An interesting angle on the Iran problem: induce high gasoline prices through a worldwide embargo
This plan laid out in the NY Sun is worth thinking about:
Legislation is circulating in Congress, backed by the American Israel Public Affairs Committee, that would punish oil traders and transporters that sell refined gasoline to Iran. While the Islamic Republic is one of the world’s leading exporters of crude petroleum, the country lacks the refining capacity to turn an estimated 40% of its crude oil into gasoline. Earlier this year, the country saw gas riots after President Ahmadinejad tried to impose gasoline rationing.
Supposedly we could get some international support for this plan, and it looks like Germany is on board. (Good, none of those vast German oil reserves will be headed to Tehran!) It is one of Iran’s weakest spots, and it might give us leverage over their nuclear program if we exploit it. And if they get really persnickety, things could start happening at their few fragile refineries.
How would Iran respond?
Mr. Kirk said that he anticipated the Iranians might respond to his plan by cutting off all petroleum production in protest. “The mullahs have said if you quarantine gasoline sales, they will suspend the sale of oil, but then the Iranian economy implodes even more quickly,” Mr. Kirk said. “The markets would look then to the swing producers, particularly Saudi Arabia, to see if they would make up the difference. I think a lot of countries would make up the difference. Remember there is no love lost between the Arab kingdoms and Iran.”
The Sun suggests that the price of oil would go up even more as a result of Iran’s retaliation. But wouldn’t that be mitigated by lower gasoline prices? Since the world’s refineries could no longer sell gasoline to Iran, it would effectively increase the available supply worldwide and therefore drop the price. Right?
It is an interesting idea and I like to see innovative solutions being proposed, especially peaceful ones. That said, are some flaws in the plan:
I. Sanctions don’t really work all that well against autocracies. (Sanctions helped pressure South Africa to remove apartheid, which though abominably segregated was susceptible to pressure from its white citizens.) There’s a legitimate use for sanctions in international policy–they work to impoverish and cripple adversaries and keep them from getting too powerful–and a moral case can be built for them as well. But they didn’t knock Saddam out of power, and they haven’t brought Castro or Kim Jong Il low.
In countries like those, the leaders are a little more comfortable saying to protesters “Oh, you want gasoline? Here, have some napalm.” Iran’s government is brutal and they have pretty well insulated themselves from the power of protest. The mullahs would increase their power domestically by rationing gasoline out and make a tidy profit. They control the means of distribution.
II. Speaking of Saddam: remember the U.N. Sanctions against Iraq, and how they were killing three bajillion Iraqi children a day? Creeps like George Galloway and their media enablers would be only too happy to stir up opinion against the evil U.S. policy of blockading Iran, and look at the children starving because there is not enough fuel to start the tractors and plow the fields, yadda, yadda…
…at which point humanitarian relief is proposed, and a trickle of gasoline (just to power ambulances, combines, and school buses, mind you, never anything military, perish the thought) is allowed through. If that sounds familiar, that’s exactly what happened with Oil for Food (except that was oil exports instead of gas imports; the sales were supposed to go to humanitarian aid). Saddam began using his allowances of relief oil exports to buy influence around the globe. What guarantee do we have that this won’t turn into Oil-for-Food II: Petrol for Plutonium?
This isn’t a serious objection to the plan as it stands, but it is possibility I’d like to know is being guarded against.
III. There are ways around a sales embargo or even a blockade. Who’s going to police this? Again, Oil-for-Food shows how difficult it is to keep sanctions working effectively. Even if there weren’t a U.N. Bureaucracy to corrupt, what makes us think that, some oilman in the Emirates or some Gazprom heavy or a TotalFinaElf suit isn’t going to try to sneak them some go-juice for a tidy profit? You just raised their incentives to do so. It could end up enriching criminals as well as the mullahs.
I don’t see this working at all without the U.S. Navy enforcing a blockade–which is not part of the plan–and that could get ugly real quick.
IV. I’m afraid this is a fairy-tale substitute for a real plan to change the situation in Iran. It probably won’t hurt things, but it distracts us from actually changing the regime, breaking their sponsorship of worldwide terrorism and ending their nuclear nightmare.
It makes a hell of a lot more sense than subsidizing a nuclear program for Saudi Arabia, but I put this proposal in the same category with the much-vaunted idea of working with domestic opposition groups who will magically overthrow the government some day. (Yeah, engineer a coup. That always works out well for us.) Each may be a useful instrument of policy, but we are deluding ourselves if we think this will clamp the brakes on the mullahs.
As I said last year, in response to the Burmese repression, Iran’s grip is too strong, and their Orwell Machines are too good:
I’m sure the opposition activists are extremely brave, and extremely smart. They may even be well-trained. They will be invaluable in providing intelligence and other support to our efforts to de-fang the mullahs and harass them behind their lines. I wish them well and long-term success, and I believe we may see a democratic Iran in my lifetime. But if the activists start something in Iran today or tomorrow, they’re as doomed as these Burmese monks were.
Burma’s atrocities affect us very little. On the other hand, our own security is at stake as long as the Islamic Republic’s centrifuges turn. We could trust a Bay-of-Pigs type coup attempt to stop them, or we can make sure the job is done right and that Iran’s nuclear program, along with its gasoline refinery, its navy, and its air force are disassembled. And at the same time, just as importantly, the Islamic Republic’s Orwell Machine must be smashed. …
Only then will democracy activists in Iran have any chance to gain a foothold. Even then I’m not optimistic, because of the anti-U.S. resentment that will accompany an attack, but they’re going to have a lot more success in getting their word out while the Pasdaran are busy digging themselves out of their smoldering bunkers.
In other words I no longer see regime change in Iran as a realistic short-term goal. I see regime crippling in Iran as a crucial short-term goal, as a result of which regime change might occur over the long term. But it seems clear to me that regime change can’t happen while the Orwell machine still hums in Tehran.
So: embargo their gas if you think it will buy us time, or weaken Iran’s military. But don’t pretend that this is a policy which, by itself, will make us any safer.
______________________
{Post by See-Dub.}
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I think Bush has become so discombobulated on Iran that it will be up to the Israelis to do the job (that we should have done in 2003 instead of Iraq-but that is hindsight, and that is worth only so much).
That’s Newt’s solution to Iran, take out their refineries and block the oil from getting in. Iran would turn into Icrawl to Istopdeadinmytracks.
Crude Oil and Total Petroleum Imports Top 15 Countries
Crude Oil Imports (Top 15 Countries) (Thousand Barrels per Day)
CANADA 1,825
SAUDI ARABIA 1,325
MEXICO 1,475
NIGERIA 1,156
VENEZUELA 1,033
IRAQ 464
ANGOLA 570
ALGERIA 484
ECUADOR 214
KUWAIT 208
BRAZIL 174
COLOMBIA 107
RUSSIA 92
CONGO (BRAZZAVILLE) 58
CHAD 74
… don’t see Iran on that list. Bring it on.
This comment probably belongs in the Bolton re: Obama’s plan post but I couldn’t pass up the goodness regarding the plan for Iran.
Listen here for a classic 7-minute schooling of Seattle’s Dave Ross by the ’stache formerly known as Bolton.
It is the best example I’ve heard that so clearly depicts Dave’s naive (and often smug) world view in the clear light of reality.
It’s like listening to a kind, wise grandfather patiently explain things to a teenager. Pure gold.
wise_man, it will take away from the global supply. Saudi can produce another 2 mbd, which is about what Iran exports but then we’re producing at max capability.
I believe Japan is also the biggest buyer of Irans oil.
#1
Israel just doesn’t have the number of long range F-15I and F-16I attack fighters to neutralize Iran’s air defenses and attack scattered and hardened targets, plus they’d have to overfly a least one Arab country to reach Iran.
I still think they should go for it, however. They should be able to do some damage, and the odds are good Iran would over-react, throwing missiles, possibly with chemical weapons, into Saudi Arabia, the Gulf states or Israel. Or, maybe attack Gulf shipping.
That might force the US in, and between the US Air Force based in Diego Garcia and Guam, Navy carrier planes, and cruise missiles, we could knock Iran’s nuclear ambitions way back.
Of course, that would take weeks, and oil prices would really spike, but the problem would be solved.
If Bush moved against Iran now, I suspect the Democrat congress would vote out concurrent resolutions ordering an immediate halt to operations, as part of the powers they granted themselves under the 1970s ‘War Powers Act’.
But if Bush was reacting to Iranian attacks following an Israeli strike, I doubt the Senate would vote for such a resolution.
To ad to #7
If Congress doesn’t vote out concurrent resolutions ordering an end to hostilities, Bush would have sixty days to do what needs to be done before Congress would have to either approve action, grant an additonal time period of thirty days, or order an end to hostilities, IIRC.
Iran is an exporter of crude oil and, ironcially, an importer of gasoline, lacking internal refining capacity.
An effective blockade would have to prevent oil gettin out, not in, and dry up Iran’s fuel supply.
The Israelis will take out the Iranian nuke program from within, not with an air strike.
We have contracts, right? Or is the daily flow of oil sold to different countries every day? Who gets the top 10 percentages of Irans oil? (france?) These countries will be hurting the most.
Semi-unrelated, on a party line vote, House subcomittee votes for higher oil prices by blocking additional offshore exploration.
Add to #12
Obey doesn’t believe in the laws of supply and demand, apparently.
If you block all of their oil going out, then this is not as effective and immediate as blocking the sale of gasoline going in. If their oil sales were somehow stopped, they could still import gasoline from whoever refines the oil and sells them the gas. Of course, their lost revenue from selling would also cripple them, slowly, but hey … its all good.
Drill Here, Drill Now, Pay less, bomb the hell out of Iran without worries. (added the last part just for fun.)
Oh, how did I miss that. “Drill Here, Drill Now, Pay Less, bomb the hell out of Iran without Stress
There, that’s better.
Whether or not Iran sells oil to the US, if they did stop exporting, countries/companies that normally purchased their oil would seek alternate sources of oil in the world market, and oil prices here would rise.
I thought Japan received the bulk of it, but France is a good call also. Global supply would determine price, but we would still get our supply I suppose.
Just to set the record clear, I’m not totally opposed to the idea. It’s been mentioned years ago.
Remember, Russia (a vast oil exporter) is friendly with Iran, as are many of the countries on their northern border.
Who’s going to stop Azerbaijan or Turkmenistan from shipping oil into Russia, for resale on the global market?
Sorry, oil is just too valuable to effectively embargo. Too many chiselers who would undercut it, and would be happy to enjoy the profit that the artificially high prices would bring.
As has been said here, the USA imports oil mostly from our pal Hugo Chavez…
There is something poetic about the thought of drowning them in their own oil… can we do it sloooowly?
When it comes to oil, I see an eventual world war over it. When countries hold oil as hostage, use oil to upset economies, develop nuclear weapons, laugh at the results, some country, somewhere, will have had enough and come out “swinging”. Then everyone will take sides and the shooting will begin.
Ed, do you think the Iranians would just sit back and accept an unprovoked attack on their country? Somehow i doubt they would…that doesn’t bode well for our troops next door or our friends in the region.
#22
I’d hope we’d have intelligence from one source or the other, as the Iranian run Sadrist militias would go on the warpath.
But Iran must be stopped from getting nukes, or the world becomes a really unsafe place to live in.
Interesting premise…..won’t work
Scooter36 re: Ed, do you think the Iranians would just sit back and accept an unprovoked attack on their country?”
Unprovoked??
Well I suppose that if they got pissed they could provoke MORE terrorism… but really, their whole stance is based on the premise that we won’t use force.
That worked out real good for Sadam, now didn’t it?
Unprovoked? ROFLMAO. It’s a long read but if you read it, you’ll understand how funny “unprovoked” is.
The world is already unsafe Ed, I just don’t like the idea of repeating our mistakes with Iran like we did in Iraq, with the results being even worse.
I think we have more of an AIPAC problem and a neoconservative problem than an Iranian problem.
We don’t have to step foot in Iran, Scooter36.
“I just don’t like the idea of repeating our mistakes with Iran like we did in Iraq“.
Je vous accuse publiquement en tant qu’ennemi des personnes !
And no smiley face for you!
Occam’s Razor.
Iran knows it is their weak point and they just announced they are building 7 new refineries to meet their demand.
News report on refinery construction.
Japan bombed Pearl Harbor because America would not sale them oil. I’mamadjacket said America,(The Great Satan), will not exist soon.
The State Department has allowed millions of Muslims into this country, along with Homeland Security allowing millions of who knows what cross the southern border.
Have I told you nice folks to square away your H-harness, polish your boots, clean your weapon, square away your BDU’s, and get a bloody hair cut lately?
BTW, if Iran’s prime targets are turned to rock piles, there will be blow back.
It’s really nice (okay not so nice) to know that we cannot do a damn thing about Iran. They’ll continue to make threats, build up their nuclear arsenal with the submissive compliance of the liberals, while the US sits back, “hoping” that Iran is mere bluster and not action.
Iran, in their own unique way, are leveraging the oil market to ungodly amounts because their sabre rattling provokes fear in the Saudis and general insecurity in the region. Not to mention the tankers of oil they’re holding off their coast (what’s that all about?). What are we doing to support pro-Democracy groups in Iran? The real power in Iran are the mullahs, not Ahmadinnaroll. We need to build up these groups and exploit them.
While we’re at it, Hamas/Hezbollah need to be dealt with. A lot of the insecurity can be blamed on these two groups, pushed by Syria and Iran, and meddling in places like Lebanon who just want a shot at peace and Democracy.
Do the liberals know what’s at stake here? Or would they rather turn their heads and cough while sputtering, “not my problem?”
It will be our problem if Iran starts to decide who lives and dies with their nuclear weapons in the region. You think oil prices are high now… just wait for what happens when a nuclear enabled Iran decides it’s time to test the US some more by annihilating Israel.
Yeah, that will really help oil prices.
I doubt this would work as Ahmenhijad would just call up his good buddy Hugo to come set up a bunch of Citgo gas stations in Iran.
Great plan, but won’t work!!! We don’t get oil from IRAN, but FRANCE and JAPAN do. IRAN stops selling to them, where do they get OIL??? From our supply, which we don’t have to spare (outlawed drilling all over our great LAND). See, actions do have CONSEQUENCES…
I say we stick the Nimitz and, what’s that, the 5th fleet? off of Iran’s coast, stop all gasoline, war materiel (i.e. those .50 cal Steyr sniper rifles Iran bought a couple years ago that “accidentally” ended up in Iraq), and yes, even food from going in. If that doesn’t do the trick, do some target practice on their oil refineries, military bases, and power plants.
If “the people” suffer, that’s no excuse: it’s the same as saying you’re punishing the children of illegal immigrants for sending their parents back home; it’s the parent’s fault for breaking the law.
One final thing: those who would trade their security (not having insane Iranian mullahs with nukes) for a little bit of comfort (slightly lower gas prices - which in any case should be remedied by eliminating US restrictions on nuke power plants, refineries, and drilling) deserve neither.
I find it interesting that the recent verbal exchange between Israel and Iran (which was exagerated and misrepresented by the MSM)SUPPOSEDLY caused oil prices to spike after they had steadily fallen by 7% (a convenient coincidence for OPEC nations, eh?), even though crude oil from Iran is banned in the United States. Therefore, their threat to cut off all production should not effect our gasoline prices in the slightest…at least in a rational universe.