Egypt Oil and Gas Newspaper explores the consequences of a potential U.S. war against Iran. Will occupation once again become a means for a specific end: oil?
“Iraq is just one campaign…the Bush administration is looking at this (the Middle East) as a huge war zone. Next, we’re going to have the Iranian campaign,” Seymour Hersh, a Pentagon consultant, was quoted in January 2005 in the New Yorker. Based on the same pretext of combating terrorism and disarming their weapons of mass destruction through military invasion, this scenario could possibly be repeated in Iran. In fact, the U.S. will not settle for a negotiated resolution of the conflict that has risen over Iran’s nuclear program, because its goal, eventually, is a regime change.
Since the victory of Mahmoud Ahmadinejad in Iran’s presidential election in June 2005, the country has been considered a threat to U.S. interests as the new president’s policies challenge U.S. influence and allies in the region. The American administration claims that the Iranian development of a nuclear program and enrichment of uranium endanger regional security. Saman Sepehri, author of “The Geopolitics of Oil” summarized the real reasons behind the U.S.’s interest in Iran, saying “Iran is central to U.S plans for reshaping the Middle East, as it possesses a combination of energy resources, strategic location, economic potential and political weight.”
In terms of energy capacity, Iran is in control of strategic oil and gas resources; it is classified as the second largest untapped oil reserve in the world, with an approximate amount of 125.8 billion barrels, ranked after Saudi Arabia (260 billion) and ahead of Iraq (115 billion). Iran also has the second largest natural gas reserves counting for 940 trillion cubic feet of gas, approximately 16% of total world reserves, falling slightly behind the world’s largest supplier Russia, with 1,680 trillion cubic feet, according to Oil & Gas Journal.
Unlike Saudi Arabia, the largest oil producer, which is currently producing oil at close to its sustainable rate, Iran is producing only a small share of its oil and gas reserves; about four million barrels of oil per day and 2.7 trillion cubic feet of natural gas per year. This means that over the next 20 years, Iran has a significant potential to double its production compared to Saudi Arabia. Accordingly, Iran is expected to play a critical role in the world’s future of energy with a high probability of dominating regional power in the Persian Gulf, where two-thirds of the world’s oil reserves exist.
Michael T. Klare, professor of peace and world security studies at Hampshire College and the author of Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Oil said that oil is not the “sole driving force.” Iran’s growing ties with America’s competitors in the global energy market, which endangers the status of the U.S. as the main super power controlling the Middle East also motivates a certain intimidation. In February 2000, Iran set a goal of “cooperation among Iran, Russia, India and China to confront the hegemonic policies of America,” and it has implemented this foreign policy with economic, energy and military deals. Early in 2003, a group of three Japanese companies acquired a 20% stake in the development of the Soroush-Nowruz offshore field in the Persian Gulf, a reservoir estimated to hold one billion barrels of oil. One year later, the Iranian Offshore Oil Company granted a $1.26 billion contract to Japan’s JGC Corporation for the revival of natural gas and natural gas liquids from Soroush-Nowruz and other offshore fields.
In October 2004, the Iranian government signed a $100 billion, 25-year contract with Sinopec, a leading Chinese energy firm, for joint development of one of its major gas fields. Also, Russia is currently building Iran’s Bushehr nuclear plant and developing security and defense systems for not only the plant, but for all of Iran’s enrichment facilities. India is also developing long-term energy ties with Iran; in January 2005, the Gas Authority of India Limited (GAIL) signed a 30-year deal worth $50 billion, which includes shipment of LNG in addition to the development of Iranian gas fields.
Iran has further extended its economic bonds with European countries, such as France and Germany; French automakers Renault and Peugeot and Germany’s Mercedes Benz have production lines in Iran, and are planning to expand their operations to not only fulfill Iran’s domestic market, but for exports to Asia, Africa, and Western Europe. These economic ties are considered another threat to the U.S. hegemony in the region as its competitors are cooperating with Iran and gaining more shares and control over Iran’s energy resources and economy, which diminishes U.S. dominance over the region.
Iran has also found a partner in Venezuela to challenge the U.S. Ahmadinejad and his counterpart Hugo Chávez voiced the same themes in their speeches at the UN General Assembly in September saying, “Confronting the U.S. and Great Britain, building the resistance of the poorer Third World nations of the “South” against the imperial North, condemning the special privileges of the permanent members of the Security Council which make them and their close allies immune to international law, reforming the UN to make it egalitarian and not just a tool of imperial powers (like inclusion of permanent members on the Security Council from the Third World).”
According to Sepehri, recently, the U.S has been the conduit for coordination of policies between its Arab allies – Egypt, Saudi Arabia, and Jordan – and its watchdog Israel; but for the time being, new forces have been emerging in the region and gaining more power.
What if the U.S. led a military invasion in Iran? What will the consequences be? In case of any possible military attack, Iran has warned that it will close the Strait of Hormuz and obstruct oil shipping in the Persian Gulf area.  The strait of Hormuz is of great strategic importance, as it is the sole sea passage through which oil from Kuwait, Iraq, Iran, Saudi Arabia, Bahrain, Qatar, as well as most of United Arab Emirates, can be transported. The Iranian Expediency Council Secretary Mohsen Rezai declared, “An attack on Iran will be tantamount to endangering Saudi Arabia, Kuwait, and, in a word, the entire Middle East oil.”
Such a reaction could trigger a “market panic” with oil prices exceeding $100 per barrel. Besides, if the U.S. succeeds to take over the strait, this can be a point of concern for U.S. competitors, especially China. Fifty-six percent of Iran’s oil exports are to Asia and 29% to Europe. Japan and China together buy over one-third of Iran’s oil exports. China is paying particular attention to Iran, according to China Daily, Chinese oil imports from Iran increased by 25% during the first quarter of this year.
The Bush administration realizes that any military attack on Iran will have a global impact. However, this does not negate Iran’s insecurities from the U.S., which surrounds the Persian Gulf area with its troops; two of Iran’s neighboring countries, Iraq and Afghanistan, have been invaded by the U.S. in the past 5 years. Besides, Pakistan and Saudi Arabia have been known to have friendly relations with the U.S. The Iranian administration has succeeded to a great extent in protecting its territory through the various economic and diplomatic ties it has established with many countries as mentioned before, especially with U.S. competitors.
Accusing Iran of developing nuclear weapons under the veil of the peaceful use of nuclear energy could possibly be used by the U.S. to fulfill its ambitions of leading an attack in order to gain control over Iranian oil resources. While in fact, U.S. concerns of losing its hegemony in the Middle East region, being challenged by its competitors like China and its need for oil and gas, are the real reasons behind the current U.S. campaign against Iran.