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Protecting “The Prize”: Oil and the U.S. National Interest

2010; Taylor & Francis; Volume: 19; Issue: 3 Linguagem: Inglês

10.1080/09636412.2010.505865

1556-1852

Eugene Gholz, Daryl G. Press,

Natural Resources and Economic Development

Abstract American national security policy is based on a misunderstanding about U.S. oil interests. Although oil is a vital commodity, potential supply disruptions are less worrisome than scholars, politicians, and pundits presume. This article identifies four adaptive mechanisms that together can compensate for almost all oil shocks, meaning that continuous supply to consumers will limit scarcity-induced price increases. The adaptive mechanisms are not particularly fragile and do not require tremendous foresight by either governments or economic actors. We illustrate these mechanisms at work using evidence from every major oil disruption since 1973. We then identify the small subset of disruptive events that would overwhelm these adaptive mechanisms and therefore seriously harm the United States. Finally, we analyze the utility of U.S. foreign military policy tools in addressing these threats. Our findings suggest that the United States can defend its key interests in the Persian Gulf—the world's most important oil-producing region—with a less-intrusive, "over the horizon" posture. Acknowledgments Daryl G. Press is associate professor of government at Dartmouth College and coordinator of War and Peace Studies at the John Sloan Dickey Center for International Understanding. The authors would like to thank discussants at Harvard University's Olin Institute, the University of Exeter, and the International Studies Association and American Political Science Association annual meetings, and the Security Studies anonymous reviewers for their helpful comments. Editor's note: Richard Betts served as the Editor in Chief for this submission; William Wohlforth, Keir Lieber, and Eugene Gholz recused themselves from the process. Notes The Persian Gulf is home to four of the ten leading oil producers: Saudi Arabia, Iran, the United Arab Emirates, and Kuwait. In normal times, Iraq would be on the top-ten list as well. The region is also unusually important because Gulf oil producers are the world's biggest exporters and because these countries typically hold the most spare capacity at any given time. U.S. Department of Energy, Energy Information Administration (henceforth cited as EIA) publishes data on production levels at http://www.eia.doe.gov. Council on Foreign Relations, Independent Task Force Report no. 58, National Security Consequences of U.S. Oil Dependency (Washington, DC: Brookings Institution Press, October 2006), 48–49, 53, 56–59; Keith Crane, Andreas Goldthau, Michael Toman, Stuart E. Johnson, Alireza Nader, Angel Rabasa, and Harun Dogo, Imported Oil and U.S. National Security (Santa Monica: RAND Corporation, 2009). President Clinton's statements of the U.S. National Security Strategy were explicit about a military commitment to protect oil interests by providing stability in the Persian Gulf. A National Security Strategy for a New Century (Washington, DC: The White House, October, 1998), 6, 12–13, 32–33, 52, 54. Subsequent Bush administration documents are less explicit about oil interests, but few people would argue that the Bush administration was uninterested in oil. Joe Barnes, Amy Jaffe, and Edward L. Morse, "The New Geopolitics of Oil," The National Interest, Energy Supplement, November, 2004; Ian Rutledge, Addicted to Oil: America's Relentless Drive for Energy Security (London: I.B. Taurus, 2005), 7, 132, 197–98. The general public, policy analysts, and mainstream academic international relations specialists all accept this conventional wisdom. For a discussion, see Michael T. Klare, Blood and Oil: The Dangers and Consequences of America's Growing Dependence on Imported Petroleum (New York: Metropolitan Books, 2004); Robert Art, A Grand Strategy for America (Ithaca: Cornell University Press, 2003); Steve A. Yetiv, Crude Awakenings: Global Oil Security and American Foreign Policy (Ithaca: Cornell University Press, 2004). For a related policy analysis, see Philip E. Auerswald, "The Irrelevance of the Middle East," The American Interest 2, no. 5 (May-June 2007): 19–37. For a related, broader argument about the global economy's adaptations in response to political-military shocks, see Eugene Gholz and Daryl G. Press, "The Effects of Wars on Neutral Countries: Why It Doesn't Pay to Preserve the Peace," Security Studies 10, no. 4 (Summer 2001): 1–57. In other words, U.S. oil interests do not require the peacetime deployment of air or ground combat units in the region, the home-porting of naval units (the current U.S. arrangement with Bahrain) or the presence of military headquarters (the CENTCOM command facilities in Qatar). For previous descriptions of a minimalist approach to securing U.S. oil interests in the Gulf, see Kenneth M. Pollack, "Securing the Gulf," Foreign Affairs, 82, no. 4 (July/August 2003): 3–4; Eugene Gholz, Daryl G. Press, and Harvey M. Sapolsky, "Come Home America: The Strategy of Restraint in the Face of Temptation," International Security 21, no. 4 (Spring 1997): 25–29. For a related argument that the challenges that the Soviet (or a Soviet proxy) military would have faced in the Persian Gulf limited the need for an activist, forward U.S. military presence there in the latter stages of the Cold War, see Robert H. Johnson, "The Persian Gulf in U.S. Strategy: A Skeptical View," International Security 14, no. 1 (Summer 1989): 122–60. The "peak oil" theory claims that the world has already reached—or soon will reach—the global maximum rate of oil production, implying that prices will increase dramatically in the near future given constant or progressively greater demand. Critics counter that distinguishing production peaks from temporary plateaus is only possible long after the fact. We take no position on the peak oil debate, which is about future supply and the long-term base price of oil. Our argument here is about sudden supply disruptions (variation in supply) and market adaptability. Markets (and governments that hold stockpiles) will be able to adjust to disruptions whether or not the peak oil theorists are right. On this point, see also note 19 below. On peak oil, see Kjell Aleklett and Colin Campbell, "The Peak and Decline of World Oil and Gas Production," Minerals and Energy 18, no. 1 (2003): 5–20; Matthew R. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (New York: Wiley, 2005). For critics, read Leonardo Maugeri, "Oil: Never Cry Wolf—Why the Petroleum Age Is Far from Over," Science 304 (21 May 2004): 1114–15; Michael C. Lynch, "Crop Circles in the Desert: The Strange Controversy over Saudi Oil Production," Occasional Paper Series no. 40 (Boulder: International Research Center for Energy and Economic Development, 2006), http://www.gasresources.net/LynchM%2006%20(Crop%20Circles).pdf. The U.S. military is unlikely to be a useful policy tool in addressing these challenges. EIA, "Production: Monthly and Quarterly," http://www.eia.doe.gov/emeu/international/contents.html (accessed 24 May 2010). Even though most Gulf oil exports go to consumers in Asia and Europe, the United States depends on Gulf exports just as much as Asia and Europe do: if Persian Gulf oil were unavailable, consumers who had previously been importing it would try to buy the remaining oil on the global market, bidding against American consumers and driving up the price. See, for example, Stephen P. A. Brown and Hillard G. Huntington, "Reassessing the Oil Security Premium," RFF Discussion Paper DP 10-05 (Washington, DC: Resources for the Future, February 2010). Firms in these countries act as a competitive fringe around the cartel. They are simply price-takers acting as if they were participating in a normal, competitive market, albeit one with unusual complexity due to technical uncertainties—not knowing exactly where to find more oil or how much oil any given underground pool can produce, at what price and what rate—and due to high capital costs. Paul Stevens, "The Determination of Oil Prices 1945–95," Energy Policy 23, no. 10 (1995): 863–64; Eugene Gholz and Daryl G. Press, "Energy Alarmism: The Myths that Make Americans Worry about Oil," Cato Policy Analysis 589 (5 April 2007): 3–5. The market share of OPEC's core members has been a reasonably good predictor of oil prices, confirming the applicability of the leader-fringe model. David L. Greene, Donald W. Jones, and Paul N. Leiby, "The Outlook for US Oil Dependence," Energy Policy 26, no. 1 (1998): 58–59. The International Energy Agency defines "spare capacity" as the additional oil that can be brought into the market within thirty days and sustained for at least ninety. Unfortunately, data on spare capacity in the oil industry are notoriously unreliable, so it is difficult to test hypotheses about spare capacity directly or to adjust foreign-policy decisions in response to the amount of spare capacity. Slack production capacity is sometimes reported as a static figure—for example, 2 mb/d—but any reasonable measure must report the amount of extra oil that could be brought online in a given period of time and at what cost. Such details, unfortunately, are closely guarded secrets. Although industry observers can make reasonable estimates of current production levels—for example, by counting the number and size of the tankers that dock at a given oil terminal—they cannot tell how full producers' inventories are or how aggressively the producers are drawing oil out of underground reservoirs. And only the producers can do the advanced scientific tests to try to determine the maximum flow rate that a given field can support using current technology. Norman J. Hyne, Nontechnical Guide to Petroleum Geology, Exploration, Drilling, and Production, 2nd ed. (Norman, OK: Penn Well Corp., 2001). Oil economists debate the extent to which OPEC actually exercises market power, but the cartel theory—or the closely related leader/competitive-fringe model—is the mainstream view. M. A. Adelman, The Genie Out of the Bottle: World Oil since 1970 (Cambridge, MA: MIT Press, 1995); M. A. Adelman, "World Oil Production and Prices 1947–2000," Quarterly Review of Economics and Finance 42 (Summer 2002): 169–91. For tests of alternative hypotheses, see James L. Smith, "Inscrutable OPEC? Behavioral Tests of the Cartel Hypothesis," Energy Journal 26, no. 1 (2005): 51–82; A. F. Alhajji and David Huettnew, "OPEC and World Crude Oil Markets from 1973 to 1994: Cartel, Oligopoly, or Competitive?" The Energy Journal 21, no. 3 (2000): 31–60; James M. Griffin and Weiwen Xiong, "The Incentive to Cheat: An Empirical Analysis of OPEC," Journal of Law and Economics 40, no. 2 (October 1997): 289–316. For a recent study critical of the cartel hypothesis (but more open to the leader-fringe model), see James D. Hamilton, "Understanding Crude Oil Prices," NBER Working Paper 14492 (Cambridge, MA: National Bureau of Economic Research, November 2008). Adelman, "World Oil Production," 177; James M. Griffin and William S. Neilson, "The 1985–86 Oil Price Collapse and Afterwards: What Does Game Theory Add?" Economic Inquiry 32 (October 1994): 544–45, 548–49, 556–58. Simon J. Evenett, Margaret C. Levenstein, and Valerie Y. Suslow, "International Cartel Enforcement: Lessons from the 1990s," The World Economy 24, no. 9 (September 2001): 1223; Adelman, The Genie Out of the Bottle, 4–5, 30; Griffin and Neilson, "The 1985–86 Oil Price Collapse," 545, 557–58. Debora L. Spar, The Cooperative Edge: The Internal Politics of International Cartels (Ithaca: Cornell University Press, 1994), 15–20, 24–26; Evenett, Levenstein, and Suslow, "International Cartel Enforcement," 1224; Griffin and Xiong, "The Incentive to Cheat," 307–8. Cartel leaders are big enough participants in cartel bargaining that they have selective incentives to provide some level of public goods (or club goods) within the cartel. See Theodore H. Moran, "Managing an Oligopoly of Would-Be Sovereigns: The Dynamics of Joint Control and Self-Control in the International Oil Industry Past, Present, and Future," International Organization 41, no. 4 (Autumn 1987): 604–6; Ethan B. Kapstein, The Insecure Alliance: Energy Crises and Western Politics since 1944 (New York: Oxford University Press, 1990). Saudi Arabia has used spare production capacity to enforce OPEC discipline in the past. John S. Duffield, "Oil and the Iraq War: How the United States Could Have Expected to Benefit, and Might Still," Middle East Review of International Affairs 9, no. 2 (June 2005):122–23. Griffin and Xiong, "The Incentive to Cheat," 299; Evenett, Levenstein, and Suslow, "International Cartel Enforcement," 1224; Douglas R. Bohi and William B. Quandt, Energy Security in the 1980s: Economic and Political Perspectives (Washington, DC: Brookings Institution, 1984): 2–3, 18. Philip K. Verleger, Jr., "OPEC after the War: A New Alliance between the U.S. and Big Gulf Producers Weakens the Cartel," Institutional Investor 25, no. 4 (April, 1991): E17. This discussion of cartel management has presumed rational behavior on the part of all cartel members, but personalities, egos, and domestic politics are likely to play a role in the idiosyncratic bargaining relationships within the cartel. Deviations from rational decision making are likely to increase the chance of wartime overproduction still further. Cool-headed decisions that put the long-term health of the cartel ahead of short-term profits are probably less likely during the chaos of wars, so overproduction is likely. This does not suggest that oil consumers would necessarily benefit from greater instability and conflict in oil-producing regions. Conflicts can increase prices by triggering panics or hoarding, as described below. But the consequences of oil shocks are mitigated because shocks often disrupt cartel management, bringing some of the cartel's spare capacity on line. For example, OPEC leaders may have exhausted their spare capacity briefly around the time oil reached its peak price in 2008. Joe Barnes and Amy Myers Jaffe, "The Persian Gulf and the Geopolitics of Oil," Survival 48, no. 1 (Spring 2006): 144–46. Analysts who believe that global production has reached its peak may wonder whether future spare capacity will be sufficient to cover supply disruptions. But whether or not one subscribes to "peak oil" theory—which tells us that "normal" daily production will decline—we should expect some of the major oil producers to retain significant spare capacity. Cartels exist to keep capacity off-line, and cartel leaders use spare capacity to discipline member states. As long as OPEC exists, there will be slack. Peak oil theory implies that total daily production will decline, not that producers will eschew the value of keeping some spare capacity. Indeed, if the peak oil leads to increasing geographic concentration of oil supplies in OPEC producers, as many proponents of the theory predict, then we might expect that OPEC will become more rather than less important in the future oil market. That outcome could even increase the normal level of spare production capacity in the global oil market. For the argument that future oil output will concentrate in OPEC members, see Klare, "Blood and Oil." See also oil market forecasts, EIA, International Energy Outlook 2009, table G1, http://www.eia.doe.gov/oiaf/ieo/ieopol.html. Jerry Taylor and Peter Van Doren, "The Case against the Strategic Petroleum Reserve," Policy Analysis No. 555 (Washington, DC: Cato Institute, 21 November 2005). Eugene Gholz and Daryl G. Press, "All the Oil We Need," New York Times, 20 August 2008. Philip K. Verleger, "Explaining the Unexplainable: Crude Oil Prices—A Review of Theoretical Hypotheses, 1950–2006, and Empirical Evidence," Petroleum Economics Monthly (November 2006), http://www.pkverlegerllc.com/PEM-WEB.PDF; Hamilton, "Understanding Crude Oil Prices," 5–7. Crane et al., Imported Oil, 21, 79; Michael Lynch, "Blood or Gold? Politics, Economics, and Energy Security" (paper presented at the MIT Security Studies Program Seminar, Boston, MA, March 2003), 19, 22, 24. Amy Myers Jaffe and Ronald Soligo, "The Role of Inventories in Oil Market Stability," Quarterly Review of Economics and Finance 42 (2002): 401–15. Much of the criticism of the size of the reserves is journalistic. For criticism of the management of the SPR, see David G. Victor and Sarah Eskreis-Winkler, "In the Tank: Making the Most of Strategic Oil Reserves," Foreign Affairs 87, no. 4 (July/August 2008): 70–83; Crane et al., Imported Oil, 79–80. Even political leaders who do not understand the market quite this clearly fear criticism for "politicizing" a strategic asset, so they hesitate to release oil from reserves in any scenario that does not follow a crystal-clear, short-term shock like a major political-military crisis or a specific extreme weather event. Sailing through the Straits of Lombok and Makassar instead of Malacca would add approximately 10 percent to the shipping time from the Persian Gulf to East Asia. Because shipping costs constitute less than 10 percent of oil costs at the refinery, the net cost of the extra transportation time would be small. On sea routes and alternatives, see John H. Noer, Chokepoints: Maritime Economic Concerns in Southeast Asia, with David Gregory (Washington, DC: National Defense University, 1996). All data on oil production levels and prices are from EIA. Prices reflect the refiner acquisition cost of oil and are quoted in U.S. dollars for 2000. The price data series is available at http://tonto.eia.doe.gov/dnav/pet/hist/r1300____3m.htm. John D. Stempel, Inside the Iranian Revolution (Bloomington: Indiana University Press, 1981), 155; Kamran Mofid, The Economic Consequences of the Gulf War (London: Routledge, 1990), 9–10. Stempel, Inside the Iranian Revolution, 159. Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York: Simon & Schuster, 1991), 685. The summer 1979 is a good baseline because by then production had stabilized from the earlier (1978) Iranian oil strikes. Yergin, The Prize, 685. Note that this case shows both the rational and the irrational sides of hoarding: early increases in private inventories show a helpful adaptation mechanism in action, and post-spike panic buying temporarily exaggerated the effect of the supply disruption. During this crisis, the U.S. Strategic Petroleum Reserve was still in its infancy, only filled with fewer than 250 million barrels of oil. President Jimmy Carter temporarily suspended purchases of additional oil for the reserve, in effect putting some oil back on the market compared to the planned trajectory of steady government purchases, but he did not release oil that had already been stockpiled. This policy choice should count as a partial success for SPR-based adaptation during an oil crisis. For a detailed history, see Bruce A. Beaubouef, The Strategic Petroleum Reserve: U.S. Energy Security and Oil Politics, 1975–2005 (College Station: Texas A&M University Press, 2007), chap. 3. William B. Quandt, Saudi Arabia in the 1980s: Foreign Policy, Security, and Oil (Washington, DC: Brookings, 1981), 130–32; Yergin, The Prize, 704. Mofid, Economic Consequences, 38. These figures compare Iranian production in October 1979 and August 1980. Yergin, The Prize, 711. Mofid, Economic Consequences, 16. Yergin, The Prize, 713. Avshalom Rubin, "The Double-Edged Crisis: OPEC and the Outbreak of the Iran-Iraq War," Middle East Review of International Affairs 7, no. 4 (December 2003): 1–14. Yergin, The Prize, 748. Oil prices hovered around $50 per barrel through 1982 and declined through the $40s in 1983 and 1984. After the Saudis increased production in 1985, prices plummeted below $20 per barrel. Martin S. Navias and E. R. Hooton, Tanker Wars: The Assault on Merchant Shipping during the Iran-Iraq Crisis, 1980–1988 (London: Tauris Academic Studies, 1996), 70–72, 112, 130–31. Initially most of Iran's attacks on ships used machine guns and Hellfire antitank missiles, but toward the end of the war, the Iranians fired quite a few Chinese-made antiship cruise missiles. Yergin, The Prize, 743. Nadia El-Sayed El-Shazly, The Gulf Tanker War: Iran and Iraq's Maritime Swordplay (New York: St. Martin's Press, 1998), 307. Navias and Hooton, Tanker Wars, 89, 177, 179; Mofid, Economic Consequences, 124–25. Navias and Hooton, Tanker Wars, 98, 130. See Eugene Gholz and the LBJ School Hormuz Working Group, "Threats to Oil Flows through the Strait of Hormuz" (unpublished manuscript, March 2010). Eliyahu Kanovsky, "Economic Implications for the Region and World Oil Market," in The Iran-Iraq War: Impact and Implications, ed. Efraim Karsh (London: Macmillan, 1989). Victor and Eskreis-Winkler, "In the Tank." Daniel Yergin, "Ensuring Energy Security," Foreign Affairs 85, no. 2 (March/April 2006): 73. As in the 1990 Gulf War case, economic adjustment rather than political pressure from Washington caused the increased oil production. By February 2003 America's friends—Saudi Arabia and Kuwait—had increased their oil production by 10 percent and 6 percent, respectively. But OPEC producers without close political ties to the United States had also increased production: by February Iran had increased by 6 percent, Libya by 4 percent, and Nigeria by 10 percent. Note that one of the six case studies—the 1984 intensification of the Iran-Iraq War's attacks on oil shipments—does not appear in the figure because it never caused a significant reduction in global oil supply. Monthly average prices in current year (rather than constant) dollars. Other factors clearly contributed as well. Yergin, "Ensuring Energy Security"; Suzanne Maloney, "The Gulf's Renewed Oil Wealth: Getting It Right This Time?" Survival 50, no. 6 (December 2008): 131–33. For a policy analysis comparing forward presence to an over-the-horizon force posture, see Eugene Gholz and Daryl G. Press, "Footprints in the Sand," The American Interest 5, no. 4 (March/April 2010): 59–67. This discussion applies the material sources for national military power identified in John J. Mearsheimer, The Tragedy of Great Power Politics (New York: W.W. Norton, 2001), 60–67. Figures cited throughout this section for GDP, defense spending, and population are drawn from International Institute for Strategic Studies (IISS), The Military Balance, 2010 (London: Routledge, 2010). Yetiv, Crude Awakenings, 46–48. The Saudi Shiites predominantly live in the oil-rich Eastern Province. Kenneth M. Pollack, Arabs at War: Military Effectiveness, 1948–1991 (Lincoln: University of Nebraska Press, 2002). Kenneth M. Pollack, The Persian Puzzle: The Conflict between Iran and America (New York: Random House, 2004), 191, 194–95, 220, 228–33. IISS, The Military Balance, 242–44. Yetiv argues that the U.S. military presence in the Persian Gulf region encouraged "oil stability." He skillfully documents the steady increase in U.S. military access and presence during the 1980s and 1990s, but he merely assumes that this increased presence stabilized oil markets. He also does not explain which essential military missions in the Gulf require forward U.S. military presence. Yetiv, Crude Awakenings, 59ff. The bias in the region tends to explain most U.S. actions as attempts to secure (or steal) Gulf oil, so it should be easy to convince would-be aggressors that the United States would fight to maintain the current division of oil reserves. Barry R. Posen, "Command of the Commons: The Military Foundation of U.S. Hegemony," International Security 28, no. 1 (Summer 2003): 5–46. Even analyses highlighting the limitations of U.S. airpower agree that American airpower can utterly destroy ground forces advancing in the open. See, for example, Daryl G. Press, "The Myth of Airpower in the Persian Gulf War and the Future of Warfare," International Security 26, no. 2 (Fall 2001): 9, 12, 40. Yergin, "Ensuring Energy Security," 78; Carola Hoyos and Gareth Smyth, "Iran Weapons Test Drives Up Oil Prices," Financial Times, 4 April 2006. Noer, Chokepoints, 1–2, 33–35, 41–47, esp. table 16 and 80–81, app. B. Even in the very unlikely event that the entire sea lane between Malaysia and Vietnam were blocked, increased shipping costs would only drive up the price of oil in Japan by 0.9 percent. Noer, Chokepoints, 46, 80–81. Pipeline economics is not like the economics of cartel production. In pipelines, slack capacity represents lost revenue, and pipeline owners need steady revenue to repay their substantial upfront investment. At one point in 2002, Saudi pipelines to the Red Sea had approximately 4.5 mb/d of slack capacity, and Iraqi pipelines had 2–3 mb/d of slack capacity; these pipelines often have less spare capacity than that. EIA, "World Oil Transit Chokepoints," November 2002; EIA, "Persian Gulf Oil and Gas Exports Fact Sheet," April 2003; Jean-Paul Rodrigue, "Straits, Passages and Chokepoints: A Maritime Geostrategy of Petroleum Distribution," Cahiers de Geographie du Quebec 48, no. 135 (December 2004): 367. For a detailed campaign analysis of Iran's ability to disrupt traffic through the Strait of Hormuz, see Gholz et al., "Hormuz Study." Iran abuts the strait and occupies several islands in the Abu Musa archipelago, just inside the mouth of the Gulf. For an example of a warning about Iran's potential threat, see Simon Henderson, "Energy in Danger: Iran, Oil, and the West," Policy Focus No. 83 (Washington, DC: Washington Institute for Near East Policy, June 2008), 1–5. We focus here on the difficulty of blocking the strait and the capacity of oil markets to adjust. Note, though, that Gulf oil producers, including Iran, would only interfere with exports through the strait in exceptional circumstances: they all depend on the strait to get their crude oil to market. Iran also relies on the strait to import refined petroleum products, such as gasoline. Economic considerations do not always dominate strategic decisions, but in a time of conflict, a belligerent would be taking significant additional risk by taking steps that could ruin its own economy. Not surprisingly, even during the bitter Iran-Iraq War, neither Iran nor Iraq attempted to close the Strait of Hormuz. Johnson, "Persian Gulf in U.S. Strategy," 145. GlobalSecurity.org, "Military—Chinese Missles," http://www.globalsecurity.org/military/world/china/c-801.htm. Traffic estimates are based on author interview with expert at Lloyd's MIU, London, February 2008. For example, Iraqi pilots' target identification efforts in the Tanker War were generally ineffective. Pollack, Persian Puzzle, 197. For evidence on commercial ships' behavior during wartime in the Persian Gulf, see Gholz et al., "Threats to Oil Flows." Michael Eisenstadt, Iranian Military Power: Capabilities and Intentions (Washington, DC: Washington Institute for Near East Policy, 1996), 58; Lon Nordeen and Larry Brown, "In Peril on the Sea," Journal of Electronic Defense 25, no. 1 (1 January 2002); Navias and Hooton, Tanker Wars, 85–88. Navias and Hooton, Tanker Wars, 133–35 and table 6.1. Iran now deploys Chinese-made C-801s and perhaps even Russian-made SS-N-22 Sunburns, which have significantly bigger warheads than the Exocets used during the Tanker War. But even the Sunburn manufacturer's marketing claim is only that 1–5 Sunburn hits would severely damage a twenty-thousand-ton merchantman. Jane's Naval Weapons Systems no. 15 (1994). The most common type of tanker in the Persian Gulf displaces more than 200,000 tons, and larger naval targets are much less susceptible to damage. Capt. Wayne P. Hughes Jr. (ret.), Fleet Tactics and Coastal Combat, Second Edition (Annapolis: Naval Institute Press, 2000), 157–64. Massimo Annati, "Naval Mines: The Threat and its Counter," Naval Forces 26, no. 3 (January 2005). Note that some analysts also question whether these sophisticated minds would work in the strait. Milan Vego, "Mine Warfare: Are We Prepared for the Worst?" Naval Forces 26, no. 3 (January 2005). Annati, "Naval Mines." A minefield has to cover the entire area, while minesweepers only need to clear a relatively small "safe" channel. See Michael Glosny, "Strangulation from the Sea? A PRC Submarine Blockade of Taiwan," International Security 28, no. 4 (Spring 2004): 141, 143. Caitlin Talmadge rightly notes that mine-hunting to clear a channel through a properly seeded minefield is slow and dangerous work, but her analysis skips over the problems that the Iranians would face in laying the initial minefield. See Caitlin Talmadge, "Closing Time: Assessing the Iranian Threat to the Strait of Hormuz," International Security 33, no. 1 (Summer 2008): 82–117. For a summary of the history of wartime trade with belligerents, see Gholz and Press, "Effects of Wars." Despite the threat during the Tanker War, tanker owners were always willing to send ships into the Gulf. Navias and Hooton, Tanker Wars, 126. Ibid., 97. Gholz and Press, "All the Oil We Need." Arthur H. Barber III and Delwyn L. Gilmore, "Maritime Access: Do Defenders Hold All the Cards?" Defense Horizons no. 4 (October 2001): 7–8. For focus on the mine threat, see Scott C. Truver, "U.S. Navy MCM Forces," Naval Forces 25, no. 3 (January 2004); Massimo Annati, "Mine Hunting and Mine Clearing Revisited," Military Technology 27, nos. 8/9 (August 2003). The mission would surely still be difficult, but neither land bases nor pre-positioned forces nor a very fast reaction time would materially change the U.S. forces ability to prosecute the mission. For discussion of the important difficulties, see Talmadge, "Closing Time." Russia also produces enough oil that it would be difficult for other producers to provide substitute supply rapidly. If Russia were consumed by civil war that interrupted oil production, the United States and other oil consumers might face a steep and extended price hike. Russia's size and nuclear arsenal would preclude American military intervention in a Russian civil war. The Saudi scenario is more probable and more tractable, making it an appropriate focus for American military planning. Even local security forces sometimes have trouble adapting to the changing threat, although they have thus far been quite successful in keeping extremist threats below a level at which they threaten core regime stability. Thomas Hegghammer, "Islamist Violence and Regime Stability in Saudi Arabia," International Affairs 84, no. 4 (2008): 701–15. The seminal works on force sizing for stability operations suggest that ten to twenty soldiers are needed for every thousand civilians who inhabit the conflict zone. See James T. Quinlivan, "Force Requirements for Stability Operations," Parameters (Winter 1995): 59–69; John J. McGrath, "Boots on the Ground: Troop Density in Contingency Operations," Global War on Terrorism Occasional Paper 16 (Ft. Levenworth: Combat Studies Institute Press, 2006). For careful analyses of the Iraq experience, see McGrath, "Boots on the Ground," 113–45, 193–95; Daniel L. Byman, "An Autopsy of the Iraq Debacle: Policy Failure or Bridge Too Far?" Security Studies 17, no. 4 (October 2008): 599–643. Daniel L. Byman, Keeping the Peace: Lasting Solutions to Ethnic Conflicts (Baltimore: Johns Hopkins University Press, 2002), 187–88, 198–203; Stathis N. Kalyvas, The Logic of Violence in Civil War (New York: Cambridge University Press, 2006), esp. 173–81, 209, 346, 376–81. Samuel Huntington, "Patterns of Violence in World Politics," in Changing Patterns of Military Politics, ed. Samuel Huntington (Glencoe, IL: Free Press of Glencoe, 1962), 17–50; John Nagl, Counterinsurgency Lessons from Malaya and Vietnam: Learning to Eat Soup with a Knife (Westport, CT: Praeger Publishers, 2002). For the classic analysis of hypothetical operations to seize the Saudi oil fields, see Thomas L. McNaugher, Arms and Oil: U.S. Military Strategy and the Persian Gulf (Washington, DC: Brookings Institution, 1985). After invading Iraq in 2003, the U.S. withdrew almost all of its military presence from Saudi Arabia, where American bases were most controversial among locals. The continuing forward deployment of U.S. forces in the small Gulf monarchies has thus far not generated as much overt hostility, especially in the context of the American occupation of Iraq, which has attracted the bulk of extremists' attention. After the U.S. draws down from Iraq, forward deployment in Bahrain, Kuwait, Qatar, and Oman may become a focus for anti-U.S. extremists. Given that forces in those countries do not contribute to Saudi political stability but may weaken the legitimacy of their host governments, the cost-benefit analysis would suggest a U.S. shift to an over-the-horizon force posture. John S. Duffield, Over a Barrel: The Costs of U.S. Foreign Oil Dependence (Stanford: Stanford University Press, 2008), 184–96. Estimating the budgetary cost of American military deployments to protect oil interests in the Persian Gulf is extremely difficult. U.S. conventional forces are also referred to as "general purpose forces," because the same units and equipment can be used in a whole range of different ways within different scenarios. Taking a particular mission or a particular scenario out of the portfolio may not change the overall cost of training, equipment, or peacetime operations at all. Defense spending might even increase if U.S. forces shifted away from forward deployment in the Gulf, depending on how military planners decided to implement the new policy. For example, if force planners determined that the best way to implement the over-the-horizon approach would involve adding routine patrols in the Indian Ocean by another carrier strike group, defense spending might increase. For careful attempts to estimate the budget cost of the current U.S. efforts to protect Persian Gulf oil, see Duffield, Over a Barrel, chap. 6; Crane et al., Imported Oil, chap. 5.