Misperceiving U.S. Foreign Policy in the Gulf: Raising the Hidden Costs of U.S. Dependence on Oil

United States foreign policy in the Middle East over the last few decades has been controversial and checkered, and Washington has certainly flexed its muscles in the region. However, the question arises as to how aggressive America has been with regard to oil in the region.

I distinguish between two perspectives in how America is viewed, which we can simply call the offensive and defensive perspectives, recognizing that there is a continuum of views. From the offensive perspective, America is viewed as having one or more of these goals: steal or own Middle East oil; control Middle East oil in order to undermine Muslims; dominate Middle East oil to advance global hegemony; or exercise “puppet” control over oil producers like Saudi Arabia to coerce them into charging far lower oil prices than markets would warrant.¹ By contrast, from the defensive perspective, America chiefly aims to prevent others from threatening oil supplies in a manner that would spike global oil prices and possibly cause a recession or depression.

Muslim opinion polls have revealed that oil issues are a broader source of tension in relations between elements of the Muslim world and the West. The U.S. role in oil-related issues feeds into historical, political, and religious perspectives of an imperialist and power-hungry America. In fact, a not uncommon view in the Middle East is that America seeks to exploit, even steal the region’s oil resources, a viewpoint much in line with the offensive perspective described above.

I argue that the history of America’s role in the region suggests that this is largely a misconception, and that this misconception is not immaterial. It seriously raises the cost of the use of oil and of American regional intervention. This misconception not only stokes terrorism and anti-Americanism, but also complicates America’s relations with Middle Eastern countries, affects its image among Muslims, and hurts its global leverage insofar as such views become internationally prominent. Indeed, it is almost a maxim in many capitals in the Middle East that close cooperation with Washington carries a domestic political cost. Recall, for example, that the Saudis were initially reluctant to host American forces after Iraq invaded Kuwait on August 2, 1990, even though they felt seriously threatened by Saddam Hussein.

The Misconception in Play

When U.S.-led forces went to Kuwait in 1991 to counter Iraq’s invasion and to protect global oil supplies, many around the world applauded the effort, as did many Muslims in the Middle East. But al-Qaeda’s leaders viewed the same action through an entirely different prism. I argue that they saw it as the West’s effort to dominate and humiliate Muslims, to continue a crusader movement in the land of Mecca and Medina, and ultimately to steal oil and suppress the Muslim world. They saw it through an extreme and distorted religious-political prism, which did not allow for any nuance or even broad-brush recognitions of complex reality. Al-Qaeda’s reaction was driven less by the actions of the United States and its allies than by the screen, or filter, through which its leaders saw American actions in the region. In fact, it has seen whatever the United States has done in the Middle East as an effort to control the region and its peoples in the form of an old imperialistic empire.

Their impression that America is seeking to exploit Middle Eastern oil resources directly feeds into the notion that America is seeking to dominate local populations. This perspective has not been limited to jihadi radicals in al-Qaeda central, its affiliates, and leaders of the Islamic State, but has broader cachet, which makes it quite important to understand. As I discuss below, it has also resonated in lesser doses among many in the Muslim world, and even among quarters outside it, making this notion particularly dangerous for American interests.²
Terrorists, 9/11, and the Islamic State

For his part, Osama bin Laden asserted in an interview in 1998 that the Muslim world and Islam are under assault, noting that others “...rob us of our wealth and of our resources and of our oil. Our religion is under attack.”³ This distorted view of oil-stealing Americans has remained fairly constant in statements by al-Qaeda and its affiliates.⁴ To al-Qaeda’s leaders, America and its allies not only trespassed on sacred lands, but also stole its resources. In his November 2001 statement of responsibility for the 9/11 attacks, bin Laden justified the attack by saying that the Twin Towers were “full of supporters of American economical power which is exploiting the world.” He repeatedly claimed that Americans have been stealing and exploiting Arab oil.⁵

After major domestic attacks in Saudi Arabia in the summer of 2004, a group connected to, or part of, al-Qaeda released a statement indicating that it would target Americans involved in Saudi oil because America wanted to steal oil for the West. In an audio recording, the al-Qaeda affiliate responsible for the domestic attacks blamed the Saudi government for providing “America with oil at the cheapest prices according to their masters’ wish, so that their economy does not collapse.”⁶

The Case of the 2003 Iraq War
The U.S.-led invasion of Iraq represents America’s most invasive action in the Persian Gulf, and therefore presents a good test case for evaluating what motivated this misadventure. While protecting oil supplies and preventing Iraq from controlling more oil was certainly the central motivation for America’s actions in the 1990-91 Gulf crisis, oil was not a central motivator in the 2003 invasion, much less any notion of stealing oil.⁷

Why did the U.S.-led coalition invade Iraq?
We can only offer educated guesses at this stage, given the myriad documents from the time period around the invasion remain classified, but a portrait of decision-making does emerge from the available sources. In addition to instances of mistaken intelligence and probable manipulation of intelligence by the administration, the following reasons appear central to U.S. decision-making.⁸

First, the United States was concerned about Iraq’s long record of defiance and its perceived weapons of mass destruction (WMD) programs. Washington stressed that Iraq had defied sixteen United Nations resolutions passed between 1991 and 2002, starting with United Nations Security Council Resolution 687, which mandated the full disclosure of all of Iraq’s WMD. The United States argued that this track record was unacceptable, threatened regional security, and challenged the credibility of the United Nations.

On 14 August 2002, National Security Adviser Condoleezza Rice chaired a meeting that laid out U.S. goals in Iraq in a draft of a presidential directive titled “Iraq: Goals, Objectives, and Strategy.”⁹ President Bush signed the directive, making it official policy, on 29 August. The document emphasized Washington’s desire to overthrow Saddam Hussein’s regime in order to eliminate its WMD, to end its threat to the region, and to create democracy in Iraq. In June 2001, the CIA reported that although the evidence was not fully clear, it appeared that Iraq had used the period between 1998 and 2001 to rebuild prohibited WMD programs. In October 2002, a special national intelligence estimate more clearly articulated those accusations, asserting that if left unchecked, Iraq “probably will have a nuclear weapon during this decade.”¹⁰

President Bush warned that if the Iraqi regime were “...able to produce, buy, or steal an amount of highly enriched uranium a little larger than a single softball, it could have a nuclear weapon in less than a year.”¹¹ In September 2002, he cited a British intelligence report indicating that Iraq could launch a chemical or biological attack within forty-five minutes, if the order was given to do so.¹² The administration also described Iraq as capable of using WMD against the United States, a position that was not shared by the intelligence analysts who wrote the October 2002 national intelligence estimate.¹³

Washington pushed hard to pass a seventeenth resolution, number 1441, against Iraq on 8 November 2002. This resolution required Baghdad to admit UN inspectors and to comply fully with all foregoing UN resolutions. Resolution 1441, which was passed unanimously by the UN Security Council, held that Iraq “has been and remains in material breach” of its obligations under previous UN resolutions. It gave Iraq thirty days to declare its WMD to the UN Security Council, and underscored that false statements would constitute a further “material breach,” for which Iraq could face serious consequences. When Iraq, in the view of the United States and Britain, failed to comply with Resolution 1441, they drafted an eighteenth resolution against Iraq, which, in essence, called for war.¹⁴

Second, Washington appeared to be concerned about Iraq’s purported ties to terrorism, even if it trumped up that charge.¹⁵ The terrorist link was dubious even at the outset, partly because secular Arab leaders and Islamic radicals were historically adversaries, but it was Saddam’s misfortune that Iraq represented precisely what the Bush administration feared after 9/11: a dictator developing WMD with connections to terrorist groups.¹⁶ Especially after 9/11, the administration felt it could not tolerate WMD in a dictator’s hands, particularly one with Saddam’s record of aggression.¹⁷ The Bush doctrine of preemption was articulated in the State of the Union address on 29 January 2002, and then formally outlined in the National Security Strategy of September 2002.¹⁸ It was based partly on the notion that deterrence and containment may not succeed, and it emphasized the need to resort in appropriate cases to preemptive measures.¹⁹

When, in the hours following the attacks on New York and Washington, Secretary of Defense Donald Rumsfeld was advised that al-Qaeda may well have been responsible, he reportedly asked for existing military plans for an invasion of Iraq.²⁰ In the months following 9/11, President Bush also asked for contingency plans to attack if Iraq were shown that it was involved in the 9/11 attacks or sought to exploit the crisis for its own gain.²¹ Bush made it known early on that he thought Iraq was involved in 9/11, and he continued to reiterate the belief that Iraq had had long-standing ties to terrorist groups that were capable of and willing to deliver weapons of mass death.²²

Third, the administration hoped to democratize Iraq. On the evening of 11 September 2001, well before the U.S. decision to go to war in Iraq, Bush reassured the nation that the United States “would go forward to defend freedom and all that is good and just in our world.”²³ He repeated that mantra of democratization before the invasion of Iraq, and after it.²⁴

Fourth, it is possible that the administration sought to demonstrate American power in the post-Cold War world. Successfully invading Iraq and eliminating Saddam Hussein could do so, while also sending a signal of American prowess to other autocrats in the region, such as the mullahs of Iran.

Fifth, we cannot underestimate the role played by the cognitive bias of over-confidence. Clearly, the administration believed that the outcome would be far more positive.²⁵ As it turned out, no weapons of mass destruction were found, nor did it appear that Saddam Hussein had any serious ties to al-Qaeda.

The administration grossly misestimated the challenges of rebuilding Iraq and the potential for a serious insurgency. Such problems should not have come as a great surprise. The U.S. State Department in particular warned of post-invasion troubles.²⁶ The British, of course, had suffered a poor fate in Iraq earlier in the twentieth century, and the administration of president George H.W. Bush decided against invading Iraq partly out of concern of getting stuck in a quagmire.

Sixth, it also could not have been lost on Washington that stabilizing Iraq would have yielded more oil for the global economy. Saddam’s oil exports were limited by UN sanctions due to his invasion of Kuwait and subsequent non-cooperation with UN inspectors. A more stable and productive Iraq could also help lower U.S. reliance on Saudi Arabia, which was perceived after 9/11 to be potentially unstable given that 15 of the 19 hijackers were Saudis.²⁷ But these alleged oil-related motivations still don’t rise to the level of stealing or even controlling Iraqi oil assets, and they appear to be tertiary motives in the invasion.

Contrasting Views

The foregoing analysis suggests that oil was not a primary motivation for the U.S.-led invasion in 2003, unlike in the case of the 1990-91 Persian Gulf crisis. However, many people in the Middle East and elsewhere believed the opposite. According to a Pew Research Center opinion poll conducted in 2002, 76 percent of Russians, 75 percent of French, 54 percent of Germans and 44 percent of British believed that the war was driven by a desire to control Iraq’s oil.²⁸ Most Iraqis, it is fair to say, held this view which was prominent among moderate and radical Islamists around the world. One survey conducted in six Arab states in late February 2003 showed that more than 80 percent of the citizens of those countries believed that dominating oil was an important motivation for America’s invasion of Iraq.²⁹ Another poll of six Arab countries found that a majority of the population in the Arab world believed that democracy-building was not a real U.S. objective, and that more important objectives are oil, Israel-related policy, or the weakening of the Muslim world.³⁰ These views are not irrational given America’s role in the region and its far-flung reach around the world, but they are exaggerated enough to be problematic.

The Iraq war worsened distrust of the United States and anti-Americanism in the broader Arab world, and especially in Iraq, where 90 percent polled said they distrusted the U.S.-led coalition.³¹ Another poll conducted by political scientist Shibley Telhami found that in 2000, more than 60 percent of Saudi citizens expressed confidence in the United States, whereas by 2004, less than 4 percent had favorable views.³² That result is supported by other polls that showed many or most Muslims believed that the United States was acting appropriately in its war on terrorism prior to the 2003 invasion of Iraq. After the invasion, negative views of the United States had spread outside countries in the Middle East. In Indonesia, for example, favorable ratings of the United States dropped from 61 to 15 percent, and in Nigeria, favorability fell from 71 to 38 percent.³³

The offensive perspective discussed earlier in this article is held in its most extreme form within al-Qaeda, but in some measure, it struck a broader chord with others in the Muslim world. This dynamic allowed al-Qaeda and its affiliates to promote anti-American sentiment which, as numerous polls showed, rose dramatically with the onset of the war on terrorism and, later, the 2003 Iraq War.³⁴ Mistakenly, Al-Qaeda saw the invasion of Iraq, like the 1990-91 Gulf crisis, partly as an effort to dominate Muslims. As Bin Laden put it, after Iraq, the crusader alliance will move to occupy the “rest of the Gulf states to set the stage for controlling and dominating the world. For the big powers believe the Gulf and the Gulf states are the key to controlling the world due to the presence of the largest oil reserves there.”³⁵ In his “Message to the American People,” Bin Laden asserted that George W. Bush invaded Iraq because he was “blinded” by “black gold,” leaving himself “stained with the blood of all those killed on both sides, all for the sake of oil and the benefit of private corporations.”³⁶

To be sure, the so-called Islamic State is quite different from al-Qaeda in its etiology. However, as a former deputy CIA director put it, the Islamic State shares al-Qaeda’s goals, even if it does not want to follow the guidance of Al-Qaeda leader Ayman Zawahiri, or Bin Laden before him.³⁷ They certainly share a similar view of an imperial, oil-stealing United States that seeks to undermine Muslims in the Middle East. This viewpoint presents with some irony, as the Islamic State has seized oil refineries in the region and sold oil in order to fund its enterprise and reward its fighters.³⁸

America as an Imperialist or Hegemony-Seeking State?

The United States views access to Persian Gulf oil as vital to U.S. and global security.³⁹ But there are several reasons to raise serious doubts about the characterization of America as an exploitative and oil stealing power, or even one especially eager to be a regional hegemon.

American Intent in 2003
The first reason is intent. To be sure, the Iraq War of 2003 had some elements of hegemony-seeking, and was a choice that America certainly did not have to make, one it has since paid for dearly.⁴⁰ But, as suggested earlier in this essay, the United States was motivated less by the trappings of hegemony than by other factors related to the September 11 attacks.

Aggrandizing Behavior in the 1991 Gulf crisis?

In addition, actual American behavior did not conform with what we would expect from an exploitative or oil stealing power. Historically, such aggrandizing states do not withdraw their forces from a region. Yet, in 1991, at the end of the Gulf War, the United States and its allies chose to end the ground war at 100 hours. Invading Baghdad was quite possible, but was never seriously considered by the administration, which saw such a venture as not easily supported by the international community and liable to get America stuck in a region in which it preferred to have limited engagement.⁴¹

Now, consider the 2003 invasion of Iraq. The United States did not intend to maintain a massive military force in Iraq, but rather to withdraw or significantly reduce its force once Iraq became more stable. No American leader could have sensibly said that the United States should permanently occupy Iraq with massive forces. In fact, the Bush administration expected to rebuild Iraq without great trouble and then bring U.S. troops home. The occupation lasted far longer because it was poorly planned and ran into unexpected problems, stemming partly from the de-Baathification of Iraqi society, which contributed to a robust insurgency.⁴² It was not because the U.S. administration wanted to stay in Iraq.⁴³

Serious plans for withdrawing American forces were unveiled by June 2006, and troop withdrawal began in December 2007 under President George W. Bush. President Obama continued this approach in earnest. A central tenet of his presidential campaign was to end the Iraq War and withdraw nearly all troops.⁴⁴ This process was completed by December 2011, with the support of 75 percent of the American people.⁴⁵

Post-invasion Opportunism?
If Washington sought to steal or control regional oil, why didn’t the United States seize Iraqi oil fields or appropriate proceeds from Iraqi oil sales? And why haven’t American firms performed well in gaining oil contracts in Iraq?

There is no evidence to suggest that Washington had a policy of siphoning off oil monies from Iraqi oil sales, nor would it have been possible to keep such a strategy secret. The United States did not steal Iraq’s oil, and it did not use its dominant position in Iraq after the invasion to help its major oil companies secure oil contracts. Instead, the U.S.-led elimination of Saddam Hussein’s regime lifted UN economic sanctions on Iraq and opened it up for far more business from other states than for the U.S. itself. Contracts to exploit Iraq’s oil were awarded, representing one of the largest auctions held anywhere in the 150 year history of global oil. Five of Iraq’s six major oil fields went to European, Russian and Asian oil companies.⁴⁶ The one major U.S. contract went to ExxonMobil, for refurbishing the West Qurna oil field, which, due to its enormous and almost untapped potential, is crucial to Iraq’s goal of increasing oil production. Two of the most lucrative of the multi-billion dollar oil contracts went to Russia and China, both of whom had strongly opposed the U.S. invasion.⁴⁷ Although it is true that the oil services companies Halliburton, Baker Hughes, Weatherford International and Schlumberger won smaller lucrative drilling subcontracts, U.S. firms performed relatively poorly despite the United States being in effective control of Iraq, with tens of thousands of troops deployed and extraordinary economic costs absorbed.

China, in fact, capitalized at a much more significant level than the United States. Since 2009, China’s nationalized oil companies have gradually become top players in the Iraqi oil sector.⁴⁸ In June 2009, China National Petroleum Corporation (CNPC), in partnership with British Petroleum, won a contract to increase production at Iraq’s biggest oil field in Basra, which would make it the world’s second largest oil field behind Saudi Arabia’s Ghawar.⁴⁹ That was followed by other major Chinese joint contracts for the large Halfaya oil field, as well as the Maysan complex of fields located along Iraq’s border with Iran.⁵⁰ Since 2012, Iraq has produced oil at the highest rate since Saddam Hussein seized power in 1979, and in 2013 it surpassed Iran in oil exports to China.⁵¹ Between 2009 and 2013, Iraq’s exports to China more than tripled, to account for more than 8 percent of China’s total oil imports; Iraq may even soon challenge Angola as China’s second largest oil supplier behind Saudi Arabia.⁵²

China’s oil companies, and not those of America, have become the biggest single foreign investors in the Iraqi oil industry, helping Iraq to unleash its enormous oil potential.⁵³ China’s CNPC aims to improve its foreign production from 1.5 million barrels per day in 2009 to 4 million in 2020. This growth plan, in which Iraq plays a crucial role, is geared towards compensating for falling Chinese domestic production from mature fields.⁵⁴ Of course, security, political, and infrastructure constraints in Iraq have impeded China’s progress. However, China has boosted its energy security through its position in Iraq—and energy security is one of China’s main national security concerns.

What is more remarkable is how little the United States and its major oil companies gained from the invasion and occupation in the form of oil contracts, economic benefits and influence.⁵⁵ There was no apparent plan in Washington for them to score major gains. This stands in sharp contrast to the portrait of America as an oil stealing or even hegemonic actor.

Improvised Foreign Policy: Not Grand Strategy

Beyond intent and behavior in specific crisis, what about the bigger picture? At the broadest level, it appears that Washington has often tried to achieve its goals without involving itself seriously in the region. If anything, the real story of U.S. foreign policy is how the United States was slowly dragged into the region, first by the fall of the Shah of Iran in 1979, which took it by surprise, and then by the effects of the Iranian revolution. Those events were followed by the shocking 1979 Soviet invasion of Afghanistan, the unexpectedly brutal and long Iran-Iraq war in the 1980s, Iraq’s ill-fated invasion of Kuwait in 1990, and the terrorist attacks of 11 September 2001. The British withdrawal from “East of Suez” in 1971 forced post-Vietnam America to assume the role of protecting the free flow of oil at reasonable prices to the global economy and Washington became more involved in protecting the region’s oil—without much zeal, design, or grand strategy; more importantly, with an absence of grand strategy.⁵⁶

This narrative of a superpower caught by surprise, unprepared, and drawn into a region’s conflicts without a grand strategy or even clear opportunism, contrasts sharply with views of the United States as a country that seeks to steal or even control sovereign oil, and has hegemonic regional designs.⁵⁷ If anything, U.S. foreign policy was reactive to events in the region. Washington was far more likely to respond to crises and threats as they arose than to fashion an organized, hegemony-seeking approach to the region, much less one aimed at stealing the region’s oil.

The Costs of Misperception: The Externalities of Using Oil

The externalities of using oil and its hidden costs have not been properly priced into what Americans actually pay at the pump, which hampers America’s ability to produce a sensible national energy plan and decrease oil consumption. Many scholars and analysts who focus on energy have made this argument, though there is little attention paid to how its high oil consumption generated misperceptions of America, which had the potential to contribute to terrorism.⁵⁸ Assessing the costs of such misperceptions is no easy task and requires more detailed analysis beyond the scope of this essay, but it is worthwhile to consider it in the context presented here.

First, it is important to assess the overall costs of using oil before gauging the costs of oil and terrorism. Al-Qaeda central has been diminished by various developments in recent years, including the death of Osama bin Laden, but we have witnessed the proliferation of al-Qaeda offshoots around the world from Yemen to Iraq, not to mention the rise of the Islamic State. What is certain is that it has been very costly to fight al-Qaeda and its offshoots.

Some analysts put the cost of the Iraq and Afghanistan wars as high as $3 trillion.⁵⁹ If we consider that the American national debt in total is around $17 trillion, this cost becomes easier to appreciate, as does its role in the game plan of terrorist groups like al-Qaeda, which has sought to bankrupt the United States because it realizes that it cannot defeat it militarily.⁶⁰ We cannot put a price tag on misperception. Certainly, many of the costs borne by the United States would probably have been borne even with little misperception—but it certainly increased the likelihood of terrorism and other anti-American actions, which in turn generated their own effects.

Second, we need to assess the link between oil and terrorism. Al-Qaeda terrorism has many causes, which differ with each of its affiliates and offshoots.⁶¹ While some of these causes take higher precedence than oil and emerge from failed societies, oil issues and terror are clearly linked, further raising the costs of heavy oil reliance.⁶²

Third, we are now in a better position to think about the role of misperception in the overall costs of using oil. While America’s role in the Gulf is to protect oil supplies from aggressors and to prevent oil price spikes that could hurt the global economy (most recessions have been linked to such spikes), this is often misinterpreted by many in the region as the United States’ efforts to steal regional oil and undermine the rights of Muslims and other local inhabitants to their resources.

While misperceptions are mediating variables between thought and action. In this sense, they cannot be decoupled from a range of actions taken by those with such misperceptions. These actions in the current context include various political, economic, and strategic attacks by terrorist groups, rogue states, and others on American interests, as well as general noncooperation, and the creation of a discursive environment that produces reputation costs for America over time.

In this sense, the costs of such misperceptions have broad impacts. Yet, while misperceptions are linked to many costs of oil use, including American defense expenditures for protecting the Persian Gulf, the costs of misperceptions are also distinct in some ways. In particular, such mistaken views not only stoke terrorism but also anti-Americanism, both directly and indirectly.⁶³

Such exaggerated views also complicate America’s relations with Middle Eastern countries, negatively affect its reputation among Muslims, bolster Islamic radicals, and hurt its global image.⁶⁴ These effects, in turn, damage its soft power. International relations scholar Joseph Nye originally defined the term “soft power” in 1990 as the ability of one state to change the behavior of others through the means of attraction and persuasion, rather than coercion or payment.⁶⁵ As conceptualized by Nye, soft power rests on the ability to shape the preferences of others, or change their views because they admire and share your values, emulate your example, and appreciate your foreign policies.⁶⁶ Soft power co-opts and attracts others rather than coerces them, while smart power combines both hard and soft power to achieve foreign policy outcomes.⁶⁷ Negative perceptions of the United States hurt its soft power around the world.

An accurate view of the United States is central to a range of factors that are important to U.S. interests worldwide and to U.S. and global energy security cooperation in the production of energy, in the protection of energy supplies, in the avoidance of conflict in or near the region, and in the decrease of radical terrorism that emanates from the Middle East. Misconceptions make such cooperation harder to achieve, and also undermine American soft power, with attendant and serious costs. Such blowback costs must be added to the ledger when evaluating the cost of a barrel of oil.

Conclusion

The United States is interested in preventing any actors from dominating the Middle Eastern oil trade. In this sense, it seeks to dominate the region. This essay does not claim that American foreign policy is absent of any imperial aspects, but rather argues that those aspects are grossly overestimated by terrorist groups, their sympathizers, and most of the United States’ critics. Such misconceptions cannot be underestimated in their strength and pernicious effects on American foreign policy, even if it is not easy to pinpoint some of these effects.

These misconceptions and their impacts must be considered in determining the costs of U.S. oil consumption. The massive use of oil in the United States—approximately one-quarter of global consumption per day—pushes the United States to take actions in the Middle East that are likely to be misperceived, and those actions produce blowback effects that hurt American security.