Complexities Of Using Oil Production As A Tool Of Foreign Policy

Modeling outcomes, “I-do-this-and-then-you-do-that’ and so forth, can be binary (having two parts), a simple straight-forward equation; and can be other than that- meaning having multiple parts, and those parts may sometimes be contradictory and, more consequently, fluid in terms of defining (and predicting) responses.  A then B may result in C- but may also result in a derivative of C that has yet to be defined- or, worse, may not be definable. 

So are the complexities of how oil is a tool for prosperity, yet also a tool of coercion and manipulation.  It’s also a narcotic- and its users can become addicts with the resulting unpredictable (non-binary) behavior traits of addicts. 

The following are some binary equations and not-so-binary equations…     

Increasing oil production in the United States creates employment opportunities. 

Consistent oil prices are good for United States consumers. 

Lower oil prices are good for United States consumers. 

If oil prices become too low and remain too low, there is negative impact upon United States oil producers, particularly those involved in fracking. 

Lower oil prices assist countries with limited or without domestic oil production including China and Republic of Cuba. 

Lower oil prices are challenging for oil-producing countries (OPEC-members, Russia, Iran, Venezuela among others).  Members of the Organization of the Petroleum Exporting Countries (OPEC): Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.  OPEC Observers include Egypt, Mexico, Norway, Oman and Russia among other countries. 

Lower oil prices can stimulate a focus upon inefficiencies in oil-producing countries, particularly within countries where governments lack transparency, accountability and democratic institutions with those governments adapting to survive; they are not suicidal.  They may refocus on the non-oil-dependent sectors of their economies. 

Lower oil prices would lessen revenues for Venezuela, which would complicate the ability for Venezuela to repay loans to China.  Higher oil prices would accelerate the ability of Venezuela to repay China, but higher oil prices negatively impact the economy of China by increasing the cost of an important import.  

Lower oil prices result in fewer resources for oil-producing countries to import products and services; for example, equipment for infrastructure and technology projects, which tend to be costly, and military equipment, which tends to originate in the United States, Russia, Germany, France and China.  The largest importers of military equipment include India, Saudi Arabia, United Arab Emirates, China, Algeria, Pakistan, Iraq and Egypt.   

The United States believes military equipment exports provides sustainable domestic employment opportunities, increases influence for the United States within the commercial, economic and political infrastructure of importers, and lowers the per-unit cost of military equipment for the United States.   

Opposing perspectives include a focus upon the value of lessening the global military architecture, particularly towards countries where a disproportionate percentage of annual budgets to military equipment creates a self-sustaining desire to maintain parity (or advantage) with neighbors- when the countries should be encouraged to direct funds towards infrastructure, technology and education rather than preparation for conflict.  An oft-asked question: Are United States interests best represented by countries where the military has a disproportionate guiding role in the political, economic and social fabric?  Should the most effective means of communicating with a country be through a civilian or a general?    

Countries which focus upon the export of military equipment have an interest in maintaining political uncertainty, not necessarily instability and certainly not chaos, but a global political marketplace whose country leadership (with sometimes disproportionate influence by those who benefit from the procurement, maintenance and operation of military equipment) believe that their country requires more- not particularly equated to a threat assessment, but to the belief that an abundance of military equipment often creates (and maintains) a compliant population.  The United States Congress will generally support an ever-increasing military budget because of the employment opportunities created within states and congressional districts- and with those increased expenditures, seeking export opportunities.  The process may be defined as self-fulfilling.  

Lower oil prices provide increased opportunity for non-oil-producing countries to direct savings to non-military procurement programs such as infrastructure and technology. 

The United States and other considered-democracies often prefer to seek military equipment export opportunities to non-considered democracies due to a believed to be simplified autocratic decision-making process. 

A belief in oil-foundational hegemony (dominance by one over another or over many) has merit (based upon historical precedent, but for the definition of the term to remain static is not without menace; technology, disruptive weather patterns, and realpolitik (politics of practicality rather than “moral or ideological considerations”). 

Higher oil prices can permit oil-producing countries to increase their imports.  However, oil prices need be below a level(s) that will decrease the consumption by importers. 

Higher oil prices can increase revenues of United States-based oil producers, but at the potential expense of United States-based oil consumers.  Oil producers prefer to export product when prices are higher rather than direct production within the United States. 

Higher oil prices can insulate countries considered autocratic or not-ideal democracies to continue behavior deemed detrimental to the interests of democracies.  Venezuela will continue to assist the Republic of Cuba. 

Russia and Saudi Arabia among other oil-producing countries may desire a hobbled Venezuela as a result is reduction and inconsistency of oil in the global marketplace which assists in maintaining higher oil prices. 

The Trump Administration, however, must balance the impact of lessening oil production from Iran, which the Trump Administration supports, with a decrease in global oil production, which may result in higher oil prices.  There is value in an increase in countries contributing oil to the global marketplace- lower and consistent oil prices.   

However, if Venezuela increases its oil production, there could be downward pricing, which would benefit the United States- and allies and foes.  Increasing oil production by Venezuela would also stabilize the Maduro Administration- which would result in the Republic of Cuba continuing to receive financial support from Venezuela. 

If Colombia (and the other bordering countries) were to close its borders with Venezuela, would a result be to lessen the duration of the Maduro Administration?  Yes, because the problems within Venezuela would then remain within the borders of Venezuela.  Similarly, had the Obama Administration led a coalition that included Jordan, Iraq, Israel, Lebanon and Turkey to close their respective borders soon after the initial violence in Syria, the multi-year, multi-billion-dollar tragedy that has infiltrated the European Continent may have been mitigated. 

The closure of borders is painful for those who are trapped, but shorter-term pain is preferred to longer-term, or generational mismanagement of providing opportunities to a population.