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Oil, Mercy Me -by Taha Akyol

Oil, Mercy Me -by Taha Akyol

It has long become common practice to try and rationalize USA’s actions in the Middle East by placing oil at the center.

The UK in the 19th century, and the USA in the 20th century have indeed committed various deeds in the name of oil. These practices and policies continue into the 21st century, yes, but the situation is slowly changing. Oil is not the root factor of all evil, as it used to be, anymore.

Shutting down the Strait of Hormuz

Iran is threatening to shut down the Strait of Hormuz as a move to counter Trump’s recently announced sanctions. Such a move would practically stop the follow of Gulf oil out into the world. Would Iran dare such a move at the risk of infuriating the Arab world? The closure of the strait will surely drive up oil prices, but will that be enough incentive for Trump to walk back on his decision?

Not likely, since the US is not as dependent on Middle East oil as it used to be. The Arab states may increase their production to meet the demand, but how long can Iran endure without exporting oil?

World’s top oil producing countries already have plenty of supplies. Furthermore, the United States may increase its liquified natural gas and crude oil exports and end up profiting from this whole mess. It is inconceivable that Trump -the businessman, would not have considered pumping USA’s exports prior to squeezing Iran.

United States is now a net energy exporter

I have recently read: “Turkey and Transformations in Energy Sector” by energy expert Selim Kuneralp which is available online. According to the report, United States, a country generally believed to be energy dependent, has already crossed the threshold to become a net oil and natural gas exporter. It has been selling the shale gas and crude oil it has discovered recently:

“The United States with its 10 million barrels/day production has already surpassed Saudi Arabia and Russia as the world’s top oil producer. They are exporting 1.5 million barrels/day to Asia, threatening Saudi Arabia’s and Russia’s prominent positions in the market.”

Trump has taken additional steps to pump up the production, by annulling Obama’s clean energy initiatives via executive orders. In short, we are entering a period where oil-based international strategies are starting to lose their influence.

The Europe factor

Iran has a better chance of standing up to Trump by using diplomacy with Europe than shutting down the Strait of Hormuz. Although nobody is not expecting Russia and China to bow down to Trump’s demands either, all eyes are on Europe. Europe may not be much to look at militarily, but as an economic force, it is still a giant.

Trump is picking up an economic fight with Europe, particularly Germany, by implementing tariffs. The EU is countering USA’s attack by promising retaliation that may amount to $294B globally. The Americans applauding Trump for challenging the world may soon find themselves isolated.

What should Turkey do?

Turkey should simply embrace law and science. The percentage of high-tech products in our exports varies between 2% to 3.5%. That’s the reason why our exports can never meet our imports, our current deficit is on its way to $60B, and our foreign debt is approaching $500B.

In order to finance this, we need foreign investment and loans, which we have a hard time getting because of our low standing in rule of law.

It is unclear what Iran will do, but as for Turkey, we must refrain from hardline politics and work towards diplomatic solutions to our international problems. We must reestablish our old relations with the West. And we must stick to law, science and technology with our heart and soul.

 

Originally published in Turkish at: http://www.hurriyet.com.tr/yazarlar/taha-akyol/aman-petrol-40922798

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Sigma Selected

Sigma Selected are independent of the news-gathering side of our organization.

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