There are two problems: the changed nature of power and incongruencies between governance and society; governance lags behind dominance by local politicians, whose priorities eclipse international considerations.
Interdependencies have changed. The power of transaction channels depends on their vulnerability. The Saudis depend on the US for power while their own power is their oil supply.
Power today has evolved to a point where small powers can frustrate higher ones, as in the case of Vietnam and Iraq. Power today is issue specific. The rift between the US and the USSR was zero sum, as is the alliance of the US and Israel against Iran. But in a multimember variable sum game there are many sides, as in Russia’s relations with the US and Iran.
The zero sum game doesn’t work. The US should transcend its outdated unilateralism for the regionalism that characterizes the EU, for example—a variable sum game in which France and Germany, former enemies, are now allied. This can happen with Iran. To solve problems, the US must behave differently, that is, diplomatically. The International Court of Justice must hold more power; the US shouldn’t order everyone else around. We can’t force people to be free.
Hussein Ebneyousef, president of International Petroleum Enterprises, next gave a presentation on “Trend-Setting Energy Policies: Western Misunderstanding and Misrepresentation.” He began and ended with quotations from the Sufi poet Rumi: “The story of love is voiceless and expressive. . . .”
Oil is the most political commodity in the world, he said. Constraints along the supply chain include sanctions and wars. There is an undesirable stalemate among parties who won’t dialogue or cooperate. War can’t continue as wasteful consumption.
There is an imbalance between supply and demand.
The US deserves credit for developing the modern oil industry. Bahrain and Saudi Arabia split their profits fifty-fifty, a good strategy, inspiring the Iranians, who were sick of British dominance. Fueled by American policy, the CIA coup changed the situation. The next era was dominated by the US. As a trend setter, Iran attracted others to the oil industry.
After experimenting with contracts, Iran decided on solely service contracts in the mid 1960s; there were also efforts to develop a national gas industry; the petrochemical industry developed refineries for home and abroad, “iranizing” industry until the regime changed and the war with Iraq quickly followed. The whole world was affected. The US imposed economic sanctions.
US oil production has declined since then, while Iranian productivity has doubled; the world capacity has dwindled by 1000 percent. 1.2 percent of the total reserve is in Iran—less than that of Saudi Arabia but more than Iraq or others.
American efforts were more successfully directed toward natural gas; Iran increased its capability there and its productivity; sanctions didn’t affect it after the First Gulf War. Oil production is still increasing.
Said San’ai, Rumi’s mentor, “They impersonate demons, scared by their own reflections, scream loudly.”
Next to speak was Ilan Berman, vice president of the American Foreign Policy Council, on “The Economics of Confronting Iran.”
He first noted that according to Condi Rice, “No one is a real Iran expert; we all dabble.”
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