East 58

The tables are turned


When oil prices determine foreign policy and global enterprise guarantees democracy, then terrorists can have a free hand.


The price of oil is never right, just like the price we pay for peace, our well-being or our values. Every so often it dawns on us. When a harrowing pool of blood on a Parisian pavement wakes us from our sleepwalking state, we squint at the world swimming before us as we try to focus on reality. We realise we have made the wrong choices, we’ve added to global disorder and we’re surrounded by ambiguous allies who are looking to their own survival, not ours.

If the enemy is devious and unpredictable, like terrorism, fear creeps into the mix, something we must exorcise by finding someone to fight. 

We are simultaneously moralists, militarists and pacifists. But for a few days, impotence is replaced by a feeling of togetherness, of the kind felt by crisis-stricken families facing a bereavement. Then we go back to business as usual, arguing, parting ways, trying to get one up on others, congratulating ourselves for our sly shrewdness.

Today, Europe is more in fear of the Islamic jihad than of the war in Ukraine, in the same way that it tolerated 200,000 deaths on its doorstep during the Balkan war, without lifting a finger. Dutch UN peacekeepers toasted with Bosnian Serb General Ratko Mladic in Srebrenica during the hot summer of 1995, while a massacre of more than 7,000 Bosnian Muslims was being planned right under their noses. No one did a thing until the Americans decided to intervene. 

It is worth remembering that the European Union, comprising 28 heterogeneous countries, still lacks a common foreign and defence policy at a time when sovereign states no longer control the game. They have their hands full with the challenges posed by financial markets, global businesses that produce their own rules (e.g., the internet) and players who can attack and overthrow the system at any time and with the most unpredictable kinds of weaponry.

This is the sea Europe finds itself swimming in at the start of 2015. There are no longer any rules, no reliable forecasts. Take oil, one example out of many. Just refer back to last year’s archives: the International Energy Agency predicted global oil demand would rise by the equivalent of 1.2 million barrels a day. Experts agreed with this forecast, saying the price would remain “stable, as it has done in the last five years”.

While Europe was marching in remembrance of the Charlie Hebdo massacre, oil prices sank to a six-year low, dropping 45% in value. But the price crash has affected other primary raw materials too, such as copper, coffee and even orange juice. Even winter vitamins have lost their appeal. Should we be elated or is this just another misunderstanding?

Everything started when Saudi Arabia decided not to cut OPEC’s oil production. The reasons for this were probably to capture market share and put pressure on the economies of Iran and Russia, in synch with the American strategic approach. What sanctions are more effective and damaging against oil and gas exporting countries than a slump in energy prices? The oil cartel is now a rusty, teetering signpost planted in the middle of the convergence between markets and geopolitical interests.

OPEC has been undermined by the escalating tensions between the Sunni Arab producers in the Gulf led by Riyadh and the Iran-Iraq Shiite tandem. This latest move was a victory for the line promoted by Saudi Arabia and its allies in the Gulf (the United Arab Emirates and Kuwait). Torn between the new competition from North American oil and gas producers and the better, more competitive conditions offered by the Saudis, the other members in OPEC had to toe the line.

But the penny has dropped with the Iranians too. This drop in the cost of crude oil is the price they have to pay – maybe rather high, but perhaps convenient and inescapable in the end – in exchange for another signature. That sealing the nuclear deal that Barack Obama must eventually ‘sell’ to a hostile Congress and allies who are equally reluctant, if not downright against it, such as Israel and the Gulf monarchies.

For more than a year, the Saudis have clearly outlined their policy on Iran to the Russians, the Iranians and above all to the Americans. The Wahhabi monarchy can only accept a return of the Islamic republic of the ayatollahs to the international talks if it is weakened, at least economically. This would make it more difficult for Tehran to give military and financial support to Bashar al-Assad’s regime in Syria and to the Shiite government in Baghdad. It would also put the brakes on Iran in the Arabian Peninsula, the Saudis’ backyard.

In Yemen, with the rise of the Houthi, a Shiite clan from the north backed by the Iranians, the future of the entire Arabian Peninsula and the fight against al-Qaeda terrorism is at stake. Yemen, long forgotten until al-Qaeda claimed responsibility for the Parisian attacks, is the battleground of another proxy war between Shiites and Sunnis, like in Syria and Iraq. Here, the presence of Saudi Arabia and Iran, the two sponsors in the shadows of the militias that fight over power and oil, seems more discreet, but only superficially. Saudi Arabia already intervened a few years ago, bombing the Houthi Shiites in the north. The campaign was close to a wash out. Disconcerting military limitations came to light, to the point where the Saudis only avoided a debacle by enlisting Yemenite soldiers and the unemployed.

Saudi Arabia feels the pressure from the Islamic State (IS) on its northern borders, and the squeeze from the Houthi rebels and al-Qaeda in the south, a shifting border that runs along lines in the sand, where loyalty to the crown matters less than that to clans and tribes. All this is happening at a time of great uncertainty for the succession in Riyadh, which has been unable to find an endgame in Syria or Iraq.

This is the new Middle East, an extremely vague notion in itself: a battleground lying between Syria and Iraq where the war against IS is being waged. It is a geographic map on paper with flexible and uncertain borders, which has swallowed up the delimitations established by the old raìs dictatorships, replaced by new masters and powers.

Europe and the West have made the situation worse in the Middle East and North Africa, thanks to their fickleness: giving support to the revolutionaries of the Arab Spring, as they did in Libya, then standing alongside authoritarian regimes out of fear of the Islamists, with equally questionable results. But today, are we more afraid for our oil supplies or the failure of entire countries on the shores of the Mediterranean? The idea in 2003 was to export democracy to Iraq with the catastrophic outcome clear for all to see, and now even the democracy around us is less of a given and perhaps more a mere hope. Topping up with cheap petrol for a few months, or a while longer, is not a victory and not even a bonus for the future.