Persian Gulf Myths

Graham E. Fuller and Ian O. Lesser

From Foreign Affairs, May/ June 1997

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Summary:  The basic assumptions of U.S. policy toward the Gulf demand rethinking. The Pentagon pays up to $60 billion a year to protect the import of $30 billion worth of oil that would flow anyway. Playing the role of regional hegemon ties America to troubled regimes and leaves it out on a limb, while allies sit back. Washington must hedge against inevitable political change in the region by spreading the burden and the say, reversing arms proliferation, and encouraging the Gulf states to come up with some security of their own.

Graham E. Fuller is a senior political analyst at Rand and a former Vice Chair of the National Intelligence Council at the CIA. Ian O. Lesser, a former member of the Policy Planning Staff at the State Department, is also a senior political analyst at Rand.

A POLICY FOR LIVING WITH CHANGE

Policy toward the Persian Gulf, one of the more successful facets of U.S. foreign policy over the last decade, is headed for rougher times in the next. "Dual containment," the strategic heart of U.S. policies toward Iran and Iraq, is unraveling. Alliance support in Western Europe is slipping, internal differences in the Gulf Cooperation Council are growing, the potential for instability in Saudi Arabia has become dramatically evident, and a faltering Middle East peace process puts new pressure on Gulf regimes. America's Gulf policy contains time-honored myths, holdovers from the Cold War, and many formulations that have become cloudy or rigid with use. Those basic principles require reexamination. Moreover, the continuing risk of terrorism against the large U.S. military presence in the region highlights the looming challenges to regional strategy.

MAINTAINING ACCESS TO OIL AT MODERATE PRICES

Gulf policy is founded on the principle that access to the region's oil is critical to Western -- indeed, global -- prosperity. The Gulf's many small oil-producing states are largely incapable of defending themselves against larger players in the region. Since the collapse of the Soviet empire, however, serious military threats to oil access in the Gulf have diminished drastically. Even the Iran-Iraq War of 1980-88 with its assaults on oil platforms, pipelines, terminals, and tankers did not seriously affect the oil market or Western economies. No military power today has the capability to deny the West access to oil, although perceptions of Western vulnerability remain widespread. No anti-American dictator in the Middle East -- not Saddam Hussein, the Ayatollah Khomeini, or Muammar al-Qaddafi -- has attempted to hinder oil sales to the West. What actual task, then, does "maintaining" the flow of oil entail?

Even if a cutoff of oil is only a remote possibility, the West has been concerned that no cartel or group of oil-producing states be able to exert monopolistic control over oil prices. American support for Saudi Arabia, whose oil policies are dedicated to perpetuating moderate prices over the long term, has been the centerpiece of this strategy. With the Saudis' ability to decisively influence prices by varying their enormous production, other producers have found it difficult to significantly affect pricing. While the United States is opposed to any monopoly in oil, in reality the Saudis already possess monopoly-like control over production and pricing. Even if major oil-producing states tried to raise price levels by cutting production, how long would it be before other producers rushed in to profit from the market vacuum? Although a decrease in production is a stated goal of OPEC, it is not consistent with individual OPEC members' interests. Seizure of one Gulf state by another ... la Saddam is, of course, unacceptable, but that has less to do with energy security than with preventing a grab for power by hostile states in a strategic region. "Oil" may have been part of the early rationale for U.S. intervention after Iraq invaded Kuwait in 1990, but the real ...

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