OIL AND THE FUTURE OF U.S. STRATEGY IN THE PERSIAN GULF

Will the so-called “shale revolution” allow the United States to disengage from the Persian Gulf? A rich body of scholarship argues that since the United States no longer depends on imports of Gulf oil, it can extricate itself from the region militarily and even disengage politically with minimal negative repercussions. The United States cannot, in fact, afford to radically downsize its footprint in the Persian Gulf in the immediate future.   

The staggering growth in U.S. shale oil production in recent years should not obscure the fact that the Gulf still possesses half of global reserves — something worth recalling in the wake of the Trump administration’s decision to stop giving other countries waivers to purchase Iranian oil. It is unclear which region besides the Gulf can quickly replace the 1.9 million barrels per day Iran exported before the re-imposition of U.S. sanctions. It is unwise to think that U.S. oil exports can stabilize global markets. Recent boasts of America’s “energy dominance” are beginning to ring hollow due to fears that geological factors and the ebbing of cheap financing for small shale companies may soon stall U.S. production growth. Small shale firms are losing ground to larger, vertically integrated companies more interested in boosting profit margins than production rates. 

Until the world can make the necessary transition to a post-hydrocarbon economy, preserving access to Gulf oil will remain one of the pillars of U.S. predominance — even if the United States never consumes a single drop of oil from the region. To understand why, we must grasp that the United States did not get involved in the Gulf after World War II because it needed the region’s oil for U.S. consumption. Rather, the aim was to guarantee access for U.S. allies and companies supplying foreign markets. Then, as now, energy independence was of secondary importance — what mattered more was building an international system that delivered widespread prosperity and security. Today, the question worth asking about U.S. strategy in the Gulf is not whether Americans still need the region’s oil, but whether they are still willing to serve as guarantors of the complex international oil market that, in many ways, underpins the postwar international order.

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