by Justin Pavoni
July 15, 2014
Why does everyone care so much about the Middle East? The answer is obvious: it’s all about the oil. Do you really think the United States would give a damn about Iran, Iraq, Saudi Arabia, Egypt, or Libya if they didn’t control so much of the world’s master resource? Not a chance. Seen in this light it’s easy to dismiss the propaganda about American intervention in the region.
War for American freedom? Nope.
War for Iraqi freedom? Nope.
War against terrorism? Nope.
War against WMD? Nope.
Oil? You bet.
War is fought for one reason and one reason only: money. The rest is just a means to manufacture consent on the part of an otherwise peaceful population. Oil, a.k.a. “black gold” is money in more than one way.
First, the availability of cheap excess energy translates directly to economic growth. The largest sources of cheap energy are the conventional elephant fields of the Middle East. Of these, the Ghawar field in eastern Saudi Arabia is the world’s largest. To make a long story short, you can’t manufacture cheap goods without relatively cheap energy. You can’t transport them without cheap oil. Those who control the world’s energy resources have a serious competitive advantage in the world economy.
Second, there’s more at stake than easy access to the world’s supplies of cheap energy. There’s the “petrodollar,” i.e. the methodology by which you must pay for the oil is as important, perhaps more important, than the oil itself. A quick history on the subject is valuable. In 1971 the United States under President Nixon defaulted on its international promise to redeem dollars for gold according to the Bretton Woods monetary agreement of 1944. Justifiably, there was a run on the dollar and it began to rapidly lose its purchasing power. To save the newly fiat currency, the United States (President Nixon and then Secretary of State Henry Kissinger) agreed to defend the Kingdom of Saudi Arabia so long as the Saudis agreed to settle oil contracts exclusively in dollars. The Saudis would reinvest their excess dollars in United States treasury bonds and the Americans would support the corrupt Saudi Regime. All other nations suddenly needed dollars to pay for oil. Defending this arrangement is one of the principal causes of all of the evil that has happened in the region since then.