There is nothing like a sudden decline in available oil supplies to bring
out forgiveness in what is dubbed in and around Washington, D.C. as "The
Blob." This term refers to an amorphous, but powerful group of
think-alike U.S. foreign policy actors both inside and outside of
government who have influenced every U.S. administration since the end of
World War II. The main tenet of The Blob is that America knows best how to
lead the world and it must do so.
The Blob seriously penalizes those whom it regards as a threat to
American power and security. The Blob likes to use words such
as "rogue"
and "pariah"
to describe those countries which get on its wrong side. (Many are
admittedly run by truly odious regimes.) To get a sense of who has
violated The Blob's sensibilities, one needs only to glance at the U.S.
Department of Treasury website page entitled "Sanctions
Programs and Country Information." On it you will find The Blob's
who's who of rogue and pariah states.
With the abrupt drop in oil supplies from Russia in the wake of the
Ukraine/Russia conflict, the list of rogue and pariah states is about to
get shorter as the necessity of obtaining ready oil supplies trumps any
concern about previous challenges to The Blob's narrative.
Venezuela
and Iran, two large oil producers,
are suddenly being courted by the current U.S. administration with an eye
toward increasing world supplies of oil. To be fair, the United States was
trying to revive a deal to prevent nuclear weapons development in Iran
before the Ukraine/Russia conflict began. But a deal has become a more
urgent priority since world oil supplies dropped abruptly at the beginning
of the conflict.
Will all be forgiven or at least overlooked in exchange for ramping up
oil exports? We do not yet know.
The facts about oil suggest an affirmative answer to the question above.
World oil production peaked in November 2018 and has been in decline since
then with a huge drop related to the outbreak of the COVID pandemic. (This
applies to crude oil including lease condensate which is the definition of
oil in world markets.) Production recovered, but was still several million
barrels per day below the 2018 peak when the Ukraine/Russia conflict
began. Russian oil production has almost surely fallen since the war
started as the Russians find fewer and fewer places to sell their crude
and not enough space to store it all.
One very important truth about America's power is rarely mentioned by The Blob in public: That power depends in large part on
access to resources found in other countries. The U.S. Geological Survey
(USGS) lists 17 minerals for which America is 100 percent dependent on
imports. (See page 7 of this
report.) The USGS lists another 32 for which the United States
imports more than 50 percent of its needs. And, contrary to the popular
impression, the United States still
imports a considerable amount of oil (though it exports some of it
again as refined products). More important, American prices for oil are
tied to the world market. Those prices would be affected by the current
shortage whether the country imported oil or not.
All this explains, in part, why getting countries around the world to
accept American leadership is central to The Blob's strategy. The United
States needs those imported minerals and other commodities to remain a
world power. It's true that if the United States can somehow provide
stability to the rest of the world, that's good for those who have such
resources to sell (whether they came to control them legitimately or not).
But it is becoming increasingly difficult for the United States to do
that—especially as it is more and more challenged by China and Russia and
even some smaller countries such as oil-rich Venezuela that believe
American power has limits and that try to expose those limits through
their economic, political and military actions.
Look for The Blob (that is, the American foreign policy establishment) to make more
compromises in order to secure U.S. access to imported commodities
critical to maintaining the country's power. Without those commodities in
sufficient quantities, it will be difficult for the United States to
project power into the world in the way that The Blob wants it to.
P.S. One of the critical chokepoints for the commodities the United States needs for its electronics industry
is China which has an overwhelming share of worldwide production of rare earth elements critical to that industry.
ABOUT THE AUTHOR
Kurt Cobb is a freelance writer and communications consultant who writes frequently about energy and environment. His work has appeared in The Christian Science Monitor, Resilience, Common Dreams, Naked Capitalism, Le Monde Diplomatique, Oilprice.com, OilVoice, TalkMarkets, Investing.com, Business Insider, and many other places. He
is the author of an oil-themed novel entitled Prelude and has a widely followed blog called Resource Insights. He is currently a fellow of the Arthur Morgan Institute for Community Solutions. He can be contacted at kurtcobb2001@yahoo.com.
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