Liberty Gazette

Falling oil prices and American foreign policy

Posted in Editorial by libertygazette on October 17, 2008

With oil prices falling, our foreign policy is going to require some serious changes in the near future. Russia has seen their stock market halt trading due to it’s predominantly commodity driven economy. Recently, Russia has indicated a desire to regain soviet era dominance of adjacent countries still considered Russian territories by Vladimir Putin. Venezuela’s president Chavez, already vocally anti American, has allied himself with many countries that have a history of anti American rhetoric. In the Middle East, allies already weak in popularity from support of United States incursions are now suffering from an eroding economic foundation, bound to give fuel to radical anti-West influences within their respective governments.Rivals in the region who depend on oil revenues are becoming less likely to capitulate in the face of low profits from oil exports. All of these countries may simply have less to lose from embargoes than they may have to lose from opposition to nuclear non-proliferation agreements. In light of the effect of falling oil prices, how should our foreign policy evolve if at all?

Russia has had a history of instability in the last decade. Falling oil prices and resulting economic decline tend to may have the affect of empowering more radical elements within the Russian government. Since the fall of the USSR and Russia’s adoption of democracy, the United States has failed to develop a strong trading relationship with the former Soviet Union. Economic development has not taken root as many had predicted at the time of the transition. The absence of a will in American trade circles to build economic ties has had a negative effect, causing a rise in nationalism and increasing support for Putin’s radical Soviet resurgence. It has been so bad economicly in Russia for the past twenty years that the days of Soviet rule invoke nostalgia among Russian old enough to remember. The fear for the west should be that a disillusioned youth will grab hold of that nostalgia to power a regression into the Soviet past.

Iran, already a radical beacon in the Middle East, has fewer reasons to submit itself to nuclear oversight as the potential negative affect of an embargo diminishes with the price of oil. Have no doubt; the Middle East will be a much different place once Iran goes Nuclear. Not only will the success of a nuclear weapons program encourage other Middle East nations to do the same; but, it could antagonize and already uneasy Israel, India and Pakistan into a more aggressive posture. Additionally, causing any interruption to the supply of Middle East oil to the west may be tempting to a struggling Iran if the result would be increased oil profits from higher prices due to the interruption.

With the recent downgrade of Bolivia and strained relationships all over South America, Venezuelan president Chavez stands to gain support as the prominent voice against US policy in the region. With the threat of falling oil prices, it is very reasonable to think that his rhetoric will only become more offensive toward North America. If we allow Chavez to consolidate support in South America, the US may find it very difficult and expensive to dismantle that support in the future.

All of these potential foreign policy disasters may seem inevitable to some. That is only due to the current foreign policy projected by the current White House administration. It can be different several ways in the future. The United States is having some trouble in the financial department – you might have heard. The US’s inability to finance the most expensive foreign policy in recent history my save the US from trouble down the road. This deficit may drive the United Stated to act less unilaterally, allowing regional conflicts to be solved regionally with local resources. It may also encourage the next administration to develop trade opportunities that, in the past, would have been ignored. Examples of these possible opportunities could come from Cuba, Russia, Iran, North Korea, and several other Middle Eastern nations. These prospects face an uphill battle to reverse long standing deadlocks in foreign relations. One thing is certain, we cannot as a nation afford another cold war era foreign policy that excludes our ability to trade with much of the world.  We can hope that the US will tend more to it’s own business and to building bridges to the benefit of both US citizens and the rest of the World.

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