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Iran, Oil, and the Carter Doctrine

Two cheers for the return of the Carter Doctrine.

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Its revolutionary regime makes a nuclear Iran far more dangerous and destabilizing than if Iraq’s Saddam Hussein had developed such capability. It would embolden sizeable Shia populations in Sunni countries, and thus undermine our oil rich Sunni Arab allies in the region (for example, in Saudi Arabia). Some oil rich neighbors would feel compelled to accommodate Iran, including its desperate need for higher oil prices to offset declining production. A nuclear Iran would also set off a proliferation cascade across the Middle East, further radicalize the region, end hope for an Arab-Israel peace, potentially transfer nuclear materials to its terrorist allies, and perhaps back up its threats to destroy Israel. Major energy importing countries, primarily Asian countries, would be forced to walk a delicate tightrope between the United States and Iran. 

As these developments play out over months and years, a significant conflict in the Middle East, involving the United States, will become more likely and the region’s long-term oil supply becomes unreliable. The net result will be soaring oil prices.  

The best hope for continued U.S. enforcement of the Carter Doctrine and its corollary—protecting against control by a hostile regional power—is to prevent a nuclear Iran. A recent Bipartisan Policy Center report, “When Time Runs Out,” proposes a triple track approach involving diplomacy, sanctions, and visible and credible preparation for a military strike.  The Obama administration has focused mostly on the first two tracks. However, diplomacy and sanctions will only have the chance to be effective when simultaneously coupled with an active and open preparation for the military option.

There are a number of things, short- and long-term, the U.S. can do to mitigate Iran’s impact on the oil market.  First, the U.S. should do whatever it can to encourage Iraq’s ambitious oil development plans, one of the most promising in the world. Even if Iraq achieves only about half its stated goal, it could meet 40 percent or more of the estimated global oil demand growth over the next decade. Second, the U.S. Department of Energy needs to test different release rates of its Strategic Petroleum Reserve (SPR), which stores about 700 million barrels of crude oil as a strategic cushion. The SPR needs to be fully tested to make certain it can achieve its stated release rate. Third, the administration should ask the Saudis to commit to ramping up oil production if U.S. differences with Iran intensify. Fourth, the U.S. should explore routes to export Persian Gulf oil that avoid the Strait of Hormuz. For instance, the Saudis and Iraqis could rejuvenate the old Iraq-Saudi pipeline to the Red Sea, work with Iraq and Turkey to refurbish and expand Iraq’s two pipelines through Turkey, and examine the feasibility of a new Iraq-Jordan pipeline. Finally, the U.S. must develop a bipartisan, comprehensive energy policy that encourages reduced oil consumption and diversifies our energy supply. As Winston Churchill, as first lord of the Admiralty, stated in 1913 about the nation’s new oil policy, “Safety and certainty in oil lie in variety alone.”

Much is at stake with the Iran issue: U.S. national security, nuclear proliferation, Arab-Israel peace, moderation of the Islamic world, security of Israel and Arab allies, the U.S. global position, and the secure supply of crude oil from the Persian Gulf that is so integral to our economy. It is vital, therefore, for the United States to continue to enforce the Carter Doctrine. 

Michael Makovsky, foreign policy director of the Bipartisan Policy Center, was a special assistant for Iraqi oil policy in the Office of the Secretary of Defense from 2002 to 2006 and author of Churchill's Promised Land. Lawrence Goldstein is a founder of the Energy Policy Research Foundation (EPRINC) and former consultant to the Office of the Secretary of Defense.

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