The Reckoning

Don’t Expect Asia to Join the Iran Oil Embargo

South Korean President Lee Myung-bak in Saudi Arabia on February 8 for talks on how much extra the Kingdom could provide if Seoul cut back on Iranian purchases. The answer for South Korea and other Asian countries, unfortunately, is ‘not enough.’ 

Photo by FAYEZ NURELDINE/AFP/Getty Images

They say money talks, bullshit walks – and they’re right.

After over a decade of prevaricating, the EU agreed recently to effectively swear off Iranian oil – no small thing, given the amount of oil some of its members import from that country. Whether it is too little, too late is hard to say at this point, but the difficulties it has caused for Tehran – and the wild incompetence of the Iran’s reaction so far (see my GlobalPost column) suggest sanctions finally looms as something more than an irritant in the halls of Mullahdom.

If it is “too little” and a military confrontation results instead of the negotiated settlement to the Iran nuclear question that should be in everyone’s interests, there will be plenty of blame to go around.

The US and Israel, rightfully wary of Iran’s intentions, have offered no real incentives for good behavior on Iran’s part, nor any creative way for Tehran to back down without looking like it has capitulated. Few people would regret the humiliation of the arrogant, shrill regime there, but if the goal is to actually get Iran to back down, then the strategy should include a carrot – hell, even a baby carrot – along with the stick.

China and Russia, of course, are obstructive and self-interested in all this, and other countries aspiring to new global roles prefer to hunker down than to choose sides.

But the real failure of US-EU diplomacy is in Asia. Taken together, Japan, South Korea, India and Taiwan account for about 38 percent of all Iranian export purchases. (Add China and the figure is 60 percent, but that’s a non-starter).

Western diplomacy, as usual a decade behind global trends, has focused on winning the support of the old G-7 nations (and even here, Japan’s only tentatively on board – Prime Minister Yoshihiko Nada saying only that “the trend is we’ll cut oil imports from Japan”).

South Korea, whose national security rests on five decades-old American troops deployment that has cost tens of billions of dollars, has said it may cut back, but is fiercely resisting anything approaching an embargo. 

Bluffs are there to be called, clearly.

Turkey, for its own reasons, also has decided not to embargo Iranian oil. Turkey has other fish to fry with Iran – leverage in Syria, where they are on opposite sides, and a mutual interest in rooting out the Kurdish PKK separatists in northern Iraq.

The US, however, is particularly perplexed by India, which it insists on viewing as bound to join a great “Club of Democracies” as John McCain once called it, that will perpetuate American influence. This fantasy has nine lives, apparently. As Washington found out in the run up to the foolish Iraq War, and then again last month when India spurned our bid to sell them fighter aircraft, New Dehli’s strategic vision does not include “recruit” in the global campaigns of Uncle Sam.

Nicholas Burns, a former Bush undersecretary of state and a man well-known in India for having negotiated the 2008 nuclear fuel deal (which has yet to win approval, btw), got front page play in the Times of India today for his normally low traffic column in “The Diplomat,” a kind of foreign service trade magazine, about New Dehli administering a “slap in the face” to India’s friends in Washington.

“This is bitterly disappointing news for those of us who have championed a close relationship with India. And, it represents a real setback in the attempt by the last three American Presidents to establish a close and strategic partnership with successive Indian governments,” he writes.

So publicly slapping them back makes sense?

Again, this is “old think,” the idea that because India is a democracy (or Brazil, or Turkey, or Indonesia or South Africa – the list goes on), it will plump for global crusades led by America. Unlike Europe after World War II, where the US template for global leadership was created, these are not prostrate democracies in danger of being overrun by a larger power.

Over the years – with encouragement, in fact, from decades of US rhetoric about self-determination and liberal market democracy in the old Third World – these countries have developed their own unique sense of national interests. They generally acknowledge that the surging growth rates of their economies owe a great deal to the world the US shaped and lorded it over from 1945 to 2008. But they don’t regard that fact as granting Washington a carte blanche right to enlist them in trade embargos, covert action or war.

If the US is to forge a truly strategic relationship with India, it will have to be based on India’s national interests. Detaching ourselves from the absurd Alliance of the Blind with Pakistan would be a start. It would be too much to say India “has no dog” in the Iran fight – adding Iran to the list of global nuclear armed states holds no appeal to a country where Hindu-Muslim tensions and the rivalry over Kashmir with Pakistan are the two clearest risks to continued national prosperity.  But India also developed its own nuclear capability “off the books.” To this day, ironically, international inspectors have greater access to Iran’s program than to India’s.

It should be said, too, that replacing 280 million barrels of oil – roughly what India purchased from Iran – would not simply be a matter of an executive decision.*

Excess global capacity exists largely in Saudi Arabia, and while the Saudis claim they can make up for supplies to the EU and perhaps a few other places, not even the most optimistic estimates of excess global capacity predict that Saudi Arabia could compensate for a comprehensive embargo by Japan, South Korea and India. It may, frankly, be a blessing – not least to the American consumer – that India and Turkey aren’t on the open market just now seeking to replace hundreds of millions of barrels of oil a year.

That sanctions are biting in Iran should be celebrated, but the real costs should also be tallied. Oil prices are rising and will rise further even without military action as the “replacement value” of non-Iranian oil spikes.

And diplomatically, pressure on India and Turkey to fall in line behind America where the benefits to  either aren’t completely clear will only diminish Washington’s influence going forward.

Correction, Feb. 20, 2012: This post originally mistakenly put the amount of oil purchased by India in the billions of barrels, instead of millions.