"War continues in Iraq. They're calling it Operation Iraqi Freedom. They were going to call it Operation Iraqi Liberation until they realized that spells 'OIL' "
Jay Leno (1950- )
With a handle on the demographics of Muslims in the Middle East, an understanding of the economy is the next place to go. It does not take much inspiration to start with oil.
There has been some controversy recently about whether the official figures on oil are honest and whether they have been calculated correctly. Some experts think there is something fishy about them. It's not easy to judge whether they are right or not, but a table of figures produced by Colin Campbell shows data which suggests some overstatement. Campbell is an oil expert who propagates the theory that the peak of oil production is either close or has passed, so we will soon face a shortage. His table shows that, when OPEC linked production quotas to declared reserves, some of its members mysteriously reported large increases in their reserves. Here are his figures:
Peak Oil (the theory that oil production has peaked) is a good example of a controversy where various ideas and figures are offered by opponents to support opposing points of view. A group of motivated consultants (who have worked in the oil industry but are now on its fringes) is pitted against another group representing the oil industry establishment. I am not an expert and have absolutely nothing to contribute to this debate. However, I am of the opinion (I emphasise the word opinion) that doom theories are very common and are rarely borne out by events. So, on balance, I don't believe (I emphasise the world believe) that the theory will prove correct.
This does not mean that Campbell's table, and his conclusion that certain countries are overegging the pudding, should be dismissed out of hand. The figures do look fishy and we must proceed with caution.
The procedure I follow in such circumstances is that I go with the official figures. There is nothing else that can seriously argue with them (though the table provides some clues about the magnitude of any errors), but I sound a note of caution about any conclusions drawn.
So let's see what we can find. A Google search yields an embarrassment of riches. Lots of sites offer information. The most comprehensive is provided by the Energy Information Administration (a US Government body which helpfully compares the results from three separate sources). Most of the figures are similar, so you can be reasonably sure that the people who look at these things are all singing from the same hymn sheet. Luckily, Infoplease seems to use the same base source and provides a much more user-friendly table which I have decided to go with.
And from this I have drawn up Chart 1, which shows immediately why the Middle East attracts so much attention. Many people I talk to are – obviously – aware that the Middle East is important for oil, but they are staggered by how overwhelmingly important it is. I certainly was.
Based on official figures, the Middle East is the repository of 56% of the world's oil (60% if we add North Africa). Even if we assume that Colin Campbell's estimates fully reflect the degree of overstatement and adjust the figures accordingly, the area still controls 48% of the world's oil reserves.
So the importance of the region is awesome and we can see why the US feels compelled to maintain a powerful political presence in the area.
Chart 2 shows how oil reserves are distributed throughout the Middle East:
- Saudi Arabia stands out as the largest repository, with twice as much oil as any other country.
- Kuwait and the UAE have a little less between them.
- Iran and Iraq are the next largest oil-producing countries and it is easy to understand why Saddam Hussein thought it worthwhile to try to capture the oil wealth of his neighbour Kuwait – and also why the US, with very willing allies, did not think twice about coming to Kuwait's aid.
- Afghanistan has no oil and geographically is distant from the real action. It is not surprising that the US was only a half-hearted about the invasion – Iraq was a much better prize.
Chart 3 is redrawn to exclude Campbell's suspect oil reserves. We can see how the picture changes in total magnitude but hardly changes at all in the relative importance of the countries.
So what conclusions can we draw? The reserves fall into three groups:
- The largest reserves are in Saudi Arabia, held by an administration that is generally friendly to the West and reliant for military support on the US. However, it has a restive population which it controls by repression. This restive group is well-funded and supports terrorist operations throughout the world (the Al Qaeda network). The administration's freedom to act is circumscribed by its deal with the fundamentalist Sunni Wahhabi sect (by definition an enemy of the West and its values) to which it has ceded to it a large measure of power. The country is also seen by many Muslims as the champion of the Sunni world (which includes 90% of Muslims, about a billion people). Saudi's rulers have to bend to the mood of this constituency which is tending to become more fearful, more fundamentalist and more anti-Western. So the largest oil reserves are under the control of an administration which looks distinctly vulnerable.
- Almost as large are the reserves of Kuwait and the UEA, countries with small populations which are entirely reliant for their defence on outside allies. The invasion of Kuwait showed that there is a willingness to accept the Americans and it is difficult to imagine that any alternative strategy is open to the ruling houses in these countries. It is also difficult to imagine that the US would let these states fall into the hands of hostile groups, although hostile fundamentalist organisations are no doubt working to exploit vulnerability in these countries.
- The third batch of reserves, again about the same size as those of Saudi Arabia, is shared between Iran and Iraq. And this is where Sunni and Shia come face to face. In Iraq, the Shia majority was kept down by a Sunni minority led by Saddam Hussein, who (in 1980) led the country into an eight-year war with the Shia in Iran to head off any possibility that they might foment internal resistance. The war cost a million lives and was characterised by waves of Iranian suicide infantry clearing minefields by blowing themselves up, and by gas attacks by the Iraqis. You can imagine the ill-feeling between Sunni and Shia that this left behind, and both sides took the opportunity offered by the invasion of Iraq to stir up as much hatred and mistrust as they could. There are daily atrocities. Groups of people and buildings are targeted, as well as the abduction, torture and murder of individuals.
The coalition walked calmly into this hornet's nest and was surprised when it was stung. It's arrival has hardened attitudes throughout the region.
This is not an exceptional conclusion. But what I have done is to assemble evidence which means that we can now defend this point of view, while it is harder for opponents to challenge it. It also makes the argument between the pro- and anti- war groups much clearer. Instead of all the nonsense about weapons of mass destruction, regime change, the freeing of a subjugated population, and the introduction of democracy, we have a question to ask. Do we want to risk half the world's oil falling into the hands of a hostile group of fundamentalists who are openly hostile to the West and its values?
If we ask this question, the issue becomes very clear and, in one sense, easier to argue. On the other hand, questions of morality and international law are thrown into sharp and unflattering focus.
So a big decision was made on our behalf and an enormous risk was taken. It will be a tragedy – for which we shall all have to pay – if it turns out that the risk was taken by a man who was not up to the task and who bodged this difficult and dangerous venture.