Why Doesn’t Anything Make Sense Anymore?

Often, we tend to forget that oil supply, and hence oil prices, are heavily influenced by cartels and political pressures as much (if not more so) than they are by the whims of commodity markets. The recent dip (or crash, depending on your degree of sensationalism) in oil prices seems to be an excellent example of the interconnectedness of global politics and economics, as well as the complexity of the political situation in the early 21st-century. It seems increasingly clear that the us vs. them mentality that got us through World War II and the Cold War no longer suffices, and that the survival of any one nation on the global arena depends on its ability to navigate the increasingly complex network of relations being built.

The consensus view on the recent oil price shock seems to be that it’s primarily the cause of Saudi Arabian manipulation. Specifically, the aim of this manipulation seems to be two-fold. Firstly, it is an attempt to control the effects of the shale oil boom that North Dakota is currently undergoing. It’s fundamentally a question of price elasticity of supply- Saudi Arabia knows that it has more than enough oil such that a downward shift in price will not hugely impact its coffers. The amount of extant shale oil, however, is much lower, and a price shift could affect not only shale oil revenue, but also investment in the booming shale oil industry. This apparent Saudi hostility to US interests is not new- the relationship between the Saudis and the US has always been a rather vitriolic alliance of convenience, at best; simmering hostility at worst.

The second goal of this price manipulations seems to be targeted toward Russia and Iran who, as large oil producers, effectively depend of oil revenues for balanced budgets and (broadly) functioning economies. Russia and Iran’s fingers in Syria, specifically their support for the regime of Bashar al-Assad, are a threat to the Saudi’s regional dominance, and weakening these two states may well serve as a decisive shift in the conflict. This move, coming several months into a Western effort to stop the spread of ISIS, also lends some credence toward the “the Saudis are totally funding ISIS,” which has as yet gone “unproven.”

It’s fairly clear that the aim of the Saudis is a bipartite destabilization- finding the one political move they can make which would help to weaken both their neighbors to the North and their frienemies to the West. I have long been a critic of Saudi foreign policy- they have historically shown themselves to be far too willing to shake with one hand and backstab with the other. As such, the only sensible course of action given the Saudi’s latest move is to ensure that their plan backfires. Otherwise, the terrorists, quite literally, win.

The perennially unstable three-bloc system that pits the West against Russia-China-Iran against the Sunnis Middle East is inefficient, given that two of these blocs depend on the other for their energy needs, their budgetary health and their economic competitiveness. Similarly, although the Western bloc and the Russian bloc may differ in ideology, neither bloc would be opposed to a serious reigning-in of Islamic fervor around the world. Finally, while the current set up does not provide a sufficient bulwark against the rising tide of Islamism, the combined might of four of the world’s military forces might just do the job.

The problem here is that we’ve already gone down the rabbit hole far enough that the only way out, even if temporarily, is ratcheting up brinksmanship. I am fully aware that the suggestion I gave in the above paragraph is no solution at all. Fortunately, there is a genuine solution to this issue that is technically possible- to relegate energy policy to an independent, non-sovereign, international body- much as was attempted with capital policy as a result of Bretton Woods. Unfortunately, this solution is unlikely to be enacted until we’ve gone too far- human beings have a sad tendency not to see the writing on the wall. Even more unfortunately, this solution is far from perfect- nothing says “potential corruption” like “independent international body.”

Regardless of where we end up, it’s clear that “us vs them” is dead, buried and consummately rotting.


A Knife’s Edge Perched on a Tightrope

Apparently, the inevitable has happened: according to this poorly spell-checked article, ISIS have started attacking targets within Iran. If these allegations are indeed true, then we’re poised to enter a new, even more terrifying stage of this conflict.

Iran’s Shiite-dominated government is a natural enemy of ISIS, and Iran, as a relative regional military and economic superpower with an unflinching hostility toward jihadi groups, is the safest bet toward a sustained repellent against ISIS. Although it would be jumping the gun to say that other regional powers such as Saudi Arabia or Qatar are directly aiding ISIS as many claim, certainly, their lack of direct action speaks to the fact that providing resistance to ISIS is not their first priority. As such, Iran is desperately needed as an ally in the fight against the jihadi group.

But, like everything else in the Middle East, the situation is not so simple. Firstly, the Middle Eastern tendency toward conspiratorial thinking, especially with regard to ISIS and the West vs Islam narrative, will spread a great deal of misinformation about the nature of the conflict. This misinformation could lead to misguided, poorly informed action against ISIS, which will certainly not be helped by the decentralized and secretive nature of ISIS itself. In such a mercurial conflict, proper information is key.

Secondly, the fact that the Iranian government is dominated by Shiites does not guarantee stability or unity of purpose. A hefty minority of Iranians- about 8%, according to estimates, are Sunni, and these Sunnis often belong to groups that have been marginalized and abused by the Iranian regime in the thirty-some years since the current regime took power. These groups could use any excuse to help the enemies of the Iranian regime destabilize the nation. The article cited in the first paragraph gives the example of a guard post on the border which was effectively capitulated to jihadis without a fight.

Thirdly, the legitimacy of the Iranian government within the eyes of the Iranian public is shaky, at best. Vast swaths of the working classes in Iran distrust the government for its inability to offer them economic opportunities; equally vast swaths in the middle and upper classes distrust the government for its dictatorial and non-democratic nature. This distrust could lead to two consequences- the first, an internal crackdown against dissidents which could rehash the worst excesses of Ayatollah Khomeini’s regime in the 1980s; the second, an unwillingness on the part of Iran’s largely volunteer army to fight for a regime they don’t believe in. Obviously, none of these factors will help construct the broad anti-ISIS front many throughout the Middle East and the West are looking for.

Yes, Iran could play a role in preventing ISIS’s influence from growing. But it has to negotiate a knife’s edge perched on a tightrope in order to do so. Stay tuned, folks.