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7THE GEOPOLITICAL AND GEO-ECONOMICAL MECHANISMS OF ENERGY SECURITY
IN WORLD POLITICS: IRANIAN CASE
Abstract
The article covers the problem of energy security from main theoretical approaches in the field of international relations theory - political realism, geopolitics and geo economics. The purpose of the article is aimed at revealing factors that contribute to the emergence of international conflicts and contradictions where natural recourses play the key role in «resource nationalism» and defines a shift from geopolitics to geo economics. A total ban imposed by USA on the purchase of oil from Iran, shows that in contrast to the military-political power, geo-economic power allows to achieve political goals by more gentle means. However, this does not mean that geo-economics abolishes traditional criteria of power - the possibility to use force to protect national interests.
Keywords
energy security, natural resources, resource nationalism, geo-economics,
Unites States, Iran, oil sanctions
AUTHOR
Oleg A. Khlopov
PhD in Political Science, Associate Professor of the Department of American Studies of the Russian State University for the Humanity, Moscow 6, Miusskaya sq., Moscow, 125993, Russia. E-mail: rggu2007@rambler.ru
1. Introduction
Over the past years, energy security has become one of the main topics of international security due to the following key trends: the growing dependence of developed countries on oil and gas; the growing energy needs of the emerging new powers, such as China and India; depletion of non-renewable fuel reserves (it is expected from the middle of this century); the growing debate on climate change issues; renewed interest of many countries to nuclear power plants. Additional factors include big amount of revenues that states receive from exporting energy recourse mainly oil and gas and competition among suppliers of resources on international market.
Most of the scientific literature in the analysis of influence of hydrocarbon resources on foreign policy on the traditions of the school of political realism and geopolitics. The main assertions of the advocates of this approach can be summarized as follows:
- access to and control over natural resources, among which oil, gas, coal the most important, are the main components of national interest;
- energy resources are becoming increasingly scarce and unstable: assertion often follows from the thesis of the "oil peak", "the curse of resources" and "resources war";
- competition among states for access and control over these resources will increase
in future;
- conflicts and wars over these resources are more and more distinct, if not inevitable.
This general approach is well illustrated in numerous works by Michael Klare on the subject of international energy policy (Klare, 2001, 2008). The arguments given in a number of his books can be summarized in some points:
1. In the period of the post-bipolar world and with the growth of the new economic power of new states and energy transnational companies obtaining or maintaining access to valuable natural resources and control over them are becoming increasingly important on the world political agenda. This is the main source of conflict between the strongest states: the United States, China, Russia, the EU, Japan, and India.
2. Natural resources, primarily oil, are becoming increasingly scarce due to increasing demand in Asia and the prospect of an "oil peak".
3. Most of the world's hydrocarbon resources from areas such as the Central Asia and Africa, are located in the weak, fragile states that have many interstate disputes and conflicts in which political and religious extremism is growing. Oil supply leads to paradoxical consequences, namely the formation of these states as influential international actors and centers of power and conflict because of their possession and control over vital resources. One can trace the connection between the wealth of natural resources and the growth of radical Islam and the threat of international terrorism in these countries.
4. The probability of occurrence of international conflicts over oil and other natural resources increases.
These overall comprehensive theses are undoubtedly a strong and convincing basis for the analysis and conclusions of many analysts and politicians.
For example, from this point of view, it becomes obvious that the unreliability of the straits of Malacca and an embargo on oil export would pose a fundamental threat to China's main national interests.
On the other hand, the same allegations underlie the concern of the US Congress that the proposal of the state-owned Chinese oil company CNOOC to buy American oil company UNOCAL in 2005 would represent a critical threat to American national interests and US energy security.
These theoretical conclusions of political realism theory are the basis on which the military planning of the Pentagon, the general staff of the China or the Russian armed forces work out their national defense strategies to protect vulnerable sources of energy and their transportation (Blank, 1995, Jaffar, 2004).
The same assumption is suitable for "struggle for Africa" and "the struggle for the Arctic" where great power rivalry arises for new resources of oil and gas.
Similar concerns about new conflicts for resources also emanate from Western analysts regarding the rising role of China, increasing its influence in the Central Asia, Africa, Latin America and the prospects for conflicts between China and its regional neighbors, Russia, Japan and India (Morris, 2006).
2. Materials and Methods
The purpose of the study is to reveal and compare the modern approaches to the problem of conflicts for resources in international political studies - political realism, geopolitics and geo- economical theories.
It should be noted that research on the topic of war and conflict for resources can fairly be attributed to one of the traditions of political realism - geopolitics. At the same time, it is difficult in some way to relate the problem of conflict for resources to a certain theoretical concept in the theory of international relations. The only thing that unites these works is that, firstly, as a rule, they are written from the point of view of the traditions of real politics («real politik») and geopolitics, which gives grounds to include them in the
general paradigm of political realism adjusted for modern balance of power, struggle for power and influence in world politics among the states.
Secondly, the key topic of these studies is the problem of the lack of resources, primarily hydrocarbons, and the historical struggle between among states and companies for access to these resources.
Thirdly, these research works are written from the point of powerful approaches to energy security, interstate relations, and consideration of their foreign policy under conditions when the lack of resources for some states provokes conflicts and armed clashes with those who have them and thus actualize the problem of energy security of consumer and supply countries (Khlopov 2016).
After the international energy crises of 1973 and 1979 and in the early 1980s, the decline in production of various resources in the world led to the emergence of problems in scientific literature about the lack of global resources. These studies are not the first theoretical attempt to investigate the problem of lack of resources. Thomas Robert Malthus (1766-1834), a British economist, wrote more than two centuries ago in his «An Essay On the Principles of the Population» in 1798: "The population increases in geometric proportion, while the livelihoods increase in arithmetic ratio» (Malthus, 1997).
The viewpoint of Malthus at the times of the Enlightenment was rather pessimistic, but perhaps more realistic. Despite technical progress by the end of the 20th century, the world witnessed hunger (in Africa, Asia) and serious environmental problems as global warming.
Modern research on interstate conflicts for resources focused on the causes and means of resolving these conflicts. Researchers have shown that there is another form of nonviolent conflict, but also indicated that these conflicts could intensify in the near future.
Part of the literature is devoted to national or bilateral relations. The works of such authors as Reuveny and Maxwell (Reuveny and Maxwell, 2001), and Ross (Ross, 2004) contribute significantly to the understanding of conflicts for resources in general.
In general, the topic of "resource conflicts" from the point of international political analysis was quite well and clearly stated by Robert Mandel, professor and researcher in the field of international relations. In his book "Conflicts for World Resources", published in 1988, he focuses on the main problems of these conflicts, arguing that the main causes and factors of "resource wars" remain relevant to the present (Mandel, 1998).
R. Mandel identified a number of structural factors that contribute to the emergence of international conflicts: 1) a decrease and inelasticity of the supply of resources to the global market; 2) an increase or persistent inelastic demand for these resources at the global rather than the national or local level; 3) a change in global access to resources compared to an earlier period, where unlimited access to resources by some countries caused their unfair distribution; 4) the increasing importance of collective or common resources, rather than private or national monopolized resources; 5) increase in side effects of one national energy policy in relation to others; 6) increasing the complex structures of international interdependence in the development, production, processing and distribution of resources; and 7) increasing the impact of transnational and non-governmental forces, such as Greenpeace, in determining how to use resources.
Issues and problems of the so-called "resource nationalism" are also analyzed in the framework of the thesis of "conflicts for resources". "Resource nationalism" means enhanced state control over natural resources, primarily in the producing countries, which strengthen their position in the international arena and make it possible to enrich their budgets. In practice, increased state control means an increase in the state's shares of mining companies, as well as a restriction on foreign investment in the energy sector, which is often accompanied by a revision of existing contracts.
As examples of countries whose leadership pursues a policy of "resource nationalism," most often the west researchers and analysts cite Russia and Venezuela. In itself, the desire of the state to manage national natural resources, experts say, is absolutely natural. Nevertheless, from the point of view of energy consuming countries, complications for all market participants may arise due to the possibility of using energy levers for political purposes. In addition, experts point to the risk of reducing investments in business projects of the state-controlled companies, a significant portion of whose revenues go to finance social programs.
Another phenomenon of the "resource nationalism" is the significant growth of influence in the world of state-owned energy companies. If in 1978 international companies with a predominance of private capital controlled 70% of oil and gas reserves, now their share has decreased to 20%. More than two thirds of proven traditional reserves are controlled by state-owned companies - new "Seven Sisters" (including Saudi Aramco (Saudi Arabia), Gazprom (Russia), CNPC (China), PDVSA (Venezuela), etc.), which completely have changed the relationship between states and private companies, strengthened the struggle for energy.
In the Russian scientific literature, the topic of "resource conflicts" has begun to be studied quite recently. This is explained by the fact that Russia is not experiencing a shortage of natural resources, it is a sufficient state, and the foreign policy aspects of energy security can be reduced to four main problems.
Firstly, that is discrimination against the export of Russian raw materials to international market, which has been increased by European states in recent years, and some actions by "Western partners" aimed at weakening the competitive advantages and activities of Russian oil and gas companies abroad.
Secondly, with the imposing sanctions and restrictions on Russian economy, domestic businesses have lost access to foreign investment in modern technology that are needed for oil-gas industry.
Thirdly, competition in energy markets among oil and gas companies for the right to develop fields, supply oil and gas and processed products to markets has been increasing. Finally, the Russian Federation has no significant levers of influence on the price policy of energy resources.
3. Results
In the Anglo-Saxon scientific literature in recent years, publications have appeared that study dependence and the correlations between the rising oil prices with the aggressive behavior of states, first of all oil-gas exporting countries, which led to the creation of a theory about the aggressive behavior of petroleum states.
Studies show that oil states become aggressive and start conflicts when oil prices skyrocket. Political analyst Cullen Hendrix, on the examples of 153 countries over a 50-year period, showed that with high oil prices, oil exporting countries start behaving themselves more aggressive towards their closest neighbors. At the same time, oil prices do not affect the behavior of ordinary, non-oil-exporting countries. According to the Hendrix model, if the price of oil is above the threshold of $ 77 per barrel, then oil states become at 30% more aggressive than non-exporters.
These explanations are based on the premise that high oil revenues contribute to a decrease in the personal, political responsibility of the authorities inside the country and their responsibility for political decision-making, which leads to an increase in adventurism in the international arena. Oil revenues also help to build up the military potential, providing oil exporting countries with more substantial revenues to finance their military spending (Colgan, 2013).
However, the patterns described above in the logic of the proposed "aggressive oil theory" cannot explain why the Russian leadership continues to behave fairly consistently and firmly in Syria, fighting against international terrorism using armed forces at a low and unstable oil price ($ 50 per barrel in August-October 2015 and $ 35 in February 2016). It obviously points to the weakness of this theory that is enabled objectively to evaluate the actions of states, taking into account other circumstances than the high price of oil (Hendrix, 2014).
Energy security and geo-economics
Similar power mechanisms explaining the problems of energy security are inherent in the modern approach to the study of world politics and economics - geo economics. Geo-economics is considered as a modern geopolitics, formed under the influence of the factors of globalization and regionalization (Dergachev, 2002).
Geo-economics is the doctrine of the technique of national operation in the geo-economic space in order to timely regroup the forces to reach the most favorable conditions for the formation and redistribution of world income. In this context, income is understood as the rent received from the sale of goods and services produced within the framework of internationalized reproduction cycles.
One of the most authoritative scholars, Edward Luttwak, argues that in the new era after the Cold War economic and financial instruments are very important. This thesis supports the fact that transnational corporations, large international banks, stock exchanges and various speculative products can easily destroy states or at least make them vulnerable.
One of the modern researchers, Klaus Soilen, believes that geo-economics is the study of the cultural and strategic aspects of resources, that give the possibility to obtain a sustainable competitive advantage. This is a continuation of the logic of geopolitics applied to the era of globalization. He also proposes a new term that comes to replace the classic concepts of geopolitics "Heartland" and "Romeland" - "Nareland", (Nareland acronym from English - Natural Resource Lands) (Soilen, 2012).
This new logic of scattered geographic locations defines a shift from geopolitics to geo economics. Justifying this thesis, the author sees the reason the current US presence in the Middle East, where hydrocarbon reserves are concentrated, as well as the presence of interests of China in the agro-industrial sector and in the petroleum industry of African countries.
From a geo-economical point of view, power is identified with control over international networks. Power arises from the ability to create international networks (trade, transport routes, channels for the transmission of material resources, goods, information or images), using them in order to earn income. At the same time, from the point of energy security, international networks are a system of oil and gas pipelines, routes of transportation and delivery of oil, gas, coal, electricity and other necessary energy resources or their products for the needs of the economy.
At the same time, the one who occupies a strategic position in the international network has the ability to maximize its advantages, possesses power, influence and profit. If political and military power allows one country to impose its will, to threaten and strike, then that country controls international networks and thus has possibilities to manipulate and influence others. Under the new conditions, power means the ability to establish or maintain order in networks.
Mobility is also an important category in geo-economics. It is the ability of a state or a company responds quickly to changes and adapt to them, to change or influence the formation of the supply route, which gives them competitive advantages.
From this point of geo-economics, international energy security is the ability to achieve global development strategies in the formation of international networks, control
and maintain stable operation, taking into account the balance of interests of all stakeholders (producers, consumers, transit countries).
4. Discussions
In May 2019 Unites States re-imposed the sanctions after President D. Trump has pulled out of a 2015 accord aimed at curbing Iran's nuclear ambitions. Washington also says it wants to stop what it calls Tehran's "malign" activities including cyber attacks, ballistic missile tests, and support for violent extremist groups and militias in the Middle East.
The US has been gradually re-imposing sanctions, but analysts say this latest round is by far the most significant. The US State Department announced a total ban on the purchase of oil from Iran. About eight countries that buy oil from Tehran, and which were not subject to sanctions - China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece since 1 May 2019 must stop buying Iranian oil.
More than 700 individuals, entities, vessels and aircraft are now on the sanctions list, including major banks, oil exporters and shipping companies. US State Secretary Pompeo said that more than 100 big international companies had withdrawn from Iran because of the looming sanctions.
In November 2018, after withdrawing from an international nuclear deal with Iran, the United States imposed sanctions on countries for the purchase of Iranian oil. The Donald Trump administration provided special exemptions to only eight countries, allowing them temporarily for six months import oil from Iran. And now it has become known that the White House does not intend to prolong the regime of exclusion as the goal of the USA is to reduce Iranian exports as quickly as possible.
The United States is trying to get Tehran to give up its nuclear program and stop supporting militants in the Middle East. Iran's oil exports are shrinking rapidly. So, Italy, Greece and Taiwan refused to buy oil from the Islamic Republic almost from the moment of the introduction of US sanctions. As a result, Iranian shipments decreased by 2.5 million barrels per day to 1.1 million barrels in March 2019. In April, they dropped even more to 1 million barrels per day.
Thus Iran in the hands of the United States has become a strategic tool for manipulating the oil market. And without new sanctions, the Islamic Republic is going through hard times. According to the IMF, inflation in recent months has accelerated to 30% (the real rate has lost half of its value since the beginning of 2019), and budget revenues continue to decrease. The new package of sanctions will only aggravate Tehran's economic isolation.
Probably, Iran will continue to adhere to the tough political position of "disobeying" the United States. At the same time the United States are pursuing towards Iran the policy that Israel needs. As Mikhail Alexandrov, a leading expert at the Center for Military-Political Research at MGIMO points "Trump was originally a representative of the proIsrael lobby. The main foreign political opponent of Israel is Iran, therefore, Washington is seeking a variety of means in order to reject Tehran, weaken, force to curtail foreign policy" (Polunin,2019).
Tehran is ready to respond to the decision of the United States. Ali Reza Tangsiri, commander of the naval division of the Islamic Revolutionary Guard Corps (IRGC), said that the Iranian authorities would block the Strait of Hormuz, if Tehran could not use it because of US restrictive measures.
Iran is not the first time warning about the possibility of the blockade of the Persian Gulf. In July 2018 the Deputy Commander of the IRGC, Ismail Kousari, spoke about this possibility. In December, President Hassan Rouhani repeated that if one day the Americans
wanted to prevent the export of Iranian oil, oil would not be exported at all through the Persian Gulf.
This statement by the Iranian leader was made on the background of aggravation of relations between Washington and Tehran when on the 2-d of December US Secretary of State Mike Pompeo accused Iran of testing medium-range ballistic missiles, which allegedly could carry nuclear warheads and threaten the countries of Europe and the Middle East.
The United States sent to the Persian Gulf US Navy group of military ships led by the aircraft carrier "John C. Stennis" to "show strength" to Iran. And on November 21, 2018, the commander of the Iranian Islamic Revolutionary Guard Corps General Amir-Ali Hadjizade, stated that the American aircraft carriers in the Persian Gulf, as well as the US base El-Udeid in Qatar, Al-Dafra in the UAE and Kandahar in Afghanistan are under the sight of Iranian missiles (Polunin 2019).
The American edition of "The National Interest" confirmed that in case of an armed conflict with Iran, the United States risks facing a powerful blow on their ships and bases in the Persian Gulf area. Ballistic missiles, maneuverable small ships, submarines and boats of the Iranian fleet, along with minefields will pose a serious threat to the US Navy (Gay, 2018). In addition, the publication noted that several types of weapons available to Iran, are "deadly" for the US military. These are the Sajil ballistic missiles with a range of up to 2,500 km, the Qadir submarine, the Khalidge Fars anti-ship missiles and the Russian S-300 air defense missile systems.
Iran has chances to block the Strait of Hormuz, through which one fifth of world oil supplies go. Yet its width at its narrowest point is only 54 km, and the northern coast entirely belongs to Iran. Tehran understands that in this case the energy security of the European Union, India, China and Japan will be under attack and affects global interests.
5. Conclusion
Indeed, Iran has opportunities blocking the Strait of Hormuz. However, the real prospect of the US-Iran conflict in the Strait of Hormuz is not yet visible. Iran has never blocked the strait before and this means that a real military clash with the United States is an extremely unfavorable scenario for Tehran. However, there are fears that if Tehran is cornered and forced to completely curtail oil exports, it will proceed to decisive actions. This scenario fear, above all, European countries, that directly speak about the danger of a conflict situation.
It is likely that by raising rates and increasing pressure, the White House still hopes that Iran will eventually agree with the conditions of the United States and will be afraid to move to direct confrontation. The United States is actively imposing sanctions worldwide against oil-producing countries: Russia and Venezuela.
Americans are thus clearing the way to the oil market for their oil companies. USA using geo-economical instruments is trying to get a profitable position in the international network of energy recourses in order to maximize its economic advantages, power, influence and profit. The political and military power of the Unites States allows them to impose sanctions, threat and control international networks of transport routes.
Iran in this case has quickly to respond to changes and adapt to them, changing the formation of new the supply route, which will not let decrease oil revenue and use geo-economic advantages in their favor.
From this point of geo-economics, international energy security is the ability to achieve global development strategies in the formation of international networks, control and maintain stable operation selling oil, taking into account the balance of interests of producers, consumers, transit countries. In contrast to the military-political power, geo-
economic power allows to achieve solutions to the problem by more gentle means. However, this does not mean that geo-economics abolishes traditional criteria of power to use military political, instruments to achieve the political goals.
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