New US president likely to mark shift in oil policy

The Arabs should be aware that pressure is mounting in the US to reduce dependence on Middle East oil - in other words, to reduce oil imports. Whoever wins next month's presidential election, whether it is Barack Obama or John McCain, is bound to want to shape a new national policy, less dependent on imported oil, for energy and climate change. Both candidates have vowed to do so.

At the same time, several major car manufacturers - Nissan, Volkswagen, Daimler, BMW, Chevrolet, Renault - have announced plans to launch electric cars in the coming two or three years in response to increasing worldwide concern about carbon emissions. Pre-production models of electric cars were the talk of the recent Paris auto show.

The Arabs should heed these early warnings that their current oil bonanza will not last for ever - perhaps, at best, for another decade or two. Already, the expectation that the oil price would soar to $200 a barrel has turned into a mirage. Oil prices have dropped 55 per cent since July, demonstrating the extreme volatility of the market.

What seems clear is that the Arabs - and indeed other oil producers - cannot hope to benefit indefinitely from the colossal wealth transfer of recent years. They should spend the coming years preparing for the day when oil may not be in such great demand.

Well-known oil expert Daniel Yergin has pointed out that the US currently consumes over 20 million barrels a day, 12 million of which are imported. This means that - on the basis of prices in the first half of 2008 - the US is transferring about $1.3 billion every day to oil-exporting countries, or $475 billion a year. This is unsustainable in today's conditions of financial crisis.

Clue to US thinking

A clue to US thinking may be found in a lead article by Richard Holbrooke in the September/October issue of the influential US journal Foreign Affairs. His subject is the likely direction of American foreign policy under the next president.

Holbrooke is a prominent member of the US foreign policy establishment, having served as ambassador to the United Nations, and as Assistant Secretary of State for East Asian Affairs in 1977-81, and for Europe in 1994-96. He is mainly known as the architect of the Dayton Accords that brought the war in Bosnia to an end in 1995.

He advised Hillary Clinton in her bid for the Democratic nomination and is now said to have joined Obama's foreign policy team. He is often described as a Democratic version of Henry Kissinger. His views, therefore, deserve careful attention.

Like Kissinger, Holbrooke is a staunch supporter of Israel and a critic of Arab countries such as Saudi Arabia, which he accuses of "allowing billions of [ostensibly nongovernmental] dollars to go toward funding extremist organisations". Riyadh should publicly refute this libellous charge.

However, unlike most American neo-conservatives and pro-Israeli hawks, Holbrooke comes out firmly against war with Iran. "I have consistently opposed the use of force against Iran," he declares in his article. Instead, he favours a dialogue with Tehran, beginning "through private and highly confidential channels to determine if there is a basis on which to proceed". He contrasts Obama's declared readiness to start such a dialogue with what he describes as McCain's "deep, visceral aversion to talking to one's adversaries".

Nevertheless, he warns Americans that the economic muscle of oil-producing nations, whether Arab or non-Arab, must inevitably give them greater political power - in ways the US and its allies may not like.

"Does anyone doubt," he asks, "that the current assertiveness on the international stage of, for example, Iran, Russia and Venezuela comes from the economic muscle that accompanies their growing petrodollar reserves?"

Holbrooke believes that the presidential election will, in some ways, be a referendum on Iraq. He decries McCain for being ready to leave US troops in Iraq indefinitely and endorses Obama's view that military victory, as defined by President Bush and McCain, is not possible. Obama, he writes approvingly, "finds unacceptable the costs to the US of an open-ended commitment to continue a war that should never have been started."

More generally, Holbrooke supports Obama's view that US relations with the Muslim world will require special attention from the next American President. (It is worth recalling that Obama himself has pledged that, if elected, he will travel to a major Islamic forum within the first 100 days of his presidency in order to declare that the United States is not at war with Islam.)

For Holbrooke, the heart of the geostrategic challenge to the US lies in five countries with linked borders - Turkey, Iraq, Iran, Afghanistan and Pakistan. US relations with all five have deteriorated, he charges, while US policy in this 'arc of crisis' has, since 2003, been marked by incoherence.

He dismisses current US policy towards Afghanistan as a 'failure' and correctly maintains - at least in the opinion of this writer - that "getting policy towards Islamabad right will be absolutely critical for the next administration".

Gloomy about Sudan

Looking beyond the 'arc of crisis', Holbrooke is gloomy about in Sudan. He warns that the North-South pact, once hailed as a genuine Bush-era success, is now in danger of collapse. He fears that the key provision of the agreement - national elections followed by a referendum on independence for the South - will be ignored or repudiated, and that, by 2010, Sudan could once again explode into a major North-South conflict.

Holbrooke has little to say about the Arab-Israeli conflict except to affirm that "the next president must engage personally with this issue, as every president from Nixon to Bill Clinton has in the past". He wants the US to return to "its role as a serious, active peacemaker"

In general, Holbrooke pleads for diplomacy to take its traditional place once again in US national security policy. This is an explicit repudiation of the 'Bush Doctrine' which preached - and practised - the unilateral use of military force, pre-emptively and preventively, to shape the world to American (and Israeli) desires. Holbrooke's article should perhaps be read as his application for the post of Secretary of State if, as is now widely expected, Barack Obama wins November's presidential election.

Patrick Seale is a commentator and author of several books on Middle East affairs.