Islam and Oil
Anybody that has seen the film “Syrianna” is certainly convinced of the role and power of oil in the Arab and Muslim world and its linkage with the rest of the world’s economy through the involvement of multinationals that want to assure their access to the Middle East’s energy resources. Yet what is not clear is how direct the link between oil and Islam is. After all, Muslim countries like Saudi Arabia and Iran, Algeria, Indonesia, Iraq, Kuwait, Libya, Qatar, United Arab Emirates (UAE) and (in part) Nigeria cooperate within OPEC acting like any other monopolies to assure that their product – oil – is sold to the rest of the world at the best market price they can get. In fact, the Persian Gulf countries (Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE) produce about 27% of the world's oil, while holding 57% of the world's crude oil reserves. Besides oil, the Persian Gulf region also has huge reserves of natural gas, accounting for 45% of total proven world gas reserves.
When we make reference to Islam, we should preferably refer to the Islams keeping in mind that the Islamic faith is divided or fragmented both theologically and culturally. Since its origins, Islam has been composed of various sects, schools and currents that propound concurrent visions with regard to religion, doctrine and practices. While Islamic movements would like to recreate the unity of the community of believers, the fact is that the Sunnis, which account for 80-85% of the world’s Muslims, and the Shiites, are divided. The division is even more marked, especially in the wider Middle East in the split between Shiite Iran and most of the Sunni Arab world where fears of a Shiite ark led by Iran and supported by Iraq’s Shiite and its proxy, Hezbollah, in Lebanon.
The capacity of influence of resource rich Iran should not be underestimated. A common feature of all Muslim states, especially in the wider Middle East, has been the attempt to overcome their colonial pasts and their dependence of their previous western masters. Iranians were already negatively predisposed with the overthrow of the Mossadeq government in 1953 which is frequently cited as an example of western interference. At the time, Mohammed Mossadeq, the popular nationalist leader of Iran, decided to nationalize the country’s oil companies and in particular the dominant Anglo-Iranian Company. This led to American and British involvement in his overthrow. Symbolically, the Iranian Revolution of 1979 has represented for Islamists the death knell of western influence in that country with the deposing of the Shah’s corrupt and western supported government. The longevity of the revolutionary government and its current defiance of the western world with the clamour caused by its nuclear ambitions make it a potential threat both to the Sunni Arab regimes and to the US and its allies that are still dependent on the region’s energy resources.
With regard to the Sunnis, the Iranian Revolution upset the balance of power of the modern Islamic world which had been under Saudi hegemony since the creation of the Conference of Islamic States in 1969 and the victory of “petro-Islam” during the 1973 Arab-Israeli war. The oil shock of 1973 when oil-producing Arab states, led by Saudi Arabia, announced that they planned to restrict oil supplies to the West “in a bid to exert their collective but independent power against the West” marked the culmination of efforts by Muslim states throughout the 20th century to escape their colonial pasts. It was also the high point of pan-Arab cooperation.
Yet the Arab Sunni world has not been able to remain united. The Gulf War of 1990-1991 is indicative of the attempts by Saddam Hussein to claim leadership of the Arab world. He had tried to do the same thing during the stalemated Iran-Iraq War of 1980-1988. Saddam Hussein was keenly interested in elevating Iraq to a strong regional power. A successful invasion of Iran would have made Iraq the dominant power in the Persian Gulf region, and would have strengthened its lucrative oil trade. The war was disastrous for both Iran and Iraq as it stalled economic development and disrupted oil exports, brought about excessive casualties and caused huge debts.
The invasion of Kuwait by Iraq in 1990 tore the Sunni world asunder as Iraq claimed to recover its “19th province” which it felt had been taken away from it by the artificial border demarcations by the British colonial authorities and attempted to make Iraq a regional heavyweight and a leader among the disinherited Arab Muslims that were not able to enjoy the wealth generated by Kuwait’s ruling few.
The war aside, despite the revenues generated by oil, the economic record has been relatively poor. Saudi Arabia, for example, despite sitting on the world’s biggest oil reserves, has managed to reach a GDP per head that is a third less than that of Portugal (the poorest country in EU15). Its society is also highly unequal as the royal family lives lavishly while ordinary citizens are poor.
As a result, the exploitation of oil not only brought immeasurable new wealth but new and increasingly bitter social tensions as well. Oil wealth has also inhibited the development of representative political institutions giving rise to religious extremist movements threatening the regimes in power and increasing instability in the wider Middle East. The eclipse of pan-Arabism has also contributed in making Islamic fundamentalism and some of its most extreme manifestations as the most attractive alternatives to the disenchanted.
The combination of oil and volatility has also impacted on the response of the United States and the rest of the western world in engaging in the region to induce stability among unstable states on the verge of (if not undergoing) social, religious and political restlessness. In a world where energy demand continues to grow as emerging economies such as China and India compete for fuel with the West and increase demand, the current model of energy security which focuses primarily on how to handle any disruption of oil supplies from producing countries needs revamping. As a result, both the United States and the European Union seem to be readapting and developing strategies based on diversification be it in the production of new nuclear power plants and “clean coal” technologies, renewable resources, or pipeline deals with Russia whose fields have been central to the growth of worldwide supply in recent years.
What does all this mean? The multiple fissures in the Islamic world are beginning to make the use of oil relatively obsolete as an instrument of influence. In other words, long gone are the glory days of the oil shocks of the 1970s and Arab and Muslim cooperation. The energy alternatives provided by major non-OPEC producers such as Russia and the plans for further diversification to reduce dependence by the rest of the world forces Muslim states to begin focusing on their internal contradictions and the rise of transnational extreme fundamentalist movements. It forces them to concentrate on the exigencies of modernization and development through the better utilization of their oil wealth for fear of an implosion. In this context, the relationship between Islam and oil is symptomatic of the ability of Muslim regimes to better distribute their oil wealth.
When we make reference to Islam, we should preferably refer to the Islams keeping in mind that the Islamic faith is divided or fragmented both theologically and culturally. Since its origins, Islam has been composed of various sects, schools and currents that propound concurrent visions with regard to religion, doctrine and practices. While Islamic movements would like to recreate the unity of the community of believers, the fact is that the Sunnis, which account for 80-85% of the world’s Muslims, and the Shiites, are divided. The division is even more marked, especially in the wider Middle East in the split between Shiite Iran and most of the Sunni Arab world where fears of a Shiite ark led by Iran and supported by Iraq’s Shiite and its proxy, Hezbollah, in Lebanon.
The capacity of influence of resource rich Iran should not be underestimated. A common feature of all Muslim states, especially in the wider Middle East, has been the attempt to overcome their colonial pasts and their dependence of their previous western masters. Iranians were already negatively predisposed with the overthrow of the Mossadeq government in 1953 which is frequently cited as an example of western interference. At the time, Mohammed Mossadeq, the popular nationalist leader of Iran, decided to nationalize the country’s oil companies and in particular the dominant Anglo-Iranian Company. This led to American and British involvement in his overthrow. Symbolically, the Iranian Revolution of 1979 has represented for Islamists the death knell of western influence in that country with the deposing of the Shah’s corrupt and western supported government. The longevity of the revolutionary government and its current defiance of the western world with the clamour caused by its nuclear ambitions make it a potential threat both to the Sunni Arab regimes and to the US and its allies that are still dependent on the region’s energy resources.
With regard to the Sunnis, the Iranian Revolution upset the balance of power of the modern Islamic world which had been under Saudi hegemony since the creation of the Conference of Islamic States in 1969 and the victory of “petro-Islam” during the 1973 Arab-Israeli war. The oil shock of 1973 when oil-producing Arab states, led by Saudi Arabia, announced that they planned to restrict oil supplies to the West “in a bid to exert their collective but independent power against the West” marked the culmination of efforts by Muslim states throughout the 20th century to escape their colonial pasts. It was also the high point of pan-Arab cooperation.
Yet the Arab Sunni world has not been able to remain united. The Gulf War of 1990-1991 is indicative of the attempts by Saddam Hussein to claim leadership of the Arab world. He had tried to do the same thing during the stalemated Iran-Iraq War of 1980-1988. Saddam Hussein was keenly interested in elevating Iraq to a strong regional power. A successful invasion of Iran would have made Iraq the dominant power in the Persian Gulf region, and would have strengthened its lucrative oil trade. The war was disastrous for both Iran and Iraq as it stalled economic development and disrupted oil exports, brought about excessive casualties and caused huge debts.
The invasion of Kuwait by Iraq in 1990 tore the Sunni world asunder as Iraq claimed to recover its “19th province” which it felt had been taken away from it by the artificial border demarcations by the British colonial authorities and attempted to make Iraq a regional heavyweight and a leader among the disinherited Arab Muslims that were not able to enjoy the wealth generated by Kuwait’s ruling few.
The war aside, despite the revenues generated by oil, the economic record has been relatively poor. Saudi Arabia, for example, despite sitting on the world’s biggest oil reserves, has managed to reach a GDP per head that is a third less than that of Portugal (the poorest country in EU15). Its society is also highly unequal as the royal family lives lavishly while ordinary citizens are poor.
As a result, the exploitation of oil not only brought immeasurable new wealth but new and increasingly bitter social tensions as well. Oil wealth has also inhibited the development of representative political institutions giving rise to religious extremist movements threatening the regimes in power and increasing instability in the wider Middle East. The eclipse of pan-Arabism has also contributed in making Islamic fundamentalism and some of its most extreme manifestations as the most attractive alternatives to the disenchanted.
The combination of oil and volatility has also impacted on the response of the United States and the rest of the western world in engaging in the region to induce stability among unstable states on the verge of (if not undergoing) social, religious and political restlessness. In a world where energy demand continues to grow as emerging economies such as China and India compete for fuel with the West and increase demand, the current model of energy security which focuses primarily on how to handle any disruption of oil supplies from producing countries needs revamping. As a result, both the United States and the European Union seem to be readapting and developing strategies based on diversification be it in the production of new nuclear power plants and “clean coal” technologies, renewable resources, or pipeline deals with Russia whose fields have been central to the growth of worldwide supply in recent years.
What does all this mean? The multiple fissures in the Islamic world are beginning to make the use of oil relatively obsolete as an instrument of influence. In other words, long gone are the glory days of the oil shocks of the 1970s and Arab and Muslim cooperation. The energy alternatives provided by major non-OPEC producers such as Russia and the plans for further diversification to reduce dependence by the rest of the world forces Muslim states to begin focusing on their internal contradictions and the rise of transnational extreme fundamentalist movements. It forces them to concentrate on the exigencies of modernization and development through the better utilization of their oil wealth for fear of an implosion. In this context, the relationship between Islam and oil is symptomatic of the ability of Muslim regimes to better distribute their oil wealth.
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