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So for a long time oil has played a special role in American foreign policy and military strategy.
Oil is a uniquely important commodity in global affairs. It’s an input to everything in our modern way of life; it’s very important for protecting our prosperity; and at a certain level oil is essential for high-quality military power: to fight you need access to oil.
And in the Cold War the United States was concerned that the Soviet Union could interrupt American access to Persian Gulf oil, which we needed in order to defend Europe, defend our own interests against the Soviet Union.
And so we took it on as a military mission to protect key sources of oil supplies around the world, especially in the Persian Gulf, from outside interference (so from the Soviet Union being able to threaten them).
Now, of course, for a long time the Soviet Union hasn’t existed. That particular scenario hasn’t posed a challenge for the United States, but the United States has feared oil has continued to play a role in American foreign and military policy because the United States has feared that political disruptions in Middle East—internal instability, the threat of extremist fundamentalist Muslim control in the Middle East, if that came about—could pose a threat to American oil supplies that especially would hurt our prosperity, that they could make us poor.
And so we’ve used military force to try to reduce instability in parts of the world, especially the Persian Gulf, where we’re afraid that instability would threaten global oil markets.
That policy has both been largely unnecessary and largely ineffective. So it has happened that there was a moment where it seemed to work very well when we sent troops in 1990 to defend Saudi Arabia from Saddam Hussein who had just concord Kuwait, and then we liberated Kuwait in the Gulf War but did not continue to attack Iraq.
And the result of this was to maintain access to Persian Gulf oil, to maintain the independence of a number of Persian Gulf oil producers. And that made sense in a bunch of ways. But then since that time we’ve actually become a primary threat to stability in the Middle East rather than a primary guarantor of stability in the Middle East, in that when we invaded Iraq we set in motion a lot of events, created a much more salient internal stability challenge for many countries in the Persian Gulf by hardening and militarizing domestic conflicts in a lot of these countries—between Sunnis and Shiites, between different brands within Sunni Islam—we’ve created internal instability that we can’t address very well from outside. The United States lacks the detailed information to understand and manipulate the politics of these countries. Instead we get manipulated by local actors that, in a sense, makes the instability worse.
So if you think of it this way, in the United States we spend a lot of time thinking about and studying American politics and elections, but we don’t understand American politics very well. Even with all of the background cultural knowledge we have an understanding of our own politics—nobody expected President Trump to rise as a phenomenon and become president—We don’t understand our own politics! How can we expect to understand and manipulate the politics of far away countries in the Persian Gulf where we don’t know the local percentages as well, we don’t know the situation on the ground, we don’t know what contributes to people’s political activism?
Although we can actually be fairly sure of one thing that contributes, which is, they don’t like the feeling that they’re being pushed around by outside influences like the United States showing up and telling them what to do.
And so we can create hostility to the United States by saying, “Oh we’re showing up to defend the stability of Middle East oil supplies,” but we can’t actually defend Middle East oil supplies from local instability in the Middle East very well, and so we’ve actually created a lot of the problems in the oil market.
However, all of that said, the global oil market protects us so we don’t actually have to worry as much about that kind of instability in any particular oil supplier.
So what happens in the oil market is when there’s a disruption in one country of the world that reduces their oil supplies, their ability to supply the global market, to supply consumers like us in the United States, when there’s that kind of a disruption other suppliers compensate.