Congress, Iran, and Oil

One of the problems surrounding Congressional indifference to US energy policy is that the US is economically vulnerable. As stated in a previous article, our adversaries have noticed this vulnerability and are actively trying to exploit that weakness. This economic vulnerability has provided a tool for Iran to damage the US economy and the leverage to manipulate US foreign policy.

Roughly 40% of the world’s known oil reserves are located in the Middle East and within the reach of Iran. There have been several recent articles about Iran test launching missiles that can reach most of the Middle East and beyond. According to press articles, this recent saber rattling (that was evidently fabricated) by Iran manipulated the price of oil by roughly $5 per barrel.

Tehran clearly sees the market’s reaction and know that their activities can destabilize the region enough to economically punish the US for a protracted (and thanks to Congress…an indefinite) period of time. Aside from the threats posed by their long range missiles, Iran has a history of employing surrogates to attack oil facilities in the region. Iran, through its Iraqi proxy, al Dawa, was behind a series of bombings in Kuwait in the 1983 that included the country’s largest oil refinery. In early and late 1980’s, Iran sponsored a Bahraini Shia group to attack petroleum facilities in Bahrain. Iran still maintains this capability. However, with today’s pressure on oil prices any successful or unsuccessful operation leveled at the region’s facilities would have a magnified effect.

As the oil situation currently stands coupled with the fact that Congress will not act expeditiously (if at all), it is a zero-sum-gain that benefits Iran. The more destabilized the current situation in the Middle East is the more the price of oil goes up. As a result, the US loses economic momentum while economic momentum is gained by Iran. That translates into more money going into the pockets of a regime that has systematically killed US citizens and soldiers and less money for you and your family.

In the backdrop of all of this is Iran’s continued push for uranium enrichment. From Tehran’s optic, they can continue to ambitiously pursue this goal knowing that they can inflict a devastating economic blow to the US if there is any indication Washington intends to threaten their enrichment activities. In other words, Tehran has the ability to levy their own unique version of economic “sanctions” if the US tries to thwart their enrichment/nuclear ambitions. Given OPEC’s latest warning against any military action against Iran, Tehran realizes that message is being effectively communicated by entities other than their diplomatic or military channels. In essence, it leaves the US in a clear lose/lose situation.

If the US/allies elect to take direct action against enrichment activities, Iran has the ability to systematically affect the oil flow out of the Middle East. Regardless if it is restricting the flow of oil through the Strait of Hormuz, using surrogates to attack the region’s petroleum facilities, and/or using their short and long range missiles it all spells for oil prices that will easily eclipse today’s records and would cripple the US economically. On the flip side of that coin, if the US does nothing about Tehran’s enrichment/nuclear ambitions we allow a hostile regime to obtain the mother of all destructive weapons. A regime that has called for the outright annihilation of our staunchest ally in the Middle East, tried to overthrow other regional allies, and killed US citizens.

This brings me back to those who have placed the US in that situation. Ever since the energy crisis during the late 1970’s, Congress has had the responsibility to establish a national energy policy but has neglected to do so. As normal, it is the people of this nation that must pay the price for their lack of leadership. With over 30 years of neglect, we are faced with a glaring weakness that the largest sponsor of state terrorism sees and is exploiting.

The US needs its own substantial oil production facilities within its territory. Those would not be within Iran’s missile range and that would dramatically reduce the economic effect of Iran’s volatile behavior. As it stands today, those facilities do not exist and we are economically beholden to Iran’s behavioral whims.

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