Ten years ago this month the Union Jack was hauled down for the last time in the oil-rich Persian Gulf, ending 150 years of British military presence. For most Americans, it was a non-event. We were the world's largest oil producer, imported oil cost about $2 a barrel, and the shah of Iran stood ready to take over Gulf security.
That complacency was short-lived. By the end of the '70s, our oil production had fallen behind that of the Soviet Union and Saudi Arabia, oil imports had risen sharply, and the cost had jumped tenfold. After the Iran-centered security system collapsed with the shah, and the Russians invaded Afghanistan, President Carter declared the Persian Gulf "vital" to Western interests. He pledged the United States to defend the region against "outside" intervention and began to build the Rapid Deployment Force. President Reagan has indicated that we will intervene to preserve the monarchy in Saudi Arabia.
But will we remain "hooked" on Persian Gulf oil? And are these American commitments warranted?
There are no certain answers. But recent international oil trends, coupled with more realistic assessments of the Soviet threat, suggest that the Persian Gulf may become less "vital" in the years ahead. If so, we will need to reexamine our policy assumptions.
Over the past two years, crude oil imports into the United States from the Persian Gulf have dropped almost 50 percent--from 2 million barrels to just over 1 million barrels a day. Gulf imports now constitute only 7 percent of our oil consumption and 3 percent of our total energy requirements.
Western Europe's and Japan's dependence on Persian Gulf oil, much greater than our own, is also declining. This is because of the Iran-Iraq war, energy conservation and alternative energy sources and slow economic growth. Those countries' stance on the Palestinian issue makes them unlikely targets for the "oil weapon." Nonetheless, our allies remain vulnerable to supply disruptions caused by civil upheavals or regional wars.
Medium-range shortfalls can be cushioned by stockpiling and effective use of the consultative machinery of the 21-nation International Energy Agency. This machinery worked well at the outset of the Iran-Iraq conflict, when nearly 4 million barrels a day were lost to the world market. Major disruptions --over 7 percent of combined IEA imports--will trigger the IEA's emergency oil allocation system, although, admittedly, this is an untested procedure.
What about the Russians? In seeking funds for the Rapid Deployment Force, Secretary of Defense Caspar W. Weinberger has told Congress that the Soviet Union is running short of oil and may make a military strike for the Gulf oil fields. Recent reports do indicate that the Russians may reduce supplies to Eastern Europe. But as Weinberger's Defense Intelligence Agency has noted, although Soviet production is likely to level off in the mid-'80s, the Russians have the potential to expand production in the 1990s. Soviet military seizure of the oil fields ranks near the bottom of the threat list.
None of this should make us relax, as we did after the 1973-74 "oil shocks." In the near term, the industrial countries will continue to rely heavily on Persian Gulf oil, especially on oil from Saudi Arabia, and demands for oil will increase as economic conditions improve. It is essential to give high priority to energy security measures, such as substitutes for oil, expanded drilling outside the Middle East, and investments in strategic oil storage programs.
The Soviet Union will also remain well-positioned to expand its influence by exploiting regional instabilities. But instead of concentrating on the RDF to counter the Russians, we need to make better use of existing military assets and to deploy more political- diplomatic muscle--including more active involvement in the Arab-Israeli peace process.
It does not make sense for the Reagan administration to ask Congress for funds for the RDF and concurrently consider withdrawing one of the two carrier battle groups from the Indian Ocean. The unwieldy 225,000 man RDF, which will cost some $75 billion, will not be ready for about a decade; by then, we probably will not depend excessively on Persian Gulf oil. At least in the short run, it would be better to maintain our "over the horizon" naval presence in the Indian Ocean and to put more money in the ground at home.
The salt caverns in Louisiana and Texas, which constitute our Strategic Petroleum Reserve, now hold approximately 225 million barrels of oil. When the reserve is filled to its presently projected 750-million-barrel capacity, we will be able to absorb a daily loss of 2 million barrels of imported oil for a year--about twice as much as we now import from the Persian Gulf. A full reserve will also reduce the temptation to intervene militarily to prop up wobbly Gulf regimes.
Over the past 10 years, we have been held hostage to the Persian Gulf and have assumed questionable commitments. With prudent policies we should be able to liberate ourselves before 1991-- the 20th anniversary of the British withdrawal.