Tuesday, January 24, 2006

Iran is Running Out of Oil

Spengler at Asia Times says that the reason Iran has nuclear ambitions is that it needs the oil of the Arabs because it is running out.

Iran's oil exports will shrink to zero in 20 years, just at the demographic inflection point when the costs of maintaining an aged population will crush its state finances, as I reported in Demographics and Iran's imperial design (September 13, 2005). Just outside Iran's present frontiers lie the oil resources of Iraq, Azerbaijan and Turkmenistan, and not far away are the oil concentrations of eastern Saudi Arabia. Its neighbors are quite as alarmed as Washington about the prospect of a nuclear-armed Iran, and privately quite happy for Washington to wipe out this capability.

It is remarkable how quickly an international consensus has emerged for the eventual use of force against Iran. Chirac's indirect reference to the French nuclear capability was a warning to Tehran.
Yes it is. Spengler goes on to elaborate on the developing world consensus . Egypt and Saudi Arabia are on board with the usual Israel ought to be denuked caveat. Which is strictly pro forma. France is finding her own way to get on the train (as usual) and Germany is behind the US.

The hold outs are Russia - whose resistance so far has been evident but half hearted. China is the major opposition. Why? China is an oil consumer that likes the oil for arms trade with Iran. I expect a China Security Council veto unless China's oil worries are addressed.

Spengler then takes a further look at Iran's motives:
I do not know whether Ahmedinejad is mad or sane, but even mad people may be sly and calculating. Iran's prospects are grim. Over a generation it faces demographic decay, economic collapse and cultural deracination. When reason fails to provide a solution to an inherently insoluble problem, irrationality well may take hold. Like Hitler, who also was mad but out-bluffed the West for years before overreaching, Ahmedinejad is pursuing a rational if loathsome imperial policy.
Down with imperialism I always say.

Spengler addresses the China question:
By far the biggest loser in an Iranian confrontation with the West will be China, the fastest-growing among the world's large economies, but also the least efficient in energy use. Higher oil prices will harm China's economy more than any other, and Beijing's reluctance to back Western efforts to encircle Iran are understandable in this context. It is unclear how China will proceed if the rest of the international community confronts Iran; in the great scheme of things it really does not matter.
Why doesn't it matter? Because there is not a great resivoir of sympathy for China in America. Or Europe. And old unilateralist George is not listening if they do get in the way. He didn't let opposition keep him from Iraq.

Perhaps what China needs is help improving its energy efficiency. I wonder if that will be on offer. It ought to be. Maybe that was what the recent alternative greenhouse gas conference was about in Asia. Secratary Rice was supposed to attend so it was a big deal. Then she cancelled at the last minute. Did China double cross America on the deal? Did Iran offer a better price? We shall see.

Spengler closes with this thought:
Washington will initiate military action against Iran only with extreme reluctance, but it will do so nonetheless, except in the extremely unlikely event that Ahmedinejad were to stand down. Rather than a legacy of prosperity and democracy in the Middle East, the administration of US President George W Bush will exit with an economy weakened by higher oil prices and chaos on the ground in Iraq and elsewhere. But it really has no other options, except to let a nuclear-armed spoiler loose in the oil corridor. We have begun the third act of the tragedy that started on September 11, 2001, and I see no way to prevent it from proceeding.
He has that exactly right.

America will weather the storm. Energy efficiency will rise further. Supply and demand will get balanced. At a price.

Spengler has a nice map of major oil pools in and around Iran so a visit to the article link would be very informative. In addition he goes a bit deeper into the analysis of the current situation. In other words. Read the whole thing.

Another look into China's motivations from Asia Times.

Click on the following link you want to read more Spengler.


Ben USN (Ret) said...

China would do well to heed our advice.
They would lose oil for alot longer if we bomb Iran, than a possible sanction would deprive them of.
I agree, we need to help China with getting energy, in any event, IF they play ball.
If they continue to obstruct, and worse, supply Iran with even more arms, then we shouldn't go out of our way to help them.
I believe China wants a weaker US, and aren't worried about Iran gaining nukes.
China is the last place Iran would ever attack.
There's alot to think about, (diplomacy et al),
but the clock is ticking.

Anonymous said...

Down with imperialism I always say.

Including the brand of imperialism of the United States, the most arrogant, imperialistic nation that has ever existed on the planet? Apparently not....

M. Simon said...

A strange kind of imperialism that insists on conquered nations governing themselves. Including the possibility (and often the reality) of the conquered acting contrary to the interests of the conquerer.