About 10 years ago, al-Qaeda's leader, Usama bin Laden, stated that his target price for oil was $144 a barrel, and that the American people, who allegedly robbed the Muslim people of their oil, owe every Muslim $30,000 in back payments.
At the time, $144 a barrel seemed farfetched. As of this writing, bin Laden was a mere $8 per barrel short of his target. Indeed, the economic warfare component of the global campaign against the West has undeniably been a resounding success for the jihadist movement. This has deep implications for the West and its ability to prevail in the long war of the 21st century.
The U.S., deeply embroiled in a struggle against radical Islam, nuclear proliferation, and totalitarianism, now faces difficult realities. Relations with the Muslim world are at an all-time low, but more than 70 percent of the world’s proven oil reserves and over a third of the production are concentrated in Muslim countries.
The theocratic and dictatorial regimes that most strongly resist America's efforts to bring democracy to the Middle East are the dominant forces in the world oil economy. While the U.S. economy bleeds, oil-producing countries like Saudi Arabia and Iran—both sponsors of radical Islam—have enjoyed staggering windfalls.
In 2006, the United States spent about $260 billion on foreign crude oil and refined petroleum products. This year, the figure could surpass $500 billion, the equivalent of our defense budget. As bin Laden had hoped, Muslim oil producers are taxing every American man, woman, and child.
Limited Leverage
The flow of U.S. petrodollars to the coffers of foreign oil producers not only casts a large shadow over America's prospects of winning the war on terrorism, it also limits Washington's diplomatic maneuverability on central policy issues like human rights and nuclear proliferation.
In April 2006, Secretary of State Condoleezza Rice told the Senate Foreign Relations Committee, "We do have to do something about the energy problem. I can tell you that nothing has really taken me aback more, as Secretary of State, than the way that the politics of energy is… ‘warping' diplomacy around the world. It has given extraordinary power to some states that are using that power in not very good ways for the international system—states that would otherwise have very little power."
One of these states is Iran. With 10 percent of the world's oil reserves and the world's second largest natural gas reserve, Iran's President Mahmoud Ahmadinejad appears unfazed by the prospects of international sanctions against his country resulting from its efforts to develop nuclear weapons. Oil also lubricates the so-called Bolivarian revolution led by Venezuela's President Hugo Chavez, who leverages Venezuela's oil wealth to buy political influence and consolidate an anti-western bloc in the western hemisphere.
U.S. diplomacy is further complicated by the indefatigable thirst for energy in the booming economies of China and India, which are increasingly dependent on the very same countries the United States is trying to rein in. The growing appetite for oil not only bankrolls rogue nations, but also feeds what could become a global competition for control of energy resources. Rogue nations like Iran and Sudan can now quite literally buy the support of a third of humanity.
They can also buy the protection of Chinese veto power on the U.N. Security Council simply by inking energy deals with this oil-hungry emerging superpower.
OPEC's Scam
The Organization of the Petroleum Exporting Countries (OPEC), spearheaded by Saudi Arabia, is also squeezing the U.S. and its western allies by deliberately keeping oil supply tight to prop up prices. Not only is Saudi production lower today than it was two years ago, despite the increase in demand, but the cartel has effectively deleted 2.4 million barrels per day (mbd) from the global oil ma
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