Thanks for the reply, Neverfail. You have raised many good points. Here are my comments:neverfail wrote: ↑Wed Feb 28, 2018 2:57 pmCass: even when the US was at its most oil import dependent barely a decade ago the US imported precious little oil from the ME. Think of the logistical costs associated with importing oil from such distant parts. Most of America's imported oil cam from source countries closer to hand: such as Canada, Mexico, Venezuela and Nigeria.cassowary wrote: ↑Wed Feb 28, 2018 3:25 amIf they are self-sufficient in oil or better yet, a net oil exporter, they may not bother about Persian Gulf oil, the next time there is a crisis.
There is an aspect of American concern for ME (especially Persian Gulf) oil that you might not have considered. Whilst America might never have been particularly ME oil dependent, virtually all of America's allies overseas were. These included NATO member states in Western Europe (as well as neutrals like Sweden and Switzerland), along with Japan, South Korea and The Philippines in east Asia.
The fact that the US Navy patrolled the global sea lanes and had Saudi-Arabia, the OPEC "swing" producer (technically as ally of convenience but de facto as American protectorate) throughout the Cold War years must have been a potent geostrategic tool in ensuring that these loyal US allies remained loyal allies. Likewise, it put the US in the position where potentially it could cut off supplies of crude to the USSR and/or its satellites should they have attempted to import significant amounts to augment their own domestic supplies. This compelled the entire Soviet bloc to subsist off the Caspian Sea reserves pushing these towards premature exhaustion.
It placed the US in the position of being the "power broker" of last resort in the position to decide who gets seaborne supplies of oil and who could be denied these.
Then there is the matter of oil globally being priced in US dollars. It ensures a continued flow of petrodollars into US government bonds (i.e.US government debt) thereby permitting the US to continue living beyond its means and underpinning the cost to the US of maintaining its global power with a (so far) unending stream of borrowed money.
So Cassowary, I put it to you that if the entrance/exit to the Persian Gulf were suddenly to be blocked as I have described above the US would need to react in some way. Not because the US needs the oil but because it needs the Saudi and Gulf states' money.On
While it is true that the US did not and does not import oil from the Persian Gulf due to its distance,
what happens there will affect the US economy. A high price of oil meant the US economy went into recession during the Arab oil embargo in 1973(?).
Its Balance of Trade also worsened because it was an oil importer then. But if the US is a net exporter of oil/gas,
the US makes more money by exporting oil and not lose money by importing oil. Its oil and gas industry will be booming with new jobs as oil companies struggle to meet demand.
On the other hand, US trading partners like the EU and Japan will probably go into recession because they are oil importers. US exports to them will suffer. It is not clear if high oil price will be a net gain or loss for the US. It depends on how much of an oil/gas exporter the US becomes under Trump's energy dominance strategy. If the benefits of high oil prices to the US outweigh the costs, then the US might not want to intervene in a future disruption of Persian Gulf oil. Let the Europeans and Japanese use their own navy and army to deal with the problem. Or perhaps the Chinese will deal with it.
The USSR, like its successor state, Russia was a net energy exporter. So it does not need Persian Gulf oil. The US was keeping an eye on the Persian oil supply for the benefit of itself and its allies. If it becomes a net oil exporter as it is projected to do, under Trump's "energy dominance" policy, the incentive to continue protecting Persian Gulf oil supply diminishes.
That is the canard that I have debunked before. Oil can be priced at whatever currency and it has no impact on the US. Let's say Saudi Arabia gets $ in exchange for oil. Do the Saudis keep all of it in $? No! It will keep some to buy US goods and US investments. But it will also buy European, Japanese and Chinese goods and investments. So it needs to change the $ for Yen, Euros etc. What if it gets paid in say Euros? It also won't keep all of it in Euros. It will change some of it to US$ and other currencies, depending on its needs. It will invest in US treasuries but also Japanese and European ones depending on the investment advice their bankers give them. The idea that the Petrodollar keeps the US government afloat is not true.