With the European Union announcing last Friday an oil embargo on Syria, denounced by some as ‘ too little too late,’ and by others as leading to ‘ nothing good,’ the impact of oil on the fate of the Arab protests has come to the fore of public attention.
In Libya, The National Transitional Council is scrambling to revive oil production, with new oil minister Ali Tarhouni declaring last Saturday that production at the Misla and Sarir oil fields would be restarting in ten days time. During the preceding months of fighting between Gaddafi and rebel forces, Qatar had come to the rescue of the opposition, providing towns in eastern Libya with petrol, diesel and cooking gas to stave off a fuel crisis in rebel areas.
Tarhouni’s announcement comes as analysts predicted that the Libyan revolution would set Libyan oil production back several years, at least. “History shows it’s a big, complex job running an oil industry in a time of complete uncertainty about who is in charge,” said Daniel Yergin, the oil historian and chairman of IHS Cera, an energy consultancy. “The very first thing they have to figure out is what damage has been done and who will run the industry. Then the new government will inevitably review all the existing contracts and relationships.” The ‘scramble’ for access to Libya’s oil wealth has already began, The New York Times reports, with fierce competition expected particularly between Italian company Eni and French company Total.
The openSecurity verdict: For decades prior to the Arab Spring of protests, western academics debated why the Arab world had failed to experience democracy. Some argued colonialism and foreign meddling was responsible, while others argued Arab culture or Islam were inherently contradictory to democracy. Still others pointed to weak middle classes and low human development indicators across the region. But many simply blamed oil.
Huge oil revenues, some historians argued, had enabled Arab states to be constructed without recourse to taxation, and thus dictators could be born and their treasuries filled independent of the consent of their citizenry. To subdue their people, despots simply needed to bribe some and oppress many others, with armies, intelligence agencies and weapons paid for with a small fraction of the ‘black gold’ each had at their disposal.
Oil too provided a simple and powerful means to understand foreign policy. Super powers were either brought off by Arab dictators with cheap supply to oil, or when denied, were motivated by their thirst for oil to wage war (using different noble pretexts). So are such theories sustained by the tumultuous events of the last few months? The evidence is contradictory.
Oil as dictators’ ally...
When the Arab Spring first kicked-off, the traditional thesis regarding oil seemed to stand its ground. While revolutions are difficult to predict, Nate Silver of The New York Times argued, it was no coincidence that the Egyptian and Tunisian governments fell, since both countries have fossil fuel resources below par for the region. Oil and democracy don’t easily mix, it was said. Academic articles and popular commentaries were cited to substantiate the case. And further proof was found in the dramatic events that unfolded in the Gulf.
As Bahraini authorities brutally oppressed protesters, western democracies were content to look on largely without intervention. Fear of neighbouring Iran and the presence of the US Fifth Fleet are arguably two strategic factors that help explain a shameful inaction. But concerns regarding mass Arab protests spreading too closely to Saudi Arabia, the world’s top oil producer and exporter, could not have been far from policy-makers’ calculations.
In Saudi Arabia, as soon as there was a hint of protests, King Abdullah announced a spending spree of billions of dollars, including $66.7bn on 500,000 new housing units, $4.3bn on more medical facilities, an additional two months’ wages for all government workers and two extra payments for university students worth around $500.
...Or oil as dictators’ foe?
But if oil could help the Gulf, somehow it could not save Gaddafi. Much to the embarrassment of western nations today, many media stories have now made public the way the Gaddafi regime successfully used oil to lure the United States, the United Kingdom, Italy, France, and many others into reconciling with the regime. The argument that the west came in to ‘steal’ Libyan oil is thus unpersuasive: prior to intervention, many western oil companies already had access to Libyan oil.
And yet, in the face of mass popular rebellion on the one hand, and outright regime oppression on the other, those oil ties between Libya and the west did not prove steadfast. Slow and hesitant at first, the international community led by the US, the UK and France was finally moved to action. Libyan rebels gained military support and economic aid, and Gaddafi’s regime looked to face its end.
Oil impact defies generalisation
If the theory regarding the incompatibility between oil and democracy holds, Nate Silver argued by way of concluding his article, “then governments like these (Egypt, Tunisia, Syria) ― and not oil-rich ones like Libya, Algeria, or the states of the Arabian Peninsula ― are more likely to be the next to fall.”
Evidently, every theory has its limitations. So it is with caution that we must address Syria’s democracy prospects. Assad’s Syrian regime does not benefit from huge oil revenue, and Europe’s oil embargo will hurt. After all, EU member states take about 95% of Syria’s oil exports, and it will take time for Syria to find new buyers.
But that does not mean that the Assad regime is doomed to fail. Many other factors will be at play. The willingness of the west to intervene is one. Iran’s and Turkey’s reactions are equally significant.
The all important question is how much further sacrifice Syrians are willing to make to rid themselves of Assad and his Baathist clan. Like elsewhere, it is the expenditure of human resources, not reserves of oil, that will determine this struggle.