CAIRO, April 3 (IslamOnline & News Agencies) – As Israeli aggression in the Palestinian territories continue, many analysts are reviewing what Arab countries could do to influence Israeli and U.S. foreign policies.

Speaking on the sidelines of an Organization of the Islamic Conference meeting on terrorism, Iranian Foreign Minister Kamal Kharazi said Tuesday, April 2, that Iran could consider using oil as a weapon to force the United States to pressure Israel into withdrawing from Palestinian territories.

Kharazi said the use of Arab oil to turn the screws on the U.S. and Israel would depend on a collective decision by Islamic countries, Agence France-Presse (AFP) reported.

“If they decide to use oil as a weapon certainly Iran will consider it. It will be effective if all Muslim countries would take such a decision," he said.

Commenting on Iran’s statements, Qatar-based Al Jazeera’s satellite channel spoke to Iranian journalist Mashallah Shamsel Waezeen who said that using the oil weapon needs a unified Islamic stance. “It will have no effect unless countries like Saudi Arabia join the initiative,” said Waezeen.

“All Arab countries need to take strong steps to affect the U.S. foreign policies. They need to boycott American products and Israeli ambassadors to Arab countries must be expelled,” he said.

Speaking exclusively to IslamOnline, Maghawri Shalaby, an Egyptian economic analyst, also said that the oil weapon must be used as a unified Arab and Islamic position.

“However, using it must follow certain conditions in order for it to be effective,” said Shalaby, adding that main Arab producers such as Kuwait and Saudi Arabia must also be part of the plan.

In the United States, he said, there are two major trends with regards to importing oil. The first is to maintain the oil flow coming in from Saudi Arabia and Kuwait, and the other trend is to depend oil coming in from the Caspian Sea and Russia.

“The other trend’s argument is very weak, therefore the Gulf’s petroleum is extremely important,” he said.

But, he said, it is unlikely due to the current world-wide economic crisis that the Gulf countries will be ready to give up the oil sale revenues. “They might use it if Arafat was killed or if they reach a dead end,” he said.

The West have taught us that economy and politics don’t mix and that we can’t get emotional when we talk about politics,” he said.

With regards to other economic weapons that could be used such as boycotting American products, Shalaby said that this would be ineffective if used on an individual level.

The government must endorse this initiative and co-ordinate with the anti-trust and anti-dumping policy departments in order to stop these products from coming into the country.

However, problems are inevitably going to start. “Starting the boycott policy is like a new delivery which has its labor pains. It is expected. The entire country needs to be part of this. It is impossible to talk about a boycott with the mass media running advertising campaigns for these products. A committee which employs those who are affected by the boycott should also be formed so that they are either compensated or reemployed.”

Some of the problems that may appear is the emergence of a new black market for these products.

With the success of a well implemented boycott plan, the U.S. foreign policies will inevitably change. “Economy and money is very important. If money is lost and people start losing their jobs, then the U.S. foreign policies will change,” said Shalaby.

He added that there are other problems that these countries could face internally. “For example, movie importers will oppose the government’s decision to boycott American movies since this is a main source of revenue for them. What is needed is a decisive stance from the government.”

There is an example in history where the boycott actually worked, Shalaby said. “Take Mahatma Ghandi for example, he sent back ships which brought him wheat aid from the U.S. He wanted his country to stand on its own and it did. When that happens, no one can interfere in your policies and what you do,” he said.

Despite reports saying that the Middle East will remain critical to U.S. oil needs for the foreseeable future, there is still an Arab reluctance to use this weapon.

According to a report issued by the Brookings Institution study on Monday, despite the rising prominence of Russia and the Caspian Sea, the Middle East holds from two-thirds to three-quarters of all known reserves, said the report, Energy and the Environment.

Brookings' economists estimated world crude prices could spike to 75 dollars a barrel if another Middle East crisis were to remove up to seven million barrels a day from the market.

The scenario assumed no other sources were available, and it held true even if the United States decided to draw down some 2.5 million barrels a day from its national reserves.

"A big increase in U.S. output could heighten competition for OPEC (Organization of Petroleum Exporting Countries) in the short to medium term, thereby moderating oil prices somewhat," the report said.

"But U.S. oil production is simply too high-cost (and reserves too limited) for increases in domestic output to affect OPEC much, especially over the long haul," it added.
"The gap between what the United States now produces and what it consumes, nearly 10 million barrels a day, is too wide to be bridged."
The threat to use oil as a weapon against Israel moved closer to reality Tuesday, April 2, when Iraq offered to join Iran and halt oil supplies to the United States.

The foreign ministry in Baghdad called for all Arab producers as well as Iran to join in the action to force Israel out of Palestinian land.

"Iraq is ready to halt immediately delivery of crude to the United States, jointly with Iran and all those who decide to do the same, and without waiting for unanimity" among Muslim producers, interim foreign minister Humam Abdul Khalek told journalists.

More than 40 percent of Iraq's oil production, which fluctuates between about 1.5 and two million barrels per day (bpd), is exported to the United States through intermediaries despite the two countries' execrable relations.

Iraq's oil exports to the United States under the United Nations "oil for food" program surged during 2001 .

Arab petroleum producers, which account for half of world supplies, have not used the oil card since the 1973 crisis, despite repeated calls by Iraq and others to do so.

But the idea has so far got short shrift from OIC members and from the Organization of Petroleum Exporting Countries (OPEC). "It is totally out of the question that oil will be used as a weapon," said a source at the Vienna headquarters of the 11-member cartel, which produces over 30 percent of the world's crude, on Tuesday.

The Minister of Justice and Human Rights of Southeast Asian oil producer Indonesia, Yusril Ihza Mahendra, also said he believed it was "quite impossible" to use oil as a weapon.

With additional reporting by Lamya Tawfik, IOL Staff