Donald Trump, if elected president, would deploy the once-scorned "oil weapon" to pursue geopolitical goals. One of many problems with this strategy is that his central target learned, long ago, it doesn't work.
In an interview published Mar. 26 by the New York Times, the real estate mogul said he'd halt US imports of oil from Saudi Arabia and other Middle Eastern exporters if they didn't commit ground forces to the fight against Islamic jihadists and reimburse the US for defense. "If Saudi Arabia was without the cloak of American protection," he said, "I don't think it would be around."
The oil embargo
Saudi Arabia, of course, participated in the oil embargo of 1973-74, which targeted the US, the Netherlands, South Africa, and Portugal in retaliation for support of Israel in the Yom Kippur War. The move shattered market rigidities that had suppressed crude values, stimulated development of commodity trading for oil, and set the Organization of Petroleum Exporting Countries on course to learn why cartels fail.
From all that turmoil emerged an important lesson: Oil is fungible. If the US spurned the 1 million b/d of oil it now imports from Saudi Arabia, Saudi Aramco quickly would find other buyers, and US buyers would find other suppliers. Saudi Arabia might be annoyed but hardly hurt.
Companies forced by the government to implement the embargo, however, would include Motiva Enterprises, through which Saudi Aramco owns interests, lately changing, in American refineries that employ American workers and sell American products. In this way alone, the strategy would inconvenience the US more than it would Saudi Arabia, which would feel no new pressure to do US bidding. In fact, it might be inclined to do the opposite. The rebuff might encourage the kingdom to coordinate a response with China, a much more important customer of its oil than the US and the target of another Trump proposition: a stout tariff on Chinese goods. Someone should ask the tycoon what benefit he sees in trade wars.
American defense of Saudi Arabia, moreover, is not the one-way proposition Trump makes it out to be. While US and Saudi interests conflict in many areas, the alliance has been solid and consistent, though recently strained. One underappreciated contribution to the relationship and to global economic health is the Saudi commitment to hold 1.5-2 million b/d of production capacity idle for use in supply emergencies. The cost of maintaining such an important market buffer is considerable. Nothing compels Saudi Arabia to assume the burden beyond concern for market stability and leverage within OPEC.
And as a Mar. 1 fact sheet from the Department of State makes clear, Saudi defense is not all cost to the US. Saudi Arabia, according to the department's Bureau of Political-Military Affairs, is the largest foreign military sales (FMS) customer of the US, "with nearly $100 billion in active FMS cases." In connection with those sales, US agencies provide training and advisory services to the Saudi Ministry of Defense, help modernize the Ministry of the National Guard, and support critical infrastructure protection and public security. Since the 1950s, the Army Corps of Engineers has supported military and civilian construction in the kingdom.
Foiled terrorism
"As a result of US security assistance, the kingdom has foiled numerous terrorist attempts against Saudi and foreign targets and contributed to coalition operations against [the Islamic State in Iraq and the Levant] in Syria," the bureau reports. Elsewhere in the document it says the US "will continue to collaborate with Saudi Arabia to improve training for special operations and counterterrorism forces, integrate air and missile defense systems, strengthen cyber defenses, and bolster maritime security."
While brandishing the oil weapon, Trump seems less than thoroughly informed not only about historic and contemporary contexts important to his proposal but also about the problem at hand. Those instincts on which he professes to depend in matters of foreign affairs must have failed him this time.