Oil still drives U.S. policy

A think tank memorandum to U.S. President Barack Obama reminds that oil remains a key driver of his administration’s foreign policy agenda.

A lengthy memo to Obama from the Brookings Institution, a U.S. center-left think tank, notes that oil remains an important factor for foreign policy considerations.

The memo notes that a binding agreement that could constrain Iran’s nuclear ambitions may provide seem assurances to a global commodities market wary of geopolitical and economic crises.

“It would end the cyclical proclivity for brinksmanship on all sides that inevitably spooks the oil markets and threatens the global economic recovery,” the memo reads.

Oil prices in early 2012 spiked after Iranian threats to choke off oil-shipping lanes in the Strait of Hormuz in response to tighter sanctions pressure. Brookings called on Obama to embark on a “major diplomatic initiative” to resolve the Iranian crisis.

For Saudi Arabia, the think tank advises that despite reforms in the Arab world, a revolution in Saudi Arabia “would be a disaster” for U.S. interests overseas.

“As the world’s swing oil producer, prolonged instability in Saudi Arabia would cause havoc in global oil markets, setting back economic recovery in the West and disrupting economic growth in the East,” the memo reads.

Nevertheless, new technologies in oil and natural gas development have shielded the United States from some of the issues that influence global commodity prices like crude oil.

UPI