By imposing sanctions that aim to throttle Iran's oil industry and exports, the United States and Europe have embarked on a course of action that is likely to backfire on the West and the immediate region.
Oil as a political weapon was last used by oil producing countries in the 1973 Yom Kippur war. With Washington supporting Tel Aviv, the Organisation of the Petroleum Exporting Countries (OPEC) retaliated by imposing an oil embargo on the West to get Israel to back off. This embargo, in turn, had a lasting impact on both oil prices and global inflation.
Saudi Arabia included India in the embargo list because Israel had a consulate in Mumbai, and ordered a halt to oil loadings for India. As the Government of India's petroleum advisor for the Gulf, I was asked to rush to Riyadh from Tehran; I met the oil company executive in charge of exports, explained our position on Israel, persuaded them, in consultation with Jeddah, to lift the embargo, load the two ships nominated by Indian Oil and remove our name from the list of “West.” I was then asked to go to all the Gulf capitals to explain our policy on Israel and Palestine so that nobody else would be tempted to embargo oil shipments to India. Since then, India's stake in the Gulf Cooperation Council (GCC) has expanded exponentially, in terms of oil imports, human resource exports and remittances. So has India's vulnerability to any conflict in the Gulf.
After 1973
After the 1973 episode, the OPEC group has, under the influence of Saudi Arabia, never used oil to influence political policy. OPEC Arab members know that if they stop or severely regulate oil supplies to the West, they could influence American policy on Palestine. The U.S. is also acutely aware of this possibility (as well as the dangers of OPEC unexpectedly falling under the political sway of Russia and China) and hence the repeated military interventions by the U.S. and its allies in oil producing countries. In 2009, when Israel was constantly attacking the Gaza strip, the Saudis were asked to use their oil strength to get Israel to stop the attacks. The Saudi Foreign Minister responded by saying that “oil is not a weapon. You cannot reverse a conflict by using oil.” It was almost a repetition of what the then Saudi foreign policy advisor said in 2002 that “oil is … not a tank.”
Linda Heard, a specialist on Middle East, has noted that “indeed, there seems to be a general consensus among Arab oil producers that as guardians of much of the world's supplies, they have an ethical responsibility not to use oil as a tool of manipulation.”
But this is not just an ethical issue. Any disruption of oil supplies from the Gulf, whether as a result of conscious OPEC policy decision or due to closure of the Strait of Hormuz, will create untold problems not only for Western economies and the Gulf's oil suppliers but also for oil importing developing countries like India. It is sad that the international community, fed by western propaganda, is looking at the Iran crisis as a bilateral issue of controlling Iran's nuclear ambitions, rather than at the larger consequences of the use of oil as a political weapon for the region and world. It is sadder that India has been sucked into thinking along similar lines and is worrying about how to pay for the crude it buys from Iran — some 10 per cent of our import requirement — without falling foul of Western sanctions, instead of opposing the West's use of oil as a political weapon.
What is required today is to stop the implementation of sanction measures the European Union (EU) has rashly announced but not fully implemented. The sanctions have provoked equally unreasonable threats by Iran to suspend exports or close the Strait of Hormuz, to raise the price of oil or to have a scorched earth policy for some Gulf oil fields. These threats, in turn, are being disingenuously touted as justification by the Israelis for military intervention. There are, of course, wise people on both sides who can be depended upon not to carry out such threats. But oil sanctions have raised the temperature so much that a conflict by miscalculation has become a major threat.
A diplomatic initiative by India, China and Russia is needed to lower the temperature, persuade the EU and the U.S. to freeze and then slowly withdraw the use of oil sanctions while getting Iran and Israel to back off on all their threats. Disengaging the weapon of oil from the dialogue required to deal with Iran's nuclear issue is the need of the hour.
There are ways to find an acceptable solution to the nuclear issue. It could involve widening the geographical scope of the negotiating group to include Iran's major neighbours, dealing with the perceived security threat to Iran, refashioning the approach to non-proliferation and dealing with the emerging political puzzle in West Asia. But using the oil weapon against Iran is not one of them.
(The author is former Special Envoy of the U.N. Secretary General for Iraq and was India's Permanent representative to the U.N.)
