It does not take much expertise to understand
that the current tightness of the oil market is in large part due to the situation
in Iran and Iraq. As is well-known, Iran and Iraq have the highest proven oil
reserves in the world after Saudi Arabia. Iran also has the highest proven natural
gas reserves after Russia. But oil and gas production in both countries remains
far behind their capacities. The case of Iraq is too well-known to require elaboration.
But Iran also produces much less oil and gas than it could. The main reasons
are the U.S.-led sanctions regime and the international economic boycott of
The consequences for the Iranian energy industry have been devastating. As
the U.S. Energy Information Administration (EIA) observes
[.pdf], Iran's oil production has declined from 6 million barrels per day (BPD)
of crude oil in 1974 to 3.8 million BPD in 2006. "Iran's oil fields need
structural upgrades including enhanced oil recovery (EOR) efforts such as natural
gas injection," states the EIA. "Iran's fields have a natural annual
decline rate estimated at 8 percent onshore and 10 percent offshore, while current
Iranian recovery rates are 24-27 percent, 10 percent less than the world average.
It is estimated that 400,000-500,000 bbl/d of crude production is lost annually
due to reservoir damage and decreases in existing oil deposits." The Iranian
government aims to boost its oil production to 5 million BPD, but the EIA does
not believe a production increase will happen at least through 2012. As the
agency notes, to increase its production, "Iran will need foreign help."
In natural gas the situation is in many ways even worse. More than 60 percent
of Iranian proven natural gas reserves have not been developed. Iran hardly
exports any gas at all.
Of course, the Iranian government also bears responsibility for the abject
state of the oil industry. Since hard-liner Mahmoud Ahmadinejad was elected
president in 2005, investment conditions for private foreign companies have
worsened. The Iranian policy of keeping out Western companies is, in fact, the
mirror image of the Western policy of sanctions. Both policies seriously hamper
Iranian economic development. To break this deadlock, what the West needs to
do is to stop treating Iran as its worst enemy, put an end to sanctions, and
instead encourage business and political relations as much as possible. That
way the position of the hardliners inside Iran would be undermined and the prospects
for peace and stability in the Middle East would be greatly enhanced.
Such a policy of "détente" is
exactly the opposite of current Western policy toward Iran. Although the threat
of U.S. military action has receded, the American government remains on a collision
course with Iran. It has repeatedly said that "nothing is off the table."
The Democratic opposition in Congress fully supports this confrontation policy,
as does the EU. French President Nicolas Sarkozy has even upped the ante recently
by saying that the U.S.-Iranian "standoff" is "the world's greatest
crisis" and that the world is confronted with a "catastrophic alternative:
an Iranian bomb or the bombing of Iran."
The U.S. and Europe continue to insist that Iran end its uranium enrichment
program, which they claim is part of an Iranian plan to develop an atomic bomb.
They have persuaded the Security Council of the United Nations to join in this
demand. Iran refuses to give up enrichment. The fact is that Iran is acting
within its rights. It is entitled under the Nuclear Proliferation Treaty (NPT)
to pursue enrichment of uranium. The NPT requires that member countries cooperate
with the International Atomic Energy Agency (IAEA), whose task it is to see
to it that their nuclear projects are used for peaceful purposes only. Iran
does so, and the IAEA has repeatedly stated that it has found no evidence that
Iran is developing a nuclear weapon. There is thus no legal basis for instituting
sanctions against Iran, as the Security Council has done – let alone for tightening
these sanctions or taking military action against Iran.
Indeed, it is not Iran but rather the U.S. that is acting in violation of the
NPT. The treaty requires the owners of nuclear weapons to assist
the other signatories in developing their own peaceful nuclear energy programs.
In fact, the U.S. is boycotting Iran and is supporting three countries – India,
Pakistan, and Israel – that have developed atomic bombs while opting out of
the NPT. These three countries surround Iran. The NPT also requires the U.S.
and other signatories to reduce their nuclear arsenals. Instead, the
Bush administration is modernizing and expanding the American
nuclear arsenal. As of the year 2000, the U.S. nuclear arsenal comprised 5,400
multiple-megaton warheads atop intercontinental ballistic missiles, 1,750 nuclear
bombs and cruise missiles ready to be launched from B-2 and B-52 bombers, a
further 1,670 "tactical" nuclear weapons, plus some 10,000 nuclear
warheads stored in bunkers (Chalmers Johnson, Sorrows
of Empire, 2004, p. 64).
Many argue that Iran is a special case. It is not considered a "normal"
country, because it is supposedly run by a bunch of mad, fanatical mullahs who
would not hesitate dropping an atomic bomb if they had one. This image of Iran
is apparent in the rhetoric employed by Western leaders. Bush has said that
"Iran's actions threaten the security of nations everywhere" and that
Iran is "the world's leading state sponsor of terrorism." Tony Blair,
the former British prime minister, has claimed that Iran is "the greatest
enemy of peace in the world." In a speech he made in several Gulf countries,
Blair said that the world is engaged "in a monumental struggle between
those who believe in democracy and moderation, and forces of reaction and extremism."
In this epic contest, Iran is ideological enemy number one, Blair stated. Public
opinion in Western countries largely seems to have accepted this view of the
Iranian regime as evil, irrational, and unpredictable.
How "evil" is Iran really? Although
Tony Blair does not acknowledge it, Iran is a democracy, of sorts, whereas the
Gulf states that are supported militarily and politically by the U.S. and the
UK, not to mention Saudi Arabia, are not. Iran is hardly a perfect democracy;
its unelected clergy are in many ways the ones who rule the country. The Iranian
government also frequently tramples on human rights: it violates freedom of
speech, imprisons people for their views, and does not allow many social freedoms
that we take for granted. Such evils should be opposed, of course. But the same
can be said of countries such as Saudi Arabia, Egypt, and China, yet those countries
escape being labeled part of the "axis of evil." Iranians also have
the freedom to move in and out of their country and interact with people abroad,
with not too many restrictions. For these reasons alone, Iran can by no stretch
of the imagination be called a totalitarian country.
More to the point is that Iran cannot credibly be called a threat to "world
peace." The Iranian regime has never invaded another country, initiated
a war, or tried to impose its rule by military means on other nations. It is
equally false to claim, as President Bush has done, that Iran "is the world's
leading state sponsor of terrorism." Iran has always opposed al-Qaeda,
it does not sponsor terrorist acts in Western countries, and it has never supported
the Taliban, even though Bush has claimed that it does. Iran does support Hezbollah
and Hamas, but these are groups that fight against what they believe to be the
repressive policies of Israel.
Conversely, we may ask, how "good" is
the United States really? Is the U.S. a force for "moderation and democracy"
in the world? Unfortunately, the historical record does not bear this out. Since
the end of World War Two, the U.S. has supported dozens of murderous dictators
both financially and militarily: for example, Joseph Mobutu of Zaire, Augusto
Pinochet of Chili, Suharto of Indonesia, Saddam Hussein of Iraq, the shah of
Iran, Anastasio Somoza of Nicaragua, Fulgencio Batista of Cuba, and dictatorships
in Greece, Portugal, Pakistan, Egypt, and many other countries. In 1954 the
CIA sabotaged the elected government in Guatemala. The U.S. invaded Panama in
1989, killing 3,000 to 4,000 civilians. It trained and supported death squads
in El Salvador. It supported the Taliban, brought the Ba'ath Party to power
in Iraq, and sold material for chemical weapons to the regime of Saddam Hussein.
Why has U.S. foreign policy been so much at odds with the high-minded moral
ideals touted by its leaders? In my view, this must be ascribed to the fact
that within the U.S. a huge military-industrial-bureaucratic complex has come
into existence over the last decades, fed by hundreds of billions of dollars
in military spending, which has created a policy dynamic of its own, based on
its own financial and political interests rather than on any "democratic"
ideals. This complex has seriously corrupted the American political system,
the one having become so intertwined with the other that its ruling elites effortlessly
job-hop back and forth. To give one example, as former CIA officer Philip
Giraldi pointed out last year, "at least 43 former employees, board
members, or advisers for defense contractors are currently serving or have recently
served in policy-making positions in the Bush administration." To mention
just a few examples, former undersecretary of defense and World Bank president
Paul Wolfowitz worked as a consultant for Northrop Grumman, maker of the B2
bomber and other weapon systems; Gordon England, former secretary of the Navy,
was executive vice president at General Dynamics, producer of the Abrams tank
and the Trident submarine; former secretary of state Colin Powell served on
the board of Gulfstream Aerospace, a weapons supplier to Kuwait and other Gulf
states; Lynne Cheney, wife of Vice President Dick Cheney, sat on the board of
arms producer Lockheed; and Powell A. Moore, former assistant secretary of defense,
was vice president for legislative affairs at Lockheed. American military contractors
not only fund politicians on a grand scale, they also give financial support
to universities, research institutions, and the media. In many cases they own
television networks, film studios, newspapers, and so on. When similar connections
are observed in Russia, Western commentators are quick to point out the "corruption"
of the Russian system, but they ignore the same situation in the U.S.
The U.S. military-industrial-bureaucratic complex is not confined to the borders
of the United States. As historian Chalmers Johnson has documented, the U.S.
has over the last decades created a worldwide "empire of military bases."
"Not including the Iraq and Afghanistan conflicts," Johnson writes,
"we now station over half a million U.S. troops, spies, contractors, dependents,
and others on military bases located in more than 130 countries, many of them
presided over by dictatorial regimes that have given their citizens no say in
the decision to let us in." The U.S. seems to have fallen into the trap
that former U.S. president and Army Gen. Dwight Eisenhower warned of in his
famous, prophetic farewell speech in 1961, in which he coined the term "military-industrial
complex." Eisenhower warned that the U.S. "must guard against the
acquisition of unwarranted influence … by the military-industrial complex."
When it comes to Iran, the U.S. and the UK have
never shown any interest in supporting "freedom" and "democracy."
Since the start of the century, the Anglo-Persian Oil Company, later the Anglo-Iranian
Oil Company, now BP, had an exclusive concession to Iranian oil. In 1947, Iranian
oil workers went on strike against the atrocious conditions under which they
had to work (no vacation, no sick leave, no disability compensation, no electricity,
no running water). The British broke the strike by force, leaving dozens of
strikers dead. The Iranian parliament then called for the renegotiation of the
concession – a proposal promoted by the highly popular politician Mohammed Mossadegh.
As the company resisted tooth and nail and tensions rose, the Iranian parliament
in 1951 approved a new proposal by Mossadegh, who was soon elected prime minister
by the parliament, to nationalize the oil assets. The shah, Reza Pahlavi, felt
he had no choice but to sign the bill into law. The British reacted by organizing
a boycott of Western oil companies against Iran, which led to a severe economic
crisis. Then, Britain, with the encouragement of elderly statesman Winston Churchill,
engineered a coup d'etat against Mossadegh in 1952, which failed. At that time
Iran was still looking for support from the United States, where Mossadegh was
a highly popular figure. (In 1951 Mossadegh had been declared "Man of the
Year" by Time magazine!) When Eisenhower became president in 1952,
the British managed to convince the Americans to support them. In a joint British-American
coup organized by the CIA in 1953, Mossadegh was ousted and jailed. The exiled
Shah Mohammed Reza Pahlavi was brought back to Iran. He immediately went on
to brutally repress his political opponents, sentencing hundreds of Mossadegh's
supporters to death. As oil historian and Eni
strategist Leonardo Maugeri observes in his new book, The
Age of Oil, "A dictatorial regime then replaced the only democratic
and – paradoxically – Western-oriented experience Iran would ever know."
For the next 25 years the U.S. faithfully supported the regime of the shah,
who was no force for "democracy and moderation." The shah's Savak,
notes British Middle Eastern expert and veteran journalist Robert Fisk, was
the most notorious and murderous secret police force in the Middle East – "its
torture chambers among the Middle East's most terrible institutions." None
of this mattered to the U.S. and other Western countries, since the shah, as
Fisk notes, was "the guardian of our oil – during his regime, international
oil companies exported 24 billion barrels of oil out of Iran." U.S. support
for the shah was so strong that "a permanent secret U.S. mission was attached
to Savak headquarters," where the tortures took place. Ironically, in view
of the current nuclear conflict with Iran, the U.S. in those days did its best
to push nuclear power stations upon the shah. The shah's nuclear ambitions were
aborted only when the Iranian people rose up against his regime in 1979.
The story of American wrongs against Iran does not end there. A year after
the Ayatollah Khomeini came to power, the Iraqi dictator Saddam Hussein invaded
Iran. The Reagan administration decided immediately "to do whatever was
necessary and legal" to prevent Iraq from losing the war. The U.S. gave
$5.5 billion in "loans" to Saddam to buy arms. Shipments from the
U.S. and other Western countries to Iraq included bacterial cultures to make
weapons-grade anthrax (The Sorrows of Empire, pp. 223-224). In 1984,
the president's special Middle East envoy, Donald Rumsfeld, visited Baghdad
to show his support for Saddam. When Saddam carried out his infamous mass murder
of the Kurds in Halabja on March 16, 1988, with Western-supplied chemical weapons,
the American government incredibly put the blame on Iran (see A
Poisonous Affair by Joost Hiltermann). The Iranians by that time had
complained to the UN Security Council many times about the use of chemical weapons
by Iraq against Iranian troops, but the Council did not see fit to condemn Saddam.
The current conflict – the U.S.-Iranian standoff,
as Sarkozy has it – cannot be understood without reference to this historical
context. On the one hand, Iran is what it is today in large part as a result
of Western policies: the Iranian people turned to radical Islam as a liberating
force because the so-called forces for moderation and democracy supported the
tyranny of the shah; they turned to socialism and state intervention as the
result of abuses and exploitation by Western oil companies.
On the other hand, the U.S. singles out Iran as a "force of evil"
not because it has, in fact, such an evil regime, but because Iran refuses to
subject itself to American military, political, and economic interests – because
it resists America's striving for world hegemony. With a bit of exaggeration
Iran might be called a rebellious province of the U.S. global empire. As a Shi'ite,
Persian nation, Iran is also of course a threat to the regional hegemony of
America's most important ally, Saudi Arabia, and the other Arab Gulf states.
Clearly there is no moral or historical justification for the current U.S.
and Western policy of confrontation toward Iran. What is more, it is counterproductive.
It favors the hard-liners and extremists inside Iran and makes it difficult
for pro-Western voices to be heard. What should be done is to reverse this policy.
The EU in particular should take the lead in ending all sanctions against Iran
and welcoming that country back into the international community. This would
give moderate forces inside Iran a great boost. Then, who knows? "Regime
change" might come about after all – peacefully, and by the Iranian people's
own choice. The threat of nuclear war would disappear, and the world would be
a safer, better place – with more oil and gas to boot.
Reprinted courtesy of the European