Thursday, February 02, 2006

Defining dependence

Daniel Drezner strikes a resonant chord by highlighting who's really dependent on Middle Eastern oil.

Trade on the whole is a good thing, but dependence on oil is bad. Except that a big reason the U.S. has intervened so much in the Arab Middle East for the past 25 years is not just because we're dependent on Arab oil imports -- it's that our allies in Europe and Japan are really dependent on Middle Eastern oil, and we can't afford for their economies to be disrupted either.

Indeed. Although the United States is very dependent on foreign oil, the vast majority of our imported oil comes from friendly countries like Canada, Mexico and Britain. Venezuela is also the source of much of our oil, but Hugo Chavez makes them a less stable partner in this regard.

However, when one looks at the import portfolios of our allies in Europe and Asia, they are desperately tied to the Middle East. Our strategic oil concerns in that region, are therefore pre-eminently about our allies and less about us. A meltdown in the Middle East would hurt us to be sure, but we have options. Our allies, on the other hand, are far less flexible than us. This would of course have a major impact on our trade in goods and services with them. In other words, US companies would still be hurt in an oil crisis, not by their lack of access to petroleum products, but because of the lack of access to them by trading partners.

So in the irony of ironies, America's "oil wars" are seemingly undertaken on behalf of those who criticize them most stridently.

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