It seems that major oil producing states are among the world’s most troubling regimes. Take Putin’s Russia, the Islamic Republic of Iran, and Hugo Chavez’s Venezuela, for instance. The relationships between the three would suggest the emergence of a not-so tacit alliance bent on destabilizing global oil markets in order both to keep energy prices high and reduce U.S. power. Iran and Venezuela have much to gain from Russia’s increasingly more assertive foreign policy position. While the Cold War rhetoric issuing from the Kremlin over the last half a year or so has fueled concerns in the West, it has been met with euphoria by these two rogue states who long for the umbrella that a resurrected post-Soviet Russia capable of balancing U.S. power and reducing U.S. global reach would provide them. And it seems that Russia would like to do just that. At present, the Kremlin is selling conventional arms to Venezuela and nuclear technology to Iran at a time when the former is threatening its neighbors and the latter is developing nuclear weapons.
Venezuela is upsetting global energy markets with its announcement that it intends to nationalize the country’s oil industry. While major oil corporations vow to fight the effort, it is not at all clear how they can possibly win. Their only move might be to threaten to pull all investment out of Venezuela, leaving the country to run the oil industry on its own. What they may fail to see is that this is not threat. While the Venezuelans may not have enough technical capacity to keep the oil industry going, the Russians do. I would not be surprised, given the Russian-Venezuelan ties if this is not exactly what Hugo Chavez and Vladimir Putin have in mind. In fact, the two leaders are meeting in Moscow this week. They may well work out a mutually beneficial deal at the expense of the West.
The Russians and Iranians are also benefiting from each other. Iran’s mucking around in Iraq keeps the U.S. tied down, leaving the Russians a freer hand in threatening Europe with energy cuts and maneuvering about Asia to reduce American influence. However, the news here is a little more upbeat. Despite their oil wealth, the Iranians lack sufficient refining capacity to meets domestic demand. The investment capital necessary to upgrade the country’s sorely outdated and inefficient oil infrastructure is being diverted to subsidize gasoline imports. At the same time, domestic demand is increasing rapidly. In an effort to turn this around, Tehran imposed price increases and rationing this week. Judging by the fact that over 50 gasoline stations have been torched, the public appears upset with the policy. This is not good news for Tehran, and it is not good news for Russia. Russia needs an Iran that is stable enough to continue causing trouble for the Americans from Palestine to Lebanon to Iraq.
The present violence suggests a deep-seated opposition to the clerical regime from a public that is considered to be the most pro-American in the Middle East. It could not have come at a worse time given that Iran is currently locked in negotiations with the U.S. over Iraq. It will only weaken the Iranian position (and the Russians’). Look for the Russians to do something to help the Iranians here. The two need each other.