The U.S.’ Return to Its “Denial Oil” Strategy Is Critical

Yves here. This is an interesting perspective on the US strategy in the Middle East, since the author is based in the Kurdistan region of Iraq. He sees the US as withdrawing substantially from the Middle East, a view not widely shared among Western commentators, who see that question as still in play.

In addition, he depicts the US strategy in the Middle East as “Denial of Oil” to the Soviet Union. Although this seems tidy, in fact the Soviet Union was self-sufficient in energy, by design. From Wikipedia:

The energy policy of the Soviet Union was an important feature of the country’s planned economy from the time of Lenin (head of government until 1924) onward. The Soviet Union was virtually self-sufficient in energy; major development of the energy sector started with Stalin’s autarky policy of the 1920s. During the country’s 70 years of existence (1922-1991), it primarily secured economic growth based on large inputs of natural resources.

The article later notes the Soviet Union was even able to export to advanced economies during the 1970s oil embargo period.

Thus the aim of US policy appears better understood as the US trying to control oil assets less for its or the Soviet Union’s needs (although the chart below shows period of considerable US oil import dependence) but more for influence over other countries.

Note that Big Serge seems to differ with this point of view. He contends that the overarching US foreign policy objective is to prevent the development of region-dominating powers who could compete effectively in their sphere of influence. In the Middle East, oil is still arguably a very big piece of that equation but not the only one, as the Houthi’s ability to restrict trade on key shipping lanes demonstrates.

By Shahriar Shiekhlar, who has more than 22 years experience largely in Oil and Gas in Iran and then in Kurdistan Region of Iraq, where he lived there for the past 10 years. He has cooperated with some famous Kurdish news agencies such as Rudaw (in Kurdish, English, Arabic), Kurdistan 24 (in Kurdish and Arabic), Basnews (in Kurdish and Persian), and foreign agencies such as famous Persian newspapers of Shargh-daily and Arman-e-Emrouz,, as well as Fair Energy Foundation, specifically for oil and gas policy and on energy security issues. Originally published at OilPrice

Amidst the growing influence of American rivals in the Middle East, the United States appears to be reassessing its ties with regional allies just as it nears completion of its pullout policy from the region. President Biden’s administration has initiated a re-evaluation of U.S. policy toward the Middle East, despite recent attacks on American sites in Iraq, Syria, and Jordan aiming to compel a full withdrawal of American forces. While returning to the Middle East presents challenges for the United States, a region that has profoundly shaped American foreign policy for nearly fifty years, it could also afford an advantage over global rivals, Russia and China.

Challenges in U.S.-Middle East Historical Ties

Strategic ties between the U.S. and the Middle East, forged post-WWII with Iran under the Shah and Saudi Arabia, centered on the “Denial Oil” policy against the Soviet Union, have faced criticism on several fronts. Factors including unrecouped expenditures, failure to democratize Middle Eastern governments, high U.S. casualties in successive wars, and diminishing significance following the Soviet Union’s collapse and the 9/11 attacks have all contributed to scrutiny of these ties. Moreover, a significant shift away from importing crude oil from Persian Gulf countries towards reliance on domestic production and neighboring nations like Canada and Mexico has led some to perceive reduced dependence on Middle Eastern energy sources, providing justification for withdrawal policies.

The United States’ withdrawal from Afghanistan was interpreted as a signal of disengagement from Middle Eastern conflicts, especially after its inadequate response to attacks on Saudi Arabia’s Aramco and the United Arab Emirates’ Abu Dhabi airport. Consequently, regional nations have pivoted towards strengthening relations with Russia and China.

Expanding Influence of Russia and China

While the United States faced militia attacks in Syria and Iraq post-ISIS war in 2017, China and Russia significantly expanded their presence in the Middle East’s oil and gas sectors. Under Xi Jinping’s leadership, Chinese oil companies expanded overseas operations, notably in Latin America, Africa, and the Middle East, boosting crude oil and natural gas production. With major American oil operators sidelined, Chinese firms, alongside Russian counterparts, now dominate Iraq’s oil production. China’s strategic partnerships in the region, including lucrative investment agreements with Iran and Iraq, have bolstered its status as the top oil consumer, surpassing both the United States and the European Union.

The deepening cooperation between China and Middle Eastern countries not only ensures energy security for China but also facilitates significant investments in Chinese oil and gas downstream sectors. This has redirected substantial capital flows from Western countries, including the United States. China’s Belt and Road Initiative has further cemented its ties with the Middle East, with a growing number of projects being initiated in the region, gradually increasing China’s presence and influence.

Impact on U.S. Global Interests

While the initial perception might suggest that the United States’ departure from the Middle East could shift regional challenges to China and Russia, abandoning this crucial region, with its significance as both a trading corridor and a source of vast energy resources, could jeopardize U.S. global interests. China’s dominance in the Middle East not only enhances its energy security but also challenges U.S. strategies in energy markets. Moreover, mutual investments between China and Middle Eastern countries bolster China’s economy, a primary target of U.S. economic policies. Additionally, China’s expanding presence in the Middle East could impede U.S. maritime capabilities globally, potentially weakening its position as a global power.

The Last Chance for the United States to Revert to the “Denial Oil” Policy

As the United States hesitates to completely withdraw from a region threatened by violent extremism, local power struggles, and unstable regimes, China continues to expand its influence. China’s growing influence in the Middle East region has the potential to influence U.S. energy policy and foster ties between China and Middle Eastern nations that could benefit the Belt and Road Initiative. This initiative has the potential to bring China to Europe, which is literally in the backyard of the United States. Secondly, the increasing influence of China in the Middle East could potentially affect the United States’ global maritime capabilities and eventually weaken the United States’ position as a global power. Hence, a return to the “Denial Oil” policy appears imperative for safeguarding U.S. interests in the region and beyond.

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  1. H Alexander Ivey

    Upon re-reading and reflection, just what is America’s global interest and position as a global power? Sell complex machinery with their training, like Boeing’s 737 planes? Or military equipment like what is littering the Ukrainian plains? Or our superior strategy and tactics of fighting (ignore the Ukraine fiasco)? Or our moral high ground, city in the hill beacon (ignore the Gaza genocide)?

    1. digi_owl

      More and more it seems to be about skimming a pound of flesh from every transaction by having Wall Street act as the broker of all trade.

    2. eg

      It’s a protection racket on behalf of our plutocrats who have designed the system on their behalf to loot the rest of the world for its commodities and labor on the cheap. That is all.

      1. steppenwolf fetchit

        The rest of the world includes non-plutocratic America of course, including every single “natural resource” left within America.

    3. Altandmain

      Control of the world.

      With US hegemony, most of the rest of the world is not truly sovereign and independent. Take for example something like the recent events in Niger, where the French that have been stealing the nation’s natural resources have been forced to leave.

      In a world with US hegemony, the US and its corporations can loot such nations and can coup the governments that do not betray their citizens in favor of US geopolitical interests at will. In a world where Russia or China can challenge the US, coups like Maidan may simply not be possible.

      Other nations would be able to resist US military power, especially when it is ineffectively spent due to the US military industrial complex bloating everything. We’re seeing that be a drawback with the proxy war where the US is using vs Russia, where the Russians clearly have the upper hand, such as inadequate ammunition. The world would not live in fear of American military power and the US would not have the power that it did for a brief period in the 1990s or that the British Empire had in the 19th century.

      If China has a strong model, people in the US might start asking if we should be more like China, with a strong state sector and government control over the rich. This represents an existential threat to the rich, just as the revolutions in France and Russia once did. The rich are building a return to the “Red Scare” and “McCarthyist” tactics used against China in a bid to keep power.

      Finally, it means that the rich in the US can effectively loot the entire world’s natural resources for themselves. That may be the most decisive driver. Everything the rich have done, from destroying the New Deal using neoliberal economics, to waging these wars abroad, has been for maximizing their own net worth at the expense of the rest of the world.

    4. NotThePilot

      I don’t disagree with anything you said or the other replies about more immediate interests, but for an ultimate reason? I honestly think it’s more of a spiritual sickness than anything.

      I don’t have an entirely clear handle where I can verbalize it exactly, but I think in some ways it’s from a deeper illness that was in European culture for much longer. Then the USA, as the most setter-colonialist of all settler-colonies, with few restraints and an entire continent to run riot across, just takes the sickness to crazy extremes.

      That’s not to put it in totally black-and-white terms either, or say that American history doesn’t have good people doing beautiful things. But there’s definitely a very deep, dark hole in the people here, both as a collective and many individually. And I think everything you see: the addiction to over-stimulation, the blind avarice and cynicism, matched paradoxically by the very loud and insincere religiosity, the compulsion to attack, control, and “punish” others, etc. They’re all versions of lashing out at deep psychic pain.

  2. ISL

    “This initiative has the potential to bring China to Europe, which is literally in the backyard of the United States.”

    Funny, I thought the Atlantic Ocean was in between, and the US backyard (where it plays – and by plays I mean interferes) was Central America.

    Seriously, though, the last chart says everything, and explains why long term, Na Gonna Happen (US re-engages in losing blood and treasure in the sands of the middle east).

    So why is a journalist who has published at an Iranian opposition newspapers (in Iran) arguing the US MUST return to the middle east?

    1. elkern

      A “journalist who has published at an Iranian opposition newspapers” might want the US to [attempt to] return to the Middle East in order to hasten the end of US hegemony. That was one of the main results of the US invasion of Iraq, after all (along with increased influence for Iran).

      A forward-thinking Persian Nationalist might also want to delay the rise of China – which is the only vaguely cogent reason for continued US meddling in the region. IMO, Iran is uniquely positioned (geographically) to gain from China’s Belt & Road, but fears of trading one Boss for another aren’t entirely baseless.

  3. eg

    I think Big Serge’s perspective is influenced by the “offensive realism” school of International Relations (of which Mearsheimer is perhaps the most well known exponent). As such the US would be opposed to the rise of regional hegemons sufficiently powerful to deny US area control.

    Shieklar’s “oil denial” thesis would then be a tactic by which the US would exercise influence and control in the region as part of its “offensive realist” IR strategy.

    1. Susan the other

      Shieklar is a little fuzzy. This thesis is fading into the past very quickly because “denial oil” has pretty much left the barn. Even the Saudis referred to the whole Gaza War as the West’s “Last Chance Saloon.” The Middle East and Russia have vast oil resources, more than enough to supply China for the 21st Century, probably. I can even remember an old argument that oil is not, in fact, a finite resource but is actually produced by geologic forces of friction, etc. The Caspian is obviously still the Prize because it is clearly (to me) the object of our aggression against Russia – but nobody would say the word “oil” even if they had a mouthful. The Caspian has vast resources as well. Recently the North Sea interests have released info about having much more capacity than was assumed. And no doubt other discoveries around the world. Venezuela currently owns the biggest pool of oil. It’s not likely that oil can be effectively denied at all. The far more important question is global warming (or even cooling), hence cooperation reducing use.

  4. Harrow

    Isn’t the Biden Plan to deny oil to Americans, so as to sell it elsewhere and pocket the difference?

    The strategy of cutting us off from natural gas to liquify it and mark it way up to substitute for cheap Russian gas, seems to have a setback or two, see Ninth Circuit overturning gas stove and appliance ban. Now no more LNG plants…the best laid plans of Mice and men.

  5. jrkrideau

    While I believe your analysis is correct, I am not sure that I believe that the US Gov’t establishment grasped this. If we remember the famous “Russia is a ‘gas station masquerading as a country” it does not make us really confident in the quality of US intelligence analysis. Or rather, the US Establishment’s ability to comprehend US intelligence Analysis.

    As Mr Obama confidently said, “Russia doesn’t make anything”.

    M K Bhadrakumar in a post in Feb or early March, 2022 (which I cannot find) pointed out that the West (meaning the USA) instituted sanctions without a clue about the actual Russian economy or its many key exports.

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