Indian Defence Review

Graph courtesy http://chartsbin.com/view/oau

The solution to counter petro-Jihadism1 has to be multi vectored. It has to be a sagacious blend of military action, economic policies, social rehabilitation and reconciliation and, technological enhancement. There is no country which will not be affected if an all out war breaks out in the Arab world and the world will spiral into more complicated crises and wanton scenarios. Therefore, the resolution should encompass multifaceted and concerted actions of all nations.

It is clichéd and yet so surprising that how the world has changed since the events of September 11, 2001. America’s longest war, the campaign in Afghanistan, has not yet come to an end and the world is still shocked and aghast at the upshots of the Iraq War. After almost a decade and half, the freedom is not enduring nor is there a new dawn in sight. The peace in Afghanistan is fragile at its best, with her neighbours, especially India, Pakistan and Iran waiting anxiously albeit for different reasons, to witness how democracy runs its course. Iraq, on the other hand, has descended chaotically into sheer failure. The incapability of the Iraqi Government has led to a severely hegemonic insurgency and that crisis in Iraq has raged out into an already tumultuous Syria and now the Middle East is shrivelling under the heat of threat of the ever burgeoning menace and obscene brutality of jihadist groups such as the Islamic State (IS) and Jabhat-ul-Nasra.

In order to analyse the reasons that has led to this melting down of once prosperous civilisations, one has to clearly comprehend the various obscure and yet fundamental equations of economics and politics coupled with the darkest shadows of religious fundamentalism that swarm the region. Oil was, until recently, the political weapon used by Middle Eastern States, Arab Nationalists and Baathists to stimulate and further fundamentalist Islam. The oil producing countries, on one hand, wrested technology, management and distribution through multinational corporations and on the other, used silah al naft (the oil weapon) against the enemies of the umma and to achieve ideological projects in the region. It cannot be considered that the relation between jihad and oil prices is a sheer coincidence.

Blackmail of War and Oil

The Middle East was once one of the most impoverished regions of the world sustaining itself on agriculture and religious tourism. A British company run by Mr William D’Arcy pioneered the change when it struck oil at Majlis-i-Sulaiman in Persia on May 26, 1908. After the discovery of oil in Saudi Arabia in 1938, the region became one of the wealthiest in the world. But rather than exploiting the new found wealth judiciously and transforming the nature of administration to suit the times, the region just became a wealthy but socially regressive tribal colony with customs deeply mired in religious fundamentalism and obscurantism. Rather, the rulers of Saudi Arabia preferred to stick to the old ways in order to assert better administrative control over its businesses and moral control over its citizenry.

The many wars in the Middle East also forced the prices of gas to increase manifold. The pattern of peaking of gas prices is synchronistic with conflicts in the Middle East. The prices rose very high during the Yom Kippur War in 1973, during the Iranian Islamic Revolution and at the onset of the Iran-Iraq War. During the Iraq war which raged on for almost eight years, crude oil prices reached a peak of almost $120 per barrel2. (Fig.1)3

The discovery of shale gas deposits in the US and Canada and the heightening interest of European and South Asian and South East Asian countries in unconventional sources of natural gas led to a drastic decline in the interest in and price of crude oil to almost $60 per barrel in a matter of weeks.4 Though this was foretold, it led to panic among many Middle Eastern countries. The condition was exacerbated with the fact that speculations arose about peaking of oil supply in Saudi Arabia and reports from Energy Information Administration of US which stated that Saudi Arabia had inflated the report of their resources to about 40 per cent of existing and proven reserves.5

What is unnervingly strange is the fact that the rise of ISIS, or the IS/DAESH as it prefers to call itself, into prominence coincides with the aforementioned discovery of shale gas deposits, further exploration and commercially viable extraction of the same. Furthermore, there exists an unambiguous pattern in the relation between oil reserves and jihadism irrespective of region – Kenya, Nigeria, Northern Mali, Libya, Syria, Iraq and Yemen. Even the oil and gas rich Tarim Basin in China is affected by Islamic extremism with Sunni Uyghurs in the forefront.

In order to comprehend these patterns, two questions need to be asked.

• How can a Sunni Jihadist organisation survive, establish itself and reach a commanding position in the predominantly Shia country of Iraq and put up a staunch fight against Syria run by the Alawite Shia sect of Islam and capture vast tracts of land, without being patronised by the most powerful Sunni countries?
• Is it just a Sunni versus Shia battle or is it a battle to reap back the lost profits of the oil markets in order to reassert themselves as a hegemonic state in the region before the wells dry up?

Mercurial Values in Religion and Crude Oil Prices

While the ISIS had unleashed their brutal fury into Syria and Iraq, Saudi Arabia and its other Sunni allies from Cooperation Council for the Arab States of the Gulf (CCASG), except Jordan, went into a state of deafening silence. Former Iraqi PM Nouri al-Maliki spoke out aloud about Saudi and Qatari support to the IS. There have been very strident accusations of Prince Bandar bin Sultan’s involvement in the rise of ISIS and the Al-Nusra front6. Divergent to the inertia it exhibited while ISIS was ravaging through Syria and Iraq, Saudi Arabia cajoled a coalition of Sunni states to act against Houthi rebels in Yemen who were fighting against forces loyal to President Abd Rabbuh Mansur Hadi on one front and against Islamic State fighters on the other.

The Arab coalition has been carrying out air strikes and limited ground offensive against Houthi rebels and forces loyal to former President Ali Abdullah Saleh who are engaged in a land battle against the Islamic State, which in point of fact means that they were providing direct air support to IS. This is an unashamed and blatant depiction of the contradicting stand of Saudi Arabia in the politics in the region and displays how much it has done to support the scourge of barbaric organisations such as the IS.

But that does not answer our question whether this is a mere Shia versus Sunni clash. It is could be partly that. What Saudi Arabia hopes to achieve could be viewed as employing one of the most effective instruments of economic policy with the intention of gaining back the profits to bring about speculation in the oil importing countries which will consequently lead to hoarding of oil and catering for strategic reserves by these nations.

Another dimension is the relation Saudi Arabia shares with Iran. It claims that Iran directly supports the Houthi rebels and has been exhorting its Western allies to act against Iran. With the nuclear deal with Iran, Saudi Arabia fears that the lifting of sanctions from Iran will increase competition in the oil market where Iran, with proven reserves that can last for another 98 years, can afford to sell oil at a cheaper rate in order to revive their embargo-hit economy. In this case, the Saudis are left with the only option that is to paint the Iranians and the Houthis as transgressors in legitimate Sunni territory and try to pressurise the Western countries not to lift the embargo.

But a country like Saudi Arabia, which is infamous for subterfuge and sly political manoeuvring, will not lean against only one option to achieve hegemony. That is where the Israeli dimension should be drawn out. The jihadis of the Islamic State have reached the outskirts of Damascus, which is less than 150 miles from Jerusalem. If the Islamic State manages to enter Israel, it will have a massive influx of aspiring jihadi recruits sworn to the obliteration of Israel, into their ranks and have copious amounts of money flowing into their coffers in the form of donations from Sheikhs of all Arab and Islamic countries which will consequently widen the base for establishing the Caliphate as the Islamic State wishes to. Meanwhile, a state of conflict will become inescapable in the Middle East the way the Salafi oil magnates desire.

The only way the oil clans would be able to screen out international scrutiny is by deception wherein they would direct the IS to organise minor attacks on small tracts of land in northern Saudi Arabia or along the Trans Arabian Pipeline where the production of the oil is not affected by minor skirmishes. It would give them an opportunity to portray themselves as victims of the barbaric organisation while they deal with Abu Bakr al-Baghdadi and his minions under the table providing them all moral, financial and material support. Moreover, militant groups in Africa such as Boko Haram and Al Shabab having sworn allegiance to ISIS, the Salafi oil magnates will be able to tweak up oil prices in Nigeria where the oil industry is largest in terms of size and economic returns and in Kenya where new oil fields have been found. This again allows the Arabs to establish a monopoly in terms of price and stock control in the industry.

It is imperative that the world takes an astute cognizance of the treacherous balance existing in the Middle East and explore various options in order to prevent outbreak of an internecine, pestilential and enduring conflict extending from Northern Africa to the Arabian Peninsula. What makes this a delicate situation is that any protest towards states like Saudi Arabia or Qatar are depicted as Anti Islamic, and in this case in particular, will be considered as warmongering rhetoric before a 21st century crusade.

Recourses

In order to prevent this game of subterfuge and callous politics, the civilised world should be able to isolate each cause of this conflict and attend to each with a holistic approach. Primarily, the developed and emerging economies must be able to insulate themselves from years of conflict by exploring non-conventional sources of energy and unconventional resources of oil and natural gas with alacrity. Arab countries are not in position to implement and export embargo or other punitive terms of engagement with importing countries because of the existence of other sources of fuel. The incorporation of state-of-art technology in probing and exploring new resources in regions in Central Asia, South America, beneath Arctic and Antarctic shelves and in ocean-based fields, is of paramount importance. But this should also be combined with methods of extraction which are sustainable, environmental friendly and short term.

Secondly, the oil importing countries must employ more fuel efficient technologies in industries and transport not only for controlling GHG emissions but also to reduce export demand from the Middle Eastern countries so that the exporting countries are compelled to keep the prices low. Thirdly, a proactive initiative must be undertaken to address the nuances of delinking fundamentalist and political Islam from the oil industry. There should be a concerted effort to separate the Saudi-sponsored ulemas and jihadist organisations from countries with oil reserves and prevent their spread in other areas with newly discovered or lesser used but economically feasible oil fields like in Kazakhstan and Northern Mali. Continuous monitoring will be required to prevent overwhelming influence of jihadism in these regions.

Fourthly, while a joint military campaign is being carried out to thwart the IS in Iraq and Syria, there should be an extensive and exhaustive rehabilitation and resettlement campaign in areas freed of the IS menace. Such missions should also sensitise the local populace of the evils of religious fundamentalism by including measures of capacity building through interlinking of different communities thereby increasing mutual trust and exposure among them. Fifthly, established global financial institutions and emerging institutions such as the AIIB and BRICS bank should formulate their policies to engage, both actively and passively, those countries which indulge in unscrupulous and inhuman methods to establish monopoly in the trade of natural oil and gas. They should also be able to accommodate those war-ravaged countries, where vicissitudes of war and oppressive rule have rendered the population dishearteningly impoverished, by encouraging monetary intervention from donor states and prevent transaction of jihadi money through banking institutions in donor countries.

The solution to counter petro-Jihadism has to be multi vectored. It has to be a sagacious blend of military action, economic policies, social rehabilitation and reconciliation and, technological enhancement. There is no country which will not be affected if an all out war breaks out in the Arab world and the world will spiral into more complicated crises and wanton scenarios. Therefore, the resolution should encompass multifaceted and concerted actions of all nations.