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Washington Turmoil Roils Global Oil Markets

Washington Turmoil Roils Global Oil Markets

Turmoil in the United States…

Gregory R. Copley

Gregory R. Copley

Historian, author, and strategic analyst — and onetime industrialist — Gregory R. Copley, who was born in 1946, has for almost five decades worked at…

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The US Finds its Superpower Structure and Capital are Insufficient to Cope with a Transformed World

The United States of America, in global strategic terms, is tumbling down a series of misadventures, declining in a “step of sighs” through frustrating economic and military endeavours as it discovers that its superpower structures and massive capital wealth are insufficient to cope with a transformed world.

This transformed world was created by the very superpower capabilities and massive wealth of the West. Even the People’s Republic of China (PRC) is beginning to recognize that massive financial holdings are inadequate to address all challenges to national survival and wellbeing.

The question is whether this current process through which the US is going must inevitably be played to a conclusion which sees the US itself — as the Roman and Hellenic and Mongol and British and Netherlands and Soviet empires once were — broken apart or reduced to modesty among the ruins of grandeur? It is not. Nothing is written which cannot be re-written.

The Russian Federation’s grand strategic growth began only with its recognition that it was forced, with the death of the Union of Soviet Socialist Republics (USSR) in 1990-91, to put aside the pretensions that it had been a superpower. The defeat of the USSR-led bloc by the US-led bloc which determined the end of the Cold War engendered in Moscow the deep reflections and reorganizations which only defeat can bring. Russia, with this realization, was able to revive the strategic momentum which had been thwarted by the 1917 Revolution.

The West, and particularly the United States after the end of the Cold War, wallowed in a condition even worse than defeat. It wallowed in victory.

With defeat comes the ability — indeed, the license, mandate, and demand — to sweep out failed or obsolete institutions; to scour out the sclerotic accumulation of laws and bureaucratic procedures; and to purge the perpetuation of the kind of strategic insensitivities which had led to defeat. With victory, no such license is granted, and the presumption of superiority reinforces and compounds ancient structures. It does, however, reinforce the thinking and architecture which had led to victory. Further, victory it leads to the excesses of those who ride to power on the exhausted backs of those who, in fact, had created the victory.

Those who conceive, manoeuvre, and shed blood or risk careers for success are never those best suited to the shallow machinery of managing success when it has reached a plateau of self-satisfaction. But success is never able to be sustained if it is only “managed”. This is one of the lessons of The Art of Victory. Thus, the desire by the US to see itself not merely as the “sole surviving superpower” in the post-Cold War period, but to also see itself as the superior of its one-time allies, merely compounded the widespread Western view after 1991 that effort, creativity, alliance teamwork, and the humility of the threatened were unnecessary. It led to the belief that “the peace dividend” of victory could be spent recklessly, and forever, without heed.

Thus, in relative terms, post-Cold War, Russia and — in a different fashion — the People’s Republic of China (PRC) learned, re-organized, and began the process of rebuilding their societies, less hampered by the earlier constraints of state structures. They prepared for a new world, and acted accordingly. They learned from history, ancient and recent. The West — but again, particularly the US — engaged in no such introspection; did not bow to the humbling workload of reconstruction; and was left hidebound by institutions which had acquired the towering and massive strength of fortifications built for a war long past.

The West — including the US — is now in the hands of managers who know nothing of what it took to built Western values, institutions, methodologies, and wealth. They preside over populations increasingly ignorant of those values, and this suits the managers. The education systems created by the managers, displacing the pride and identity of the earlier warriors, reinforce ignorance of the real underpinnings of success, and, in fact, success itself is despised because there is no comprehension of what failure can bring. They cannot even observe the lessons which the Russians post-Cold War, or the Egyptians post the 1967 Six Day War, were forced to learn.

Wealth and identity, while being built, demand absolute self-awareness, discipline, and a constant understanding of context. Wealth, when it is being spent, is blind to everything but self-gratification. I once called this “the Saudi disease”: I am wealthy, therefore I am smart. It is now the Western disease. And the West will continue its decline until it has sunk so low, spent so much, that it is forced and humiliated into self-review. Even alcoholics — those who admit their condition — are aware of this phenomenon.

So what, then, are the options for the West, but particularly the US which was, until recently and briefly (for less than a century), primus inter pares among Western nations?

Any fundamental assessment of US goals, capabilities, and options must be conditioned on external realities which provide the context for any US aspirations. The nature of global rivalry has changed dramatically in the two decades which followed the end of the Cold War. This is not surprising. The entire global framework transformed in just two decades following World War I, and again in the few decades following World War II. Given the compounding pace of scientific and technological growth which began following World War II, what is, in fact, surprising is that the new global framework took so long to emerge, haltingly, from the mists of the swamp in which it has incubated.

It was postulated that the clearing of the post-Cold War mists would reveal a Pacific Century, an age dominated by China. Indeed, China may well continue its rise in strategic terms, but, equally, it is plagued by a legacy of challenges, particularly if it is to meet the growing expectations of its population. In any event, the Pacific Century was, arguably, the 20th Century, which gradually emerged as the Atlantic Century played out. But the rise in one region does not necessarily mean that others fail to rise. Just as the Atlantic era blended with the Pacific era, so the Pacific age blends with the emerging Indian Ocean age, and all — Atlantic , Pacific, and Indian oceanic regions — are inseparably bound, along with the fortunes of the heartlands.

If anything, the revival of the Great Silk Route binding together — finally — Europe. Asia, and the Middle East and Africa, spells the vital importance of all the oceanic aspects. In this regard, the Indian Ocean region, which enabled US projection into Arabia, Iraq, Afghanistan, and Central Asia, has long been ignored, and seen only as a transit zone for extra-regional powers. That is now ending.

The Indian Ocean is a complex strategic theatre in its own right, and, with the Pacific and Atlantic in many ways already strategically “defined”, it is the one dynamic zone which can affect the global place of the great powers. It is one of the few fields of manoeuvre left open.

What it means to the regional inhabitants is one thing: the Indian Ocean is home to 48 littoral and dependent states, reaching up into its subsidiary seas and gulfs, and to a third of the world’s population. Indian Ocean states had, in 2007, a combined gross domestic product (GDP) in excess of $4-trillion.

What the Indian Ocean means to out-of-region powers, such as the US, is something else: it is a zone of transit; it is a zone which enables access to markets and resources. It is also one of the few dynamic zones through which alliance-building, or strategic spoiling, can have global ramifications.

The US has in Cold War and post-Cold War years viewed the region through different prisms, and never as a strategic whole. Moreover, it has in post-Cold War years viewed it mainly through the priority of land power projection. Its principal military thrusts into the region have been via the ground-force-dominated Central Command (CENTCOM), or the new, “soft” prism of African Command (AFRICOM), which has yet to find a means of actually functioning meaningfully in Africa. The US Navy, through what is now Pacific Command, has made side adventures into the Indian Ocean.

Now, however, the Indian Ocean demands greater attention because of its inherent resource wealth, growing markets, and the reality that it is integral to both the revived Great Silk Route, and the evolution of “the Great Silk Sea Route”, as this writer has termed the Indian Ocean’s increasingly complex transit trade.

Moreover, with the decline in on-the-ground influence in the Northern Tier coming to a head with the US retirement from Iraq and Afghanistan, the US has little option but to rebuild its regional authority and power not on CENTCOM, but on the US Navy’s capabilities and historical legacy — minor though it is — in the Indian Ocean. The only presence which the US can maintain with any degree of authority and independence is its sea power.

The process, however, is complex, and the frameworks of alliances and competitors are no longer clear and simple. The Indian Ocean exemplifies the emerging nature of the global strategic pattern, in which friends and competitors are often the same nation-states; in which alliances may of necessity be restricted to shorter timeframes than in the past, or may be restricted to certain key issues. Friends will, more than ever, need to understand that they can disagree on some issues and yet remain allies.

Within this, the Indian Ocean is a major key to accessing and influencing Russia’s dominance of Central Asia, the Middle East, and parts of Africa. The Indian Ocean is, perhaps, the principal dynamic key to China’s strength, because competition in the Pacific is less critical — or perhaps less likely — to influence or concern Beijing. For India itself, the biggest single littoral economy and military power in the Indian Ocean, the choices are emerging more starkly.

India is, unless it radically alters its policies, faced with being marginalized to being a strictly Indian Ocean power; literally one in the Alfred Thayer Mahan model of a sea power state. While this would be significant, it would waste India’s potential role as a Eurasian land power state — a “heartland” state, as Sir Halford Mackinder’s strategic philosophies would have it — and make it vulnerable to the growing heartland power of the Shanghai Cooperation Organization (SCO) states, dominated by the Russia Federation (RF) and the PRC. Thus, to be successful, India needs to ensure that it becomes a combination sea power and heartland power, with the ability to both dominate the Indian Ocean from a maritime sense, and access and influence the wealth and trade of the heartland Central Asia.

To achieve this combination, India needs to gradually expand its relations with the great sea power capabilities in the Indian Ocean of the other major Indian Ocean powers (Australia, and, ultimately, Iran), and the United States of America. This would enable India to preclude dominance by the PRC’s People’s Liberation Army Navy (PLAAN) and any — as yet minimal — RF Navy resurgence in the region. Thus, the Indo-US strategic link must be expanded if New Delhi is to retain any global leverage.

However, and in superficial contradiction, New Delhi cannot become a player in the SCO’s heartland unless it allies itself, yet again, but with greater depth, with Russia to find a way into Central Asia. This would give it a measure of security against the PRC’s growing dominance of regional trade and pipelines across southern Central Asia and into the Northern Tier states of Iran and Afghanistan. Indeed, it needs Russia to help provide the geopolitical linkages into Central Asia, but at the same time must find a way to enjoy direct access to this region.

At present, the great impasse is the geographic and strategic linkage enjoyed between the PRC and Pakistan, and this is absolutely vital to Beijing. In Gwadar (linked via the PRC-funded Karakoram Highway across the mountains), the PRC sees the ability to use the Pakistani Baluchistan port as a terminus and hub into the East-West maritime trade, feeding raw materials into China from ships which have traversed the Indian Ocean from the Middle East and Africa. It will also become a means of exporting some Chinese product to Europe (potentially) through Gwadar to ships which would then transit the Indian Ocean and its subsidiary sea, the Red Sea, and through Suez to Europe.

This would give the PRC the ability to avoid the chokepoints of South-East Asia, particularly the Malacca Strait, which could be used to hold China to ransom. Even the Western Australian mineral and gas exports to the PRC could, conceivably, be partially re-oriented in their shipping routes to feed into pipelines and road transport from Pakistan’s Gwadar port up to the Western regions of the PRC as the logistic chain develops.

The PRC’s nurturing of stability and investments in Afghanistan, seen in the longer term and post the US/Coalition withdrawal from that country within the coming year or two, not only fits with Beijing’s expansion of commercial and supply interests deep into Central and South Asia, but also gives strategic depth to Pakistan in a way not seen since the Iran-Afghanistan-Pakistan linkages during the era of the Shah of Iran in the 1970s.

In addition to this, of course, the extensive and accelerating development of rail and other links from the PRC border down through Myanmar has been achieved by Beijing while the West has, in its moral piety, “sanctioned” Myanmar. The PRC, in fact, has moved to eliminate its dependence on the South-East Asian straits as its means of securing its trade with the Middle East, Africa, and Europe. It has begun developing a framework of linkages via (i) the overland northern Silk Route via Russia; (ii) the lower Silk Route via the Caspian; (iii) the overland linkages through Myanmar; (iv) the links through Pakistan, to subsequently embrace Afghanistan; and (v) through gradually growing links through Iran, to both the Indian Ocean and through Iran to Armenia, Turkey, and the Black Sea Basin into Europe.

Within all this, the US is losing its once-tight grip on the northern Indian Ocean states, including those in the Persian Gulf annex of the Indian Ocean, simply because it cannot sustain its land and air power presence in a meaningful way there. The future US maritime projection into the Ocean must be substantial, in order to show presence and therefore invoke influence, and yet it cannot rely on the same static array of bases which it once enjoyed as a legacy of assuming control of the former British sphere of influence.

The US, then, must view the Indian Ocean in its entirety, something which it has not yet done, having preferred to view the Middle East, South Asia, South-East Asia, and the Horn of Africa as somehow separate and unrelated areas, and areas totally removed from any relationship with South Africa and the Cape of Good Hope sea route (on the one hand), and Australia, in the South-East Quadrant — the Empty Quarter — of the Indian Ocean (on the other). Even the modest shift in mainstream US strategic thinking toward the Indian Ocean, exemplified by US author Robert Kaplan’s report in Foreign Affairs journal of March/April 2009, sees “the Indian Ocean” as the northern portions and in fairly traditional “arc of Islam” terms, for example.


To achieve its Indian Ocean goals, and to be a player in the “New Great Game” for Central Asia — having decisively lost the old “Great Game” to Russia by 2009 — the US will need to rely far more heavily on Australia as a maritime partner in the Indian Ocean. However, Washington will need to recognize that Australia, as the second most wealthy Indian Ocean state (and by far the wealthiest of the big states on a per capita basis), has its own delicate web of balanced interests with the PRC, India, Pakistan, South Africa, and the Middle East over a variety of trade, sea route, and other issues. Australia, both psychologically and strategically, cannot be “deputy” to the US’ “sheriff” in the region; its partnership with the US on Indian Ocean maritime issues must be delicate and balanced.

Australia, with its potential to offer home porting and fleet support to a US Navy presence in the Indian Ocean, is the key to US reinvigoration of its global role and re-entry into the Eurasian Great Game. On the other hand, if Australia must go it alone in the region, then it must. Its 2009 Defence White Paper highlighted the ongoing importance of the US-Australian alliance, but also the criticality of the need for Australia to develop totally independent security arrangements within the Indo-Pacific realm.

Indeed, the sophistry and legacy paternalism of Washington’s view of the Indian Ocean will need to give way to a more realistic and partnering approach to the region, particularly with Australia, quite rapidly if the US is to retain any momentum at all in the Indian Ocean, rather than suffering — as Britain did in 1964 — a downward spiralling erosion of influence and capabilities. The regional dynamic is such that Australia is reaching a point where, if the US does not partner with it on more or less equal terms in the Indian Ocean, then Australia will build other arrangements.

Australia is already at a point where it has recognized the need for independent intelligence capabilities and assessments on the Arabian Peninsula, the Northern Tier, and the Horn of Africa, as well as, of course, South and South-East Asia. There has been a growing realization that US assessments on, for example, Iran and Pakistan, or even on the Arabian Peninsula, have been undertaken through a prism of Islamist terrorism and oil, and this is too transitory and too narrow a focus for a country such as Australia, which is embedded into the region.

The US faces a situation, in the immediate term, in which its leadership wishes to disentangle as much as possible from all foreign engagements (certainly from Afghanistan and Iraq, seemingly regardless of the consequences for the region), and the necessity to divert funding away from defense and military operations to meet debt service and domestic social expenditures. It will, in other words, need to do more with less, if it is to sustain any sphere of influence. CENTCOM and AFRICOM can, and probably will, go some way into hibernation; PACCOM (Pacific Command) will become, even more than before, the major US force structure. There will probably be no stomach, or budget, in Washington to create a new Indian Ocean Command, and it would not, in any event, be ideal: the Indian Ocean has for too long been treated as “separate” by US planners.

The necessity will be for PACCOM to engage more strenuously in Indian Ocean deployment, both as a means of “showing the flag” and retaining influence through semi-soft projection; and also as a means to counter or balance or partner with the growing regional military capabilities of Indian Ocean states and other out-of-region states, such as the PRC.

Iran , largely because of a series of missteps by the US beginning with the removal of the Shah by US Pres. Jimmy Carter in 1978-79, will be a formidable and dominating power over Persian Gulf/Arabian Peninsula energy exports within a short period, unless the clerics’ rule collapses (which now seems unlikely in the short term). The US can only hope to rebuild a measure of credibility as an ally to its regional allies, such as Saudi Arabia, Qatar, Kuwait, the UAE, and Oman, and it can now only do this delicately, given the vulnerability of US military assets in the region (including naval). But absent that effort by the US, it will eventually lose its great access to Middle Eastern energy and markets, because others are already on the ascendancy in the region.


A variety of outcomes are likely in the Indian Ocean region, insofar as they affect the United States. They include (but are by no means limited to) the following:

1. The United States will, by virtue of its economic condition, be forced to reduce its global military presence, and find new means of exerting its influence. This will inevitably place new demands on its diplomatic and intelligence capabilities, which will need to be attuned to the need for creativity as a replacement for sheer strength of national military capabilities;
2. There will be a significant growth by the US, because of the decline in ground and air military assets, in the use of maritime projection as the most economic form of military diplomacy. This will place new burdens on the US Navy at a time when it’s comparative technological advantage over major (and some minor) foreign navies will decline. In an age when the carrier battle group retains some utility, but increasing vulnerability, there will be much more manoeuvre and diplomacy required from US naval projection, and no zone will be more challenging than the Indian Ocean region. At the same time, the US Navy has no ideal Indian Ocean basing arrangements which can fulfil the needs: Diego Garcia is sound for refuelling and rearming, but not for major fleet repairs or crew leave; Singapore has proven to be of limited viability, and Singapore itself has been reluctant to go too far in allowing USN basing; Vietnam, in the Pacific, may be supportive, but this does not help in the Indian Ocean. What this all gets down to is that the Royal Australian Navy (RAN) facility at Garden Island, south of Fremantle, may be the best support base for the USN in the Indian Ocean;
3. The US reach into the Middle East and Indian Ocean will be limited (because of budgetary constraints) by reductions in the real elements of power projection: aerial refuelling tankers, and heavy troop and armour transport aircraft. This will shape the kind of engagements which the US can consider going forward, even post-Obama;
4. The US will be a vital ally to India, but must recognize that India cannot afford the need to return to a solid strategic alliance with Russia, simply to re-engage into the Eurasian heartland;
5. The US, through recent discreet diplomacy, has ensured the longer-term survival of the Iranian clerics, and must now contend with the reality that Iran will project more deeply into the Indian Ocean region, but particularly (in the short-term) into the Arabian Peninsula through an expansion of the proxy challenges which Tehran is now raising there: the “Islamic Republic of Eastern Arabia”, the Yemeni-Saudi conflicts now underway, and so on. As well, Iran’s hand in the Horn of Africa is being extended, and pro-US states in the region (such as Ethiopia and the Republic of Somaliland), are justifiably fearful of the reality that the US and NATO will fail to support them. The December 2009-January 2010 moves by the US Obama Administration and UK Brown Government to provide funds to Yemen to combat the insurgencies there only reinforce regional beliefs that the US and UK are in no position to actually provide military and political strength to challenge Iran in the Peninsula;
6. The US can benefit from enhanced relations with the Indian Ocean littoral states. It has hardly considered, for example, planning a cooperative Indian Ocean maritime complex of actions which engage Egypt, Israel, a revived Ethiopian Red Sea presence, the use of the Republic of Somaliland, and so on, in the North-West Quadrant of the region; or of South Africa-Australia maritime linkages. The options are many. Even the US-India military relationship, which has expanded, has not included a significant maritime element. The US-Pakistan maritime relationship has itself not been really studied in light of the broader framework which must include the Pakistan-PRC relationship.

These are basic thoughts. But a variety of creative options begin to open up if the US, faced with economic and political constraints, addresses the new era in which creativity will be needed to replace budgets.

Analysis. By Gregory R. Copley, Editor, GIS. for OilPrice.com - the no.1 source for oil price information

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  • Anonymous on January 12 2010 said:
    I thought the US navy also had ready access to port facilities in Djibouti...
  • Anonymous on January 13 2010 said:
    Thank you. Excellent article - level-headed and clear.
  • Anonymous on January 14 2010 said:
    Very good analysis.

    How often does Copley write?
  • Anonymous on January 15 2010 said:
    Copley usually writes a couple of articles a week - but you will soon be able to get daily updates of this quality when we launch our FREE daily Intelligence Newsletter next week.
  • Anonymous on February 16 2010 said:
    Great analysis and a lot for everyone to consider. Regarding U.S. power projection in the Indian Ocean, Diego Garcia will ensure that for the forseeable future there is a friendly and well defended supply base for the U.S. in the region.
  • Anonymous on April 23 2010 said:
    I don't think Diego Garcia really matches up with a Large US Base in Australia, for the Navy boys, they will do nuts with bordem, and rember it is still offically UK territory.
    China will push back against, and has the Australian economy under its whim, that the US will have problems convincing Kevin Rudd that any expansion in Western Australia is a go.
  • Anonymous on April 23 2010 said:
    Gregory R. Copley is quite obviously -well educated. Many will be impressed. I am not.

    It is Copley's Kissinger-like militarist-geo-political-economic view of the world, forced by his narrowly-focused education -that are his perspective-blinders. If Copley lacks having read something for a clearer view of what it is he is pretending to understand, it is the more dated views of the older texts he has over-looked, and, even the ancient views.

    The Roman Empire did not end when Caesar was slain.

    The reality with which we all must contend is infinitely complex.

    Copley fails in the typically empirical fashion of today -to account for and place his view against this overwhelmingly-complex-backdrop-of-reality against which all such views, and especially such dated-views as are his, must be always and will always eventually be placed by events as they unfold for these common alchemist-like pundits.

    There is no equation that allows anyone to predict the future, except as we might say that it is impossible to predict. That we know for sure.

    When Copley's far too eloquent views are thus viewed -against this massive backdrop of complexity-, it is clear, he's but a common empirical-shaman predicting a future for which his modest comprehension of the infinitely complex reality that undermines all such predictions lags far behind the entropy of our endless surprise about the future -as it unveils itself- unfettered by the antics of such prognosticators and fortune tellers as abound in every era.

    Read more dated predictions of the past, Mr. Copley, to better understand your own predictions. You are in the company of rank fools.

    Don Robertson, Limestone, Maine
  • Anonymous on July 24 2011 said:
    "The US, through recent discreet diplomacy, has ensured the longer-term survival of the Iranian clerics""Discreet diplomacy?" What a nice term for failure.I was expecting to see the need for an economic engine, instead of the old military engine, to be the key to prosperity in this century somewhere in this rambling essay. But no.China didn't become an economic force because of its military power. They sell to the world. That's how they are in the position to finance the out-of-control spending/debt of the United States.Where oil and energy are concerned, we can sell to the world too if Washington would allow itself to become oil producers instead of oil buyers. The subsequent drop in energy cost, along with ending using food for fuel (ethanol) will be the jump-start for our economy and the world's economy.

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