudi regime and the other oil-supported monarchies of the Gulf would collapse quickly without oil revenues to smooth over and bribe away opposition.

The Islamic State, un-menaced by the US or other Western countries, would expand effortlessly throughout the Middle East as morally bankrupt regimes from Morocco to Oman, now also financially bankrupt, toppled one after another.  Israel would be besieged.  After repeated mob attacks and rioting, Muslim quarters in European cities would become something like fortified.  Within their closed ghettos, sharia would become the norm without much protest from distracted European governments.

That scenario, the purification of Muslim societies of paid-for Western influences, and inflicting catastrophe on the Western and world economies, is why ISIS might destroy the Persian Gulf oil fields if they get them.

The Trial of Osama bin Laden

The current issue of 'Vanity Fair' magazine has an article titled, "The Hunt for Geronimo" about the White House process leading up to the killing of Osama bin Laden.  The article is adapted by Mark Bowden from his book of the same title.  Bowden personally interviewed most of the participants, including President Obama.

On page 190 Bowden writes, "In the unlikely event that Bin Laden surrendered, Obama saw the opportunity to resurrect the idea of a criminal trial.  He was ready to bring him back and put  him on trial in a federal court."

Then follows a direct quote which Bowden attributes to President Obama in double quotes on page 190.

We worked though the legal and political issues that would have been involved, and Congress and the desire to send him to Guantanamo and to not try him and Article III [of the Constitution].  I mean, we had worked through a whole bunch of those scenarios,  But, frankly, my belief was, if we had captured him, that I would be in a pretty strong position politically, here, to argue that displaying due process and the rule of law would be our best weapon against al-Qaeda, in preventing him from appearing as a martyr.

Whether one supports President Obama's re-election or not, this remark should give one pause.  It is astonishingly naive to think that the message the Muslim world would take away from a public trial of Osama bin Laden in an American court would be to respect us for due process and the rule of law.   That the President could be so wildly wrong cannot help but make one question his judgment.  This is not a partisan issue, it is a matter of simple competence.

A much lesser note is that it illuminates the 2009 fuss when we were told that Attorney-General Eric Holder wanted to try Khalid Sheikh Mohammed, who was immediately responsible for planning 9/11, in federal court in Manhattan.  Pretty much every single person in New York thought that was a bad idea and said so.  The plan was withdrawn and Holder wound up with egg on his face for having proposed it.

The President's remark suggests that trial in Manhattan was only one of several option Holder presented to the President and was the one President Obama chose.  It appears to me that when it blew up in their faces, the Attorney-General fell on his sword as ordered, and the President could semi-truthfully claim that Holder had suggested the idea to him.  Taking the hit to deflect flak from the boss is to be expected, so that in itself does not reflect badly on either man. Indeed, it reflects well on Holder.

Two years later, in May 2011 President Obama, unchastened, thought trying Osama bin Laden, a vastly bigger fish than Khalid Sheikh Mohammed, in federal court was a good idea.  We have just seen how the faithful in the Muslim world reacted to a two-bit Youtube video.  Four of our people died in that.  Imagine what the reaction would have been to a lengthy public trial of the charismatic central figure of the Salafist movement.  Or even just the reaction to the inevitable sermons and exhortations to revenge for his coming death that bin Laden would have delivered in Arabic from the dock and had broadcast around the world.  Not a US embassy, consulate, school, or other American institution anywhere in the Muslim world (the 57 countries in the OIC, the Organization of Islamic Countries) would have survived.

Sure, I have the advantage of hindsight but I do not have the advantages of the resources of the entire federal government and all day every day to think about these things and every smart person in the country to ask advice of.  In any case, President Obama also had the advantage of hindsight.

That. two years after the Holder-Khalid fiasco, President Obama still thought trying Osama bin Laden in federal court was a good idea makes me wonder about his judgment.  It might make you wonder too.

A Longer View of the Middle East

[The Salafist flag - expect to see more of it]

There are two fundamental processes emerging in the Middle East - one is the emergence of a prolonged war between Sunnis and Shi'ites.  The other is the Muslim anti-Western reaction.

The war in Iraq has become a series of attacks by the formerly ruling Sunni minority against the Shi'ite majority.  In Syria, the war has become a sectarian struggle between the ruling Alawite minority and the Sunni majority.  Alawitism is a sect of Shi'ism.  The primary Muslim support for the Alawite regime comes from Shi'ite Iran.  The recent demonstrations in Bahrain were the Shi'ite majority protesting against the ruling Sunnis and the absolute rule of the Sunni emir.  The tensions in Lebanon are spread among the large Sunni minority and the even larger Shi'ite minority.  Both minorities are armed, the armed Sunnis are led by the Palestinians in their "refugee camps" and the Shi'ite Hezbollah militia, armed and funded by Shi'ite Iran.

The rivalry across the Persian Gulf is between the ultra-Sunni Kingdom of Saudi Arabia and the great Shi'ite power, Iran.  Until the United States overthrew Saddam Hussein, Iran and Syria were the only Shi'ite governments in the world.  Now Iraq is the third.

The Shi'te part of the world is Iran, the eastern and southern parts of Iraq, and the southern shore of the Persian Gulf, Syria, and parts of Lebanon.  Except for Iran itself, everywhere there are Shi'ites there are also Sunnis.  West of Iran, Iraq, Syria, and the Persian Gulf, the Muslim world is Sunni.

The great Shi'ite power is Iran.  Its proxies are Syria and Hezbollah.  The two great Sunni powers are Saudi Arabia and Egypt.  Their allies are the emirates and sheikdoms on the southern shore of the Persian Gulf.  The struggles between these power blocs were until relatively recently submerged under the Ottoman rule, then British and French rule, and American influence (five of the Seven Sisters global oil companies are American).  Even afterwards, loyalties to the West or the Soviet Bloc loomed large.  Since the departure of Saddam Hussein, the chasm between Sunni and Shi'ite has grown ever larger and more contentious.

The arc of conflict runs through Lebanon, Syria, Iraq, and all the Gulf States including Saudi Arabia.   The Shi'ites though traditionally downtrodden ignorant impoverished masses, live over most of the world's oil reserves.  But only in Iran, and now in Iraq, do they control the oil under the ground they live on.  The various national states and the specifics of their politics merely obscure the fundamentals of the situation but do not greatly change it.

Turkey is also a great Middle Eastern power and technically Sunni, but it is relatively secular and, until recently, has been relatively aloof from the struggles among its Shi'ite and Sunni neighbors.

What is provoking the disorder throughout the Muslim world is the same problem we see in so many countries - how to deal with the West.  Almost everything we think of as modernity is seen, perhaps correctly, as both the fruits and instruments of Western cultural and economic penetration of Muslim countries.

A number of countries have gone through a similar series of stages.  The initial situation was to struggle to be rid of the British, French, and Italian colonial empires.  The British set sail for home from Egypt, Jordan, Palestine, and Iraq in the 1940's and 50's.  The French bade adieu to Morocco, Tunisia, Djibouti, Lebanon and Syria about the same time.  Their departure from Algeria, which had a substantial French minority, was more traumatic and more violent.   Italy had been driven out of Libya, Ethiopia, and Somalia by the Allies during the Second World War.

For a long time, in most of these countries, independence meant little except a flag and local faces in the government instead of European ones.  Economic relations now included a local elite but were generally unchanged.  European and American companies controlled narrow specialized economies.  Whole economies were based on the export of a handful of commodities, like Egyptian cotton and dates, plus tourism, in other countries, only oil.  This neo-colonial situation, as it was called by its opponents, came under pressure with the rise of the Soviet Union's funding of revolutionary movements, particularly among military officers.  The 1960's and '70's saw the rise of leftist-nationalist military dictators across the Middle East - Nasser in Egypt, Gadaffi in Libya, Suleiman in Sudan, Saddam Hussein in Iraq, Hafez-al-Assad in Syria, Boumedienne in Algeria, Yasser Arafat among the Palestinians.

But each of these governments and their successor regimes got caught up in Cold War politics.  Each tried to milk both sides for as much aid and support as they could get.  In doing so they welshed on their nationalist commitments to keep foreign influence out and foreign capital out.  The classic example is the Aswan Dam, begun by the Soviets, completed by the US.  As the US and Europe slowly prevailed in the Cold War, Western economic and political penetration increased.  Western goods, Western businesses, Western clothing, production for Western markets, Western media - movies, television, music, and lately the Web and everything on it, spread out, primarily in the cities.

With the expansion of Western businesses and trade came enormous opportunities for baksheesh, corruption, bribery, "commissions", and so on.  The ruling elites grew wealthy, particularly galling in countries where everyone else was grindingly poor.  But such is the depth of Islamic devotion and primitive xenophobia, that the great masses of the people of these countries objected, not to the corrupt concentration of wealth, but to the foreign connections it was based on.

The dictators were generally relatively secular and gave only lip service to religions as politicians do in Western countries too.  Only Gadaffi made a real attempt to combine military rule and Islam and with mixed success at best.  As the dictators became old and their regimes more clearly associated not with rebellion against foreign influences and modernity, but with participation in it, they lost legitimacy in the eyes of the populations.  They had lost their raison d'etre.

Which led to the Arab Spring, the widespread overthrow of these dictatorial regimes.  We in the West confused what we would have hoped for, had we lived under these regimes, for what the Arabs actually wanted, which was quite different.  We assumed that they would want democracy and freedom because that is what we would have wanted.  When we say "corrupt" we mean taking of money in shady dishonest ways. To Muslims, "corrupt" means something more like, "impure, un-Islamic, foreign/infidel connected, alien to Islam."  Revolution was in the air.

Now let us think back to the time of the Russian Revolution for a lesson in how revolutions work.  The initial revolution, in March 1917, led to just what the Western countries wanted, a parliament - the Duma, run initially by the Constitutional Democrat party, the so-called Cadets, led by Alexander Kerensky.  Within months the Cadets found themselves out-numbered and out-maneuvered by the bigger parties, the Socialist Revolutionary Party, the party of most of the peasants, and the Bolshevik Party, the party of the urban workers.  The new revolutionary government was soon overwhelmed by its own more radical elements and revolution broke out within the revolution.  The Bolsheviks staged a coup against the new, not-yet-well-established Kerensky government and won the ensuing civil war.  They remained in power for 72 years.

It begins to seem like much the same thing is happening in the Arab Spring countries.  The leaders of the initial revolutions were relatively secular people wanting liberal democracy, and moderate Islamists (moderate for Islamists) like the Muslim Brotherhood in Egypt.  They staged and won elections, that led to among other things, the election of Mohammed Morsi, one of the leaders of the Muslim Brotherhood, as president of Egypt.  Provisional Western-oriented governments were constituted in Libya and Tunisia.

These governments sought to normalize relations with the West.  Implicit in this normalization was the assumption that the leaders of the moderate revolutions would assume the gravy train positions until recently held by the personnel of the deposed dictatorships.  Notably the assault on our embassy in Cairo came while a delegation of CEO's and diplomats from the West were there to discuss investment opportunities with the Mohammed Morsi government.  

Instead of Russia's Socialist Revolutionaries and Bolsheviks, the Arab countries have the Salafists, puritans who want to resurrect the Eighth Century Islamic society and empire of the earliest years of Islam, of the time of Muhammad and the first four Caliphs.  In terms of how modern societies and economies work, they are effectively anarchists.  While their intention is to return to the imagined purities of the founders of Islam, in order to do it they would have to reject everything Western which includes almost everything that modern life is based on.  Shari'a would become the legal and social system.  Not least, the large populations of many countries, most notably Egypt, would starve without trade with the non-Muslim countries.  Without export markets for oil, Muslim countries from Borneo to Nigeria would wither economically.   

Yet the Salafists have unlimited legitimacy among have-not Muslims, the so-called Arab street, both because of, and in spite of, their eagerness for jihadi violence.  The Salafists represent Islam unsullied by a hated modern reality in which the great powers of the world are non-Muslim.  The willingness of Morsi's government to continue the peace treaty with Israel and the $1.2 billion in annual aid that goes with it, and the killing of the 25 Salafists in Sinai after they killed 16 Egyptian policemen, Morsi's willingness to maintain outwardly friendly relations with the United States, have all painted him to many Egyptians, as just another corrupt Westernizer, another Mubarak.

The ultimate aim of the Salafists is exactly what the critics of extremist Islam have said it is - to overthrow all the Muslim governments and to re-establish the Caliphate as it was in the Eighth Century when it ruled from India to Spain.  That the re-established Caliphate would soon overcome all the non-Muslim countries and establish a global Muslim state is regarded as a millennialist certainty.

But, as one newscaster, put it, Mubarak could and would have dealt with the revolutionary protests by simply shooting the protestors.  Having alienated the military by firing Field Marshal Tantawi a few weeks ago, Mohammed Morsi does not have that luxury.  Mohammed Morsi must either find a way to suppress the Salafists - good luck with that, or to mollify and co-opt them.  In any scheme to co-opt a powerful opponent, there is always the question of who is actually co-opting whom.

In the long run, the Salafists have an unlimitedly large potential audience and an endlessly fervent one.   On the one hand it is not clear how a bunch of irrational semi-illiterate religious fanatics can prevail against a sophisticated modern regime.  But if they can prevail, it would be at a time of transition when the regime is new and weak, not yet fully organized and entrenched.  Like now.