Oil And The Political
Economy Of Terrorism
By Mathew Maavak
21 April, 2006
Crude oil has breached the $70
psychological barrier again. This time, however, it will not be a one-day
seduction by the stormy Katrina.
The causative culprits are
Terrorist have taken out
25 per cent of Nigeria's sweet crude since late February and the daily
joust between Washington and Tehran is providing splendid returns to
those who had invested in oil stocks. For these savvy investors, there
will be enough gas in the tank during the peak summer driving season.
Than there is that 10.2 per
cent growth registered by China, announced very conveniently before
President Hu Jintao's scheduled meeting with his US counterpart George
W. Bush. China's booming growth can only be greased by a harder-to-pump
oil. The alternatives are stark. If the Chinese bubble gets pricked,
the global economy suffers, US corporations may need higher tax cuts
- or even subsidies - and Americans will finally need to trim their
That would be Hu's sales
pitch but Bush may opt for a more risky oil
prospecting venture. This time, the failed former Texan
oilman may succeed, and ignite enough fires in an energy-strained world.
It is high noon for those
prospecting for maximum oil returns. Even the types not usually associated
with Wall Street, rocket science and deficit spending are glued to Bloomberg's
running crude oil tickers by the minute.
The objective is the lucky
strike. Peak Oil is forming a strategic fit with Peak Terrorism.
For a synoptic glimpse into
the future, read this excerpt from New York Times' April 16 article
headlined "Blood and Oil":
Just as things seemed
to be calming down in the delta region of Nigeria after a spate of kidnappings
and insurgent attacks, the militant group calling itself the Movement
for the Emancipation of the Niger Delta — MEND — announced
last week to all who would listen that it was planning new violence
against oil facilities in the region. Apparently unconcerned about tipping
its hand to the authorities, MEND even gave a date for the start of
its new campaign: April 25.
That date is perfect! These
guys are more financially savvy than stuffed suits who have hedged their
future in a world where oil never existed. D-Day in the Niger Delta
is just 72-odd hours before the UN Security Council meets to unleash
a little fission over Iran's nuclear enrichment program.
Crude oil at $80 per barrel
on April 28? Who knows?
If a rag-tag bunch of militants
in Nigeria are accurately reading the tea leaves in an oil-brimmed cup,
imagine what Al Qaeda and the pan-global martyrs of terror have in store?
There is a greater lead-filled
premium now for oil-related and economic targets. In a business-speak
twist, collateral damage can be applied to the unlucky rejects in a
fire sale transaction.
You can bet your every last
dime that terrorists are ready to throw their explosive spanners into
the machineries of global trade. They know the drill. There is tremendous
potential here to cause pandemonium and cross-border tensions. Targeting
energy infrastructures will be far more efficacious and less opprobrious
than the indiscriminate slaughter of civilians.
Why assassinate politicians
or shoot a GI when mobs - deprived of their daily bread - can do more
in aggregates and derivatives? In layman's terms, we are talking about
riots, sit-downs, union strikes, looted stores and political mayhem.
Economic targets offer the best returns with less risks. Stock markets
will be depressed, inflation will set in, bankruptcies will proliferate,
and people will starve.
The concatenation of financially-induced
social upheavals has been witnessed before - across continents - during
the currency crisis of the late 90s. Unless checked, wars are the inevitable
culmination. There are no IMF prescriptions for dwindling oil reserves,
busted pipelines and electricity blackouts.
Call this the political economy
of terrorism, but apart from Iraq and Palestine, terrorists will increasingly
focus on the conveyor belts of finance and trade. There is no shortage
of targets for disgruntled elements worldwide. There are Maoist guerillas
in Nepal, ethnic insurgents in Burma, Al Qaeda-inspired militants in
Islamic nations and assorted purveyors of violence in every nook and
corner where there are power plants, ports, retail stores, trading depots,
factories, banks and transborder pipelines. Mundane industrial structures
- particularly those connected to oil - have attained value-added targeting
than shoppers at a marketplace. A suicide bomber might as well "walk
the last walk" into a minor, provincial bank than into a crowded
souk. Planting midnight bombs at ATMs in a major city entails little
or no bloodshed, though, it may douse seasonal fire sales the next morning,
not to mention the lack of change for lunch. Ever noticed the anticipatory
or frustrated month-end file of workers at ATM kiosks short on notes?
A little inconvenience can
go a long way in disrupting normal routine, and no nation can provide
complete protection for these mundane cogs of human activity.
Terrorists switching to the
political economy side of their trade can expect other windfalls. Destroying
the perceived icons of (Western) imperialism elicit less disgust - and
perhaps sympathy - than the televised butchering of individuals. Suicide
bombings that shred innocent limbs at a discotheque and net relayed
beheadings of infidels reek of bestiality. Why kill a Daniel Pearl when
you can play Che Guevara?
But is this happening?
There were strong hints emerging
The Niger Delta attacks offlined
production amounting to 550,000 barrels per day, rendering the affected
Royal Dutch Shell installations immobile till today. What was untouched
was probably left for April 25. Almost simultaneously, violent protests
in the Ecuadorian province of Napo forced state oil firm Petroecuador
to halt supplies through its Trans-Ecuadorean pipeline.
Both incidents raised US
crude oil futures by $1 overnight. It has since risen by more than $10
dollars - a safe median figure used by commentators without an MSNBC
or Bloomberg ticker on their offline notebooks.
In Iraq, while bombs routinely
kill civilians, little has been noted of pipeline sabotages, stretching
from Kirkuk to Bayji to the Turkish border. Restoring normal output
may take up to a year. And that's a big hypothetical "if"
with Iraq in a state of disintegration. Think of the hundreds of thousands
of miles of exposed pipelines around the world, and the cumulative number
of years needed to repair them? If Iraq's oil and its pipelines can
energize the current sectarian war, couldn't that be replicated in places
simmering with ethnic and social tensions? Expect authoritarian governments
to manufacture terrorism for the perpetuation of power. If you regard
the USA PATRIOT Act as draconian, you haven't seen the world yet!
Any bomb anywhere can be
pinned on "terrorists" and sifting the real from the manufactured
would be next to impossible with censorship laws established to prevent
the transmission of coded communications. Sounds familiar?
It would pose no barrier
to the Real McCoys, however. Terrorists - separated by ethnic, ideological
and religious motivations but united by calculated anarchy - have learnt
their economic primers on the go. It is the most potent weapon in this
age of Peak Oil.
Neither the brotherhoods
of anarchy nor coded messages are needed to set action time. The daily
business headlines will do.
While oil traders were still
risk managing the outage from Ecuador and the Niger Delta, militants
in Saudi Arabia attempted to blow up the world's largest oil processing
complex in Abqaiq on Feb 24. If they had succeeded, there would have
been a double digit increase in the price of crude in 48 hours. It could
have also precipitated social anarchy in a land seething with repressed
anger against the Al Saud monarchy. Under such a scenario, repair works
at Abqaiq would be next to impossible, oil would shoot to above $100
per barrel, and a vortex of violence would spiral to engulf much of
the world. Remember, society is only three meals away from anarchy.
As tensions rise by the day
over Iran's nuclear enrichment program- and it's not only Iran - pipelines
and economic targets are easier pickings vis a vis heavily-guarded political,
military and constabulary bastions. Call this risk management on both
sides. Governments will prioritize security for the levers of governance
and power; terrorists will probe and prioritize valuable, less-guarded
targets to trap security apparatuses in a game of musical chairs. This
will leave a gap for political targets sooner or later. It's an old
trick with new destructive possibilities in a world peaked of oil.
Terrorists can also conflate
ideological mileage with financial aggrandizement. This was demonstrated
during the days leading up to the Sept 11 attacks. Unusually heavy transactions
were noted on airline stocks in the hours and days leading up to the
fateful incident. The yet-to-be-proven suspects were Osama bin Laden
and Al Qaeda. This gives a new twist to the maligned practice of "insider
trading," and it ingeniously raises capital for further terrorist
ventures. Non-ideological players like organized criminal gangs and
state actors would have taken note. Each day, violence permeates our
airwaves, are regurgitated on news clips, and are headlined on our dailies.
The real dangers of terrorism can be manipulated and faked by the religious
devotees of Mammon.
Blames can fly in all directions.
Terrorists, after all, are
the dernier cri bogeyman of our times. They can - advertently or not
- create political and financial capital for powerful entities. The
terrorism shill also provides a Trojan Horse for state actors to destabilize
a hostile nation. In this high-octane world of dwindling mineral resources,
"terrorism" might be the spark - and later a sideshow - for
outright inter-state conflict. Wars are dictated by the primacy of economics
while ideologies serve to rouse the masses.
The most tindery powder keg
right now is Iran. It's not just hedge fund managers and investment
gurus who are bracing for the worst, or the best, depending on one's
philosophy. There is money here for Armani-clad entrepreneurs and coups
de grace for ski-masked individuals.
If Iran burns, or if neighboring
Iraq descends further into anarchy, expect scattered strikes against
oil installations, ports and power plants the world over. There will
be more trouble in Nigeria and Ecuador. Hotspots will get
hotter with conflicts spreading far and wide. With so much
happening, renewed conflict in little-known Chad - among the five poorest
nations in the world but one with a billion in crude reserves - may
not blip on our media radar.
of March have passed and it has left us with bad omens
for the coming months. The game of energy geopolitics is taking new
turns and uncertainties, including the option of a tactical nuke attack
on Iran's Natanz, Isfahan, and Bushehr complexes. If Iran gets hit,
the anti-American Venezuelan President Hugo Chavez may deliberately
divert oil supplies to nations like China, depriving the US of 15 per
cent of its oil imports.
Highly unlikely but there
are other variants to this game.
Al Qaeda may bomb targets
within Iran, and blame it on the United States, or it could sink a few
tankers in the Straits of Hormuz and blame it on the Persians. Neither
the United States nor Iran need to fight in a best-case scenario - if
an extraneous culprit can be identified and a standoff reached in time.
A Straits of Hormuz blocked by sunken tankers either way will immediately
reduce global oil supplies by 20-25 per cent per day. Perhaps more,
depending on which estimates you have been reading.
The United States, after
all, has the largest strategic petroleum stockpile in the world, and
its powers would be aggrandized through this energy buffer. Is that
good news? Well, should US soldiers die in a Middle East artificially
contrived and subverted by Britain? Cut a deal with Tehran! After all,
Iran might have been a US partner today if not for Winston Churchill.
The CIA only stepped in later, in 1953. The tussle started over the
Anglo-Persian Oil Company, which no longer exists by that name, but
the bone of contention has gone on to include tactical nukes.
Like changed names, the United
Kingdom's role in global subversion has been well-masked by Uncle Sam's
Trust the Brits to ramp up
their global terror machine again and expect Uncle Sam to receive the
annual rogue superpower award. Expect a scramble for oil worldwide,
providing targets of opportunities to militants, criminals, and state-sponsored
terrorists. When this happens, the current national and international
structures would be blown out of shape.
Within this nightmare world,
ordinary folks would gladly welcome some order, or a New World Order.
That plan was readied long back - lock, stock and barrel. Long before
the United States of America came into being!
Welcome to the year when
the artifice of civilization begins its slide into a natural state of
is a Malaysian journalist and a recent visiting fellow at Jakarta's
Centre for Strategic and International Studies. He was trained in psychological
warfare, propaganda, crisis management, media crisis and security-related
issues at the University of Leeds, United Kingdom. Contact him at email@example.com
Originally drafted in early
Copyright @ Mathew Maavak