It is always unwise to fight a war on two fronts, especially after defense cuts have undermined one's military. But that seems to be where the West is heading. The Western allies are fighting ISIS in Syria and Iraq, while at the same time tensions are rising between NATO and Russia. The question is whether NATO can afford both after the cuts in its defense budgets of the past two decades.
Strange things are happening on the international oil markets. In the past three months, the oil price dropped 25 per cent. The political situation in many oil-producing countries, such as Syria, Iraq, Libya and Nigeria, is deteriorating. In normal circumstances, this would lead to rising oil prices. Exactly the opposite is happening. Economic growth in Europe, Japan and China is stagnating, while the United States is becoming one of the major oil producers while its oil demand is in decline. These trends would normally be corrected by a reduction in oil production. That is not happening, either.
Last month, the Saudis were pumping up 9.5 million barrels a day -- a break from their normal practice of reducing oil production by 1.5 per cent whenever the price drops by 10 per cent. The situation resembles what happened in 1985, when the Saudis raised oil production from 2 to 10 million barrels a day. As a result, oil prices dropped by two-thirds, forcing the Soviet Union out of the oil market. This change was one of the factors that lead to the collapse of the Soviet empire.
The Saudis' ability to influence the price of oil makes them into one of America's most valued strategic allies, despite their being untrustworthy and despising Western values of tolerance and freedom. U.S. Vice President Joe Biden recently apologized for saying that Saudi Arabia had funneled weapons and other aid to terrorist groups in Syria that the U.S. is fighting. Nevertheless, it appears that, despite his apologies, what Biden had said was the truth.
It is possible that the Saudis are driving down the price of oil at the request of the American government, which hopes that a shortage of oil revenue would bring Russia to the negotiating table to sort out a deal on Ukraine. Russia's national budget is largely dependent on oil revenue. If the price falls below 85 dollars per barrel, Russia will feel the squeeze, especially as the price of Russia's gas deliveries to Europe is linked to that of oil. As this author wrote here earlier, "Europe, having made itself almost totally dependent on Russian gas and oil during the past decade, now wants America to come and save it from self-inflicted disaster."
The fall in prices may have convinced the Russians to adopt a more lenient position towards Ukraine. Last Friday, the Russians and the Ukrainians signed a temporary gas deal, valid until the end of March 2015, in which the Russians promise to deliver gas to Ukraine gas a price of $378 per 1,000 cubic meters until the end of this year and $365 in the first quarter of 2015. Apparently, the Russians are anticipating further price reductions.
America, however, will feel the squeeze, as well. President Obama hopes to make the U.S. independent of foreign oil and gas supplies in the near future. The increased exploitation of shale oil and gas is crucial in this regard. However, with an oil price below 85 dollars per barrel, the exploitation of shale gas is no longer profitable and America's hope to become energy independent seems unrealistic.
The Russia-Ukraine temporary gas deal does not signify that Russian President Vladimir Putin is softening his position. The lower the oil price falls, the harder Putin is squeezing the Europeans militarily. In the past months, Russian submarines and Russian airplanes have been violating the territory of European NATO members.
NATO military headquarters in Mons, Belgium, warns that Russian military planes are violating European airspace so frequently now that "interference with civilian air traffic" can no longer be excluded. This could even lead to "mid-air collision" with civilian aircraft. Last week, Russian fighter planes and even bombers were spotted over the Baltics, Norway, the Netherlands, the Turkish part of the Black Sea, and as far as the Atlantic Ocean, where the British and Portuguese air force had to intercept them. According to NATO, so far this year over 100 Russian planes have already been intercepted, which is three times as many as in 2013.
A Norwegian F-16 shadows a Russian air force Tupolev Tu-95 bomber. (Image source: Norwegian Air Force)
Europe's cuts in military expenditure in the past two decades are now being felt. NATO has only a limited number of Quick Reaction Alert (QRA) planes on standby to deter Russian aircraft from violating European airspace. Moreover, countries such as Denmark, Belgium and the Netherlands currently deploy a substantial number of their operational F16 planes in the Middle East, fighting ISIS. The Dutch Air Force, for example, has only 25 deployable F16 planes, of which eight are currently deployed against ISIS. Russia, on the other hand, more than doubled its defense expenditure between 2007 and 2013, and plans to increase it again by 44 per cent in the 2014-2016 period.
If NATO wants to fight and annihilate Islamic terror groups in the Middle East, it might be wise to ponder whether it can afford to do so while tensions with Russia are rising. The impairment of Western militaries may soon lead to the question of which war NATO really needs to win: the war against Islamic jihad or the war against Russia over Ukraine?