Why Iran Wants Russia in OPEC
And why the U.S. shouldn't want them to join the Big Oil Club.
March 22, 2009 - 12:03 am
Pro-western Ayatollah Khatami’s decision to withdraw his presidential bid does not spell the end of Iran’s efforts to break out of isolation. The Iranian government has decided to lobby the OPEC oil-producing cartel to invite Russia in as a member, in what is clearly a bid to improve its own diplomatic and economic position.
“The ground is ready in OPEC to accept Russia as a new member,” declared Iranian Oil Minister Gholam Hossein Nozari on the eve of the OPEC meeting in Vienna on March 15. Last December, Russia’s deputy prime minister said that his country was considering the invitation to join the organization.
What is good for Tehran is bad for the U.S. Such a development should worry the Obama administration for a host of reasons. First and foremost, if Russia joins the cartel, it would significantly strengthen its relations with a whole list of Middle Eastern countries, including Saudi Arabia, Qatar, Kuwait, and Bahrain — all close U.S. allies.
America may well find that a stronger voice from Moscow in the region may translate into lost U.S. trade and a reduction in U.S. influence as Russia’s increases. After all, such countries depend greatly on oil for their income. With Russia becoming an important player in the oil market, sealing its position with an OPEC membership will make it increasingly difficult for those countries to ignore Russia’s desires.
With such backing from the Middle East, Russia may well be emboldened to strengthen its position in the Caucasus region and won’t be in the mood to show a spirit of compromise in places such as Georgia. This would make it harder to return Tbilisi to the American sphere of influence.
Potential economic damage to the U.S. also needs to be considered. Iran’s hope is that by including Russia, OPEC will have a bigger say in the production of oil, thus increasing the leverage of the oil-producing cartel. This would then enable them to cut production and push the price of oil to higher levels. Until now, the fact that Russia — one of the biggest oil producers — has not been a member of OPEC has meant that at times when OPEC has cut production, Russia has not followed suit. On a number of occasions, this damaged OPEC’s plans to raise oil prices.