John Hannah's blog

By John Hannah

Are the Saudis prepared to constrain oil prices to weaken Iran? It's an intriguing possibility that, if implemented, could have major implications for U.S.-led efforts to curb the Islamic Republic's nuclear program.

In no small part because of a weakening dollar, oil prices have risen for most of the past year from a low of close to $30 per barrel to around $82 per barrel last week. But since then, prices have been slowly sliding back, dipping below $77 yesterday. Most media attributed Thursday's decline to a report that U.S. oil inventories had increased higher than expected, and that U.S. consumers continued to reduce energy use in a still sluggish economy. No doubt true. But other factors have been at play as well.

Specifically, the near-record stockpiles of oil that currently exist not only in the United States, but across the developed world, have been made possible by the fact that OPEC has been increasing output at the fastest pace in two years. Earlier this week, Bloomberg reported that the cartel has boosted production more than a million barrels a day since March -- despite the worst global recession since World War II. OPEC's largest producer, the Saudis, have helped lead the way, increasing exports four out of the past six months. Saudi output has increased almost 300,000 barrels per day since earlier this year. Overall OPEC production reached its highest level in 10 months in October.

The Saudis have said that $75 per barrel is an appropriate target price. This week, a Saudi government advisor told the press that, at over $80 per barrel, prices had reached "the high end of our range" and any further rise could prompt the Kingdom to further tap its unused capacity -- which currently stands at approximately 4 million barrels a day.

The Saudis have publicly explained their effort to moderate prices as a function of their desire to protect a fragile global economy. But it's hard not to notice that the Saudi strategy also has the side benefit of pinching Iran. Specifically, while the Saudis in 2009 require an average oil price of about $51 a barrel to cover their budget, Iran needs an average price in excess of $90. If the price holds steady at the Saudi-designated range of $70-$80 for the rest of this year, the Saudi treasury could come in with a slight surplus. The Iranians, by contrast, have reportedly been forced to consider phasing out food and energy subsidies in an attempt to battle their looming fiscal problems.

Of course, reducing subsidies on essential commodities is almost always political dynamite -- especially in a place like Iran, where the economy is already in a shambles, and where millions of Iranians have taken to the streets since the fraudulent June 12 elections to make known their hatred of the current regime. The fact is that the Islamic Republic is desperate for increased cash flow that could be used to buy off as many of its disaffected citizens as possible and cover up its gross economic mismanagement. Saudi determination to limit any price spike -- for whatever reason -- is clearly an impediment.

With daily exports in the range of 2.5 million barrels per day, Iran stands to lose about $900 million annually from every one dollar drop in the price of oil. With excess capacity of 4 million barrels per day, the Saudis are clearly in position to go much farther than they have to date in squeezing Iran if they so choose. An aggressive Saudi effort to depress oil prices well below the current $75 target could prove extremely harmful to Iran's already reeling economy and tumultuous political situation. Almost certainly, such an effort could inflict as much pain on the Iranian regime as many of the sanctions currently being discussed by the United States and its international partners -- and, given Russian and Chinese reluctance to get tough with Iran, would almost certainly be quicker and easier to implement.

Would the Saudis really be prepared to play hardball with Iran in this way? In the past, the answer has usually been no. Taking big risks to offend more powerful neighbors has generally not been the Saudi way. A transparent effort to inflict major damage on the Iranian economy would certainly incur the Islamic Republic's wrath. The Saudis no doubt recall that a similar charge about depressing oil prices led Saddam Hussein to invade Kuwait in 1990. Even if an Iranian military attack is not likely in the cards, the Saudis have good reason to fear the kind of mischief Iran could cause within the Kingdom -- especially among the large, potentially restive Shiite population that is concentrated in its oil-rich Eastern Province.

That said, there's no doubt that Saudi King Abdullah views Iran -- and the near-term prospect of its acquiring nuclear weapons -- as nothing short of an existential threat to the House of Saud and its preeminent position in the Islamic world. There's at least some chance that he may be prepared to consider doing things now that in the past would have been unthinkable in order to prevent his worst nightmare from coming to pass -- especially if he's provided sufficient support, encouragement and guarantees from the United States and our major European allies.

In this regard, the current crisis in Yemen, in which Saudi forces have been drawn into combat on their southern border against Iranian-backed Shiite rebels, has only upped the ante. As with almost everything Iran does, Abdullah no doubt perceives the Islamic Republic's involvement in Yemen as the latest maneuver in a grand strategy whose ultimate target is the Kingdom itself and control of the Islamic holy sites of Mecca and Medina.

The big question is how far the Saudis are willing to go in drawing on their oil power to really do something about it -- something, that is, that actually stands a chance of either 1) compelling the Iranian regime to fundamentally re-calculate its nuclear ambitions, or 2) speeding the regime's unraveling at the hands of its already seething population. Of course, encouraging the Saudis to use oil as a political weapon is not without its downside risks; after all, the United States was on the receiving end of just such a Saudi gambit during the oil embargo that followed the 1973 Arab-Israeli war. But given the enormity of the stakes now at play vis a vis Iran -- both for the Kingdom and for the United States -- it's clearly an option that at least deserves serious consideration. One hopes that it's already the subject of intense consultations between Washington and Riyadh, preferably at the highest levels. Should the United States conclude that the potential benefits outweigh the risks, it will need to muster every instrument at its disposal to steel the Saudi king to take unprecedented measures to face down Iran's unprecedented challenge.               

Scott Nelson/KAUST via Getty Images

By John Hannah

In today's Wall Street Journal, Bret Stephens rises to the defense of Afghan President Hamid Karzai. Toward the article's close, Stephens writes that:

It would be  ... useful if some of Mr. Karzai's more acerbic Western critics could ask themselves why matters went abruptly south in Afghanistan after several years in which they had gone swimmingly well under Mr. Karzai. ... The answer has a lot less to do with Mr. Karzai's performance than with NATO.

Stephens's basic point is worth bearing in mind. Ever since last year's presidential campaign, there's been an unfortunate tendency to assess America's Afghan campaign as one long, steady downward spiral to disaster. "Eight years of drift," according to Obama administration officials seeking to explain their lengthy deliberations over strategy and troop numbers. But, as Stephens suggests, the reality is a good deal more complex. The fact is that, after a period of genuine progress following the Taliban's removal in late 2001, the situation in Afghanistan only began to deteriorate markedly between 2005 and 2006. Suicide attacks quintupled that year. Remotely detonated bombs more than doubled. Insurgent attacks nearly tripled. And the trends have steadily worsened every year since. The question is why? What changed in that time period that might help account for the sharp decline in America's war fortunes?

I certainly don't have an exhaustive answer, but I do have a few ideas that merit consideration:

1. Zalmay Khalilzad left Afghanistan  

Khalilzad served as President Bush's special envoy for Afghanistan from the country's liberation in 2001 until 2003. In 2003, he became U.S. ambassador. Khalilzad had an extraordinary relationship with Karzai, spending hours alone with him on a daily basis -- mentoring, advising, reassuring, hectoring (the latter only in private). The relationship allowed Khalilzad to succeed, far more often than not, in getting Karzai to do the right thing. Karzai had enormous confidence in Khalilzad -- and, more importantly, in the unflinching U.S. support that was manifested in Khalilzad's role.

Khalizad left Afghanistan in the summer of 2005. Since then, no other U.S. official has come close to replicating his relationship with Karzai. On the contrary, we've seen an ever-widening breach of trust and confidence between Karzai and the United States, bottoming out this spring when the Obama administration let it be known that it was "desperately searching" for an alternative to Karzai. Causal lines are always hard to draw, but it's difficult not to discern a significant connection between the end of Khalilzad's tenure in Kabul and the mounting frustrations with Karzai's performance in Washington. At a minimum, this suggests that now that Karzai's second term is a done deal, the Obama administration needs urgently to find a way to rebuild its badly tattered relationship with him. Can that be done with the people currently in charge of Afghan policy? That's a tough question, but it needs to be asked.  

2. NATO assumed overall command for the Afghan mission from the United States.

Most importantly, NATO took over operations in southern Afghanistan, the heart of the Taliban insurgency, in mid-2006. Karzai and the Afghans fretted throughout 2005 about the planned handover to NATO, urging the U.S. not to follow through. Despite repeated assurances from Washington, the Afghans palpably feared that the transition to NATO reflected the start of America's ultimate withdrawal from Afghanistan. Psychologically, this perception of declining U.S. commitment almost certainly had the dual effect of dangerously demoralizing the Afghan government and people (resulting in counter-productive hedging behavior), while emboldening the Taliban.

Similarly, the Pakistani government -- believing the United States to be once again headed for the Afghan exits -- was encouraged even further in its double game of maintaining an "option" for returning a friendly Taliban to power in Kabul.

Militarily, the shift to NATO, particularly in the south, undeniably resulted in a significant loss of combat effectiveness on perhaps the war's most important front. While America's British, Dutch, and Canadian allies fought valiantly in Helmand and Kandahar provinces, they were no match -- frequently by their own admission -- for the extraordinary fighting skills of their U.S. counterparts.  With only some exaggeration, a senior Afghan official once told President Bush that 800 U.S. troops had generated a greater sense of security and well-being among the population in Helmand than 8,000 NATO forces.

Finally, at an administrative level, putting the 26-member alliance in charge made a hash of command and control in the Afghan theater, undermining severely the unity of military and civilian effort that is essential to successful warfare, especially counter-insurgency operations.

Whatever the merits of ramping up NATO's role -- e.g., the importance of multilateralism; the need to divert greater U.S. attention and resources to the deteriorating situation in Iraq -- the benefits, in retrospect, have not been worth the costs in terms of advancing U.S. war aims. Since late 2008, the United States has been engaged in a delicate effort to re-balance the relationship between America and NATO, and to once again take ownership of the Afghan war in a much more aggressive way. The Obama administration's decisions on increasing troop numbers, as well as changes that have already been made in command and control arrangements in Afghanistan, are a crucial part of that essential return to full-blown U.S. leadership of the war effort.

3. America's failure to hold Pakistan to account for its support of the Taliban became fully manifested.

I vividly recall that from 2003 onward, Zal Khalilzad repeatedly tried to warn U.S. officials about the need for a strategy that would aggressively counter Pakistani efforts to resurrect the defeated Taliban. President Karzai and his security advisors harped constantly on the same issue. Yet it was all to no avail. Special Afghan pleading, some officials complained. The Musharraf government is already under enough pressure assisting our efforts to kill and capture al Qaeda operatives, others said. Whatever the excuses, far, far too little was done. As a result, by 2005-2006 the Taliban, as a serious insurgent force, began coming back with a vengeance. Even then, Washington was slow to respond in developing a serious policy to address Pakistan's double-dealing. Not until 2007-2008 did talk get serious about dramatically expanding operations to target Taliban leaders and disrupt their operations in Pakistan. It was only at this point that the United States began putting together a comprehensive diplomatic, economic, and military plan designed to pressure and empower the Pakistani government to act seriously against the Taliban monster it had encouraged along the Afghan border. To its great credit, the Obama administration has expanded and fully resourced this effort with Pakistan in ways that, at long last, are beginning to show signs of tentative progress.

There are, no doubt, a host of other causes that contributed to the war's downward spiral. But the larger point is that the United States did enjoy a significant period after the Taliban's downfall when real progress was being made. The causes of that success and why things began going badly need to be studied closely. The bottom line is that the deterioration of recent years was not inevitable. Rather, it resulted from real shifts -- and failures -- of policy, many of which are subject to U.S. control, influence and correction.

It's, of course, true that the costs the U.S. may need to endure now in correcting past mistakes will almost certainly be higher than if we'd gotten it right the first time. But not nearly as high as the costs of allowing the Taliban to return to power, allied with al Qaeda, with its sights firmly set on taking over a nuclear-armed Pakistan.      

David McNew/Getty Images

By John Hannah

There are some noteworthy developments this past week on the Iraq front that merit attention. First, after Sunday's horrible bombings in Baghdad, President Obama immediately phoned Prime Minister Maliki and President Talabani to offer condolences and reaffirm U.S. support. The president also issued a strong statement condemning the attacks and making clear that "America will stand with Iraq's people and government as a close friend and partner as Iraqis prepare for elections early next year, continue to take responsibility for their future, and build greater peace and opportunity. Together, we will continue to work for lasting security, dignity, and justice."

This response from the Obama administration was in stark contrast to two months ago, when twin suicide truck bombs hit the Iraqi Ministries of Finance and Foreign Affairs, killing at least 100 people and injuring hundreds more. The president was largely missing in action on that occasion -- no phone calls, no statement. Instead, Vice President Biden spoke to Maliki and issued a one-sentence readout of the call.

Iraq's heightened profile on the president's radar screen is only to be applauded. With more than 100,000 American combat troops still in country, and Iraq's success by no means a foregone conclusion, it's entirely fitting that the commander-in-chief remain intensely focused on the situation there. With just this minor investment in time and political capital, Obama has reminded our soldiers, our enemies, and -- perhaps most importantly -- the Iraqi people, themselves, of America's resolve to remain engaged and to help Iraqis consolidate their political, economic and security gains. For our Iraqi allies, it's hard to over-estimate the reassurance provided by this kind of steady determination from the president of the United States.

Also noteworthy in this respect was Obama's public remarks during his Oct. 20 Oval Office meeting with Maliki. True, the president opened with a long salvo on Afghanistan that left the Iraqis somewhat miffed. But he recovered with his first meaningful invocation of the "d" word as applied to the Iraqi context. And not just once, but on three occasions:

We have seen in the last several months a consolidation of a commitment to democratic politics inside Iraq. ... I just want to ... reemphasize my administration's full support for all the steps that can be taken so that Iraq can not only be a secure place and a democratic country, but also a place where people can do business, people can work, families can make a living, and children are well educated. And that broader sense of a U.S. relationship with a democratic Iraq is one that I think all of us are confident we can now achieve." (emphasis added) 

During his campaign, as well as during the first months of his administration, the president's default position was to talk Iraq down, and to leave the impression that America's only stake in the country was to wash our hands of it as soon as possible. That now seems to be changing, as the administration begins to realize that America's strategic interests could in fact be reasonably well served by having a potentially very prosperous, very powerful democratic friend in what historically has been one of the Arab/Muslim world's most influential countries. Moreover, this can be achieved through a relatively modest dedication of additional political, economic, and security resources -- even as U.S. forces continue to withdraw from Iraq and America's combat role dramatically diminishes.

If pursued, the president's shifting paradigm on Iraq and its possible role in American strategy in the Middle East is a most welcome development that deserves encouragement and support from both sides of the political aisle.

TIM SLOAN/AFP/Getty Images

By John Hannah

My old boss, Dick Cheney, gave a speech last night blasting the Obama administration's national security policy. One of his many targets was an interview that Rahm Emanuel did with CNN this past weekend -- in particular, Emanuel's claim that President Obama's current reassessment of Afghan policy was, for the first time ever, airing certain first-order questions about U.S. strategy. For officials of the previous administration, the objectionable portions of Emanuel's remarks included the following:

And when you go through all the analysis, it's clear that basically we had a war for eight years that was going on, that's adrift. That we're beginning at scratch, and just from the starting point, after eight years. ... And the president is asking the questions that have never been asked on the civilian side, the political side, the military side, and the strategic side. What is the impact on the region? What can the Afghan government do or not do? Where are we on the police training? Could that be something the Europeans do? Should we take the military side? Those are the questions that have not been asked. And before you commit troops . . . before you make that decision, there's a set of questions that have to have answers that have never been asked. And it's clear after eight years of war, that's basically starting from the beginning, and those questions never got asked.

The first problem with Emanuel's charge, of course, is the inconvenient fact that the Obama administration, itself, already conducted an exhaustive review of Afghan policy this past spring. Remember? The one that had the president on March 27 unveiling a "comprehensive, new strategy" that "marks the conclusion of a careful policy review." The one that had the president sending another 21,000 American troops off to war?

If true, Emanuel's implicit accusation that basic questions were not asked in that first review would be a shocking indictment of the administration's own competence. If untrue, Emanuel was gratuitously insulting the professionalism of his hard-working colleagues involved in the review, presumably to advance some other agenda. Anyone familiar with the skills, experience, and stellar reputation of Bruce Riedel -- who the administration hand-picked to oversee the initial assessment -- knows full well that the first possibility is out of the question. Rest assured that all the questions Emanuel asserts have simply never, ever been asked before about U.S. strategy were indeed asked in the course of Riedel's efforts.    

Of course, Emanuel's real target here was - surprise! -- the Bush administration. President Obama has come under heated criticism for wavering in the face of General McChrystal's recommendation for a large troop increase in Afghanistan. But it's not wavering at all, Emanuel assures us. It's purely a matter of the president acting responsibly and performing necessary due diligence -- basic Policy 101 sort of stuff that his predecessor in the White House never did before sending Americans into harm's way.

The problem with this claim is that it's as untrue (and slanderous) with respect to the Bush administration as it is with respect to the Riedel review. As Cheney pointed out last night, the fact is that President Bush ordered a comprehensive review of America 's faltering Afghan policy in the early fall of 2008. That October, the Washington Post reported that the review's purpose was to "return to basic questions":

What are our objectives in Afghanistan ? What can we hope to achieve?  What are our resources? What is our allies' role? What do we know about the enemy? How likely is it that weak Afghan and Pakistani governments will rise to the occasion?

The review was led by Lt. Gen. Douglas Lute, President Bush's deputy national security advisor for Afghanistan and Iraq. It brought together officials from the White House, Pentagon, State Department, Intelligence Community, and every other civilian agency concerned with Afghan policy. The review lasted for weeks and exhaustively examined all angles of U.S. strategy. In addition to its internal discussions, the group received briefings from the likes of Afghanistan 's Defense Minister, Abdul Rahim Wardak, and (Ret.) General Dave Barno, the first commander of U.S. forces in Afghanistan. The review included a trip by Lute to the AfPak theater to test some of the emerging recommendations with our political and military leaders on the ground. Its deliberations were ruthlessly self-critical of severe shortcomings in the war effort and argued the need for urgent changes in American strategy, in particular a far more robust counter-insurgency effort. All the questions that Emanuel raised with CNN were in fact raised during the Bush review, in addition to an array of others.

The Bush effort was provided to the incoming Obama administration during last year's transition, including its finding -- based on an initial request for additional forces submitted by then-commanding General McKiernan -- that more U.S. troops would be needed to conduct a successful counterinsurgency strategy. On that question, my understanding is that President Bush was fully prepared to defer to the wishes of President-elect Obama and do whatever would make the new administration's job easier; that is, Bush was fully prepared either to shoulder the decision to order more U.S. forces to Afghanistan before leaving office or he would leave that critical call to President Obama, giving the new administration a chance to conduct its own comprehensive review of the situation. The Obama team, quite understandably, opted for the latter course and President Bush deferred to their wishes -- as he invariably did on virtually every major question during the transition in his determined effort to make it one of the smoothest and most cooperative in American history.

As Cheney suggested in his remarks yesterday, anyone reading both documents would find significant overlap in the Bush review from 2008 and the review that the Obama administration conducted this past spring. One reason that's not particularly surprising is that Doug Lute, who was in charge of the Bush review, was also a major player in the initial Obama assessment. Indeed, Lute continues to serve on President Obama's national security council staff with responsibility for the Afghan portfolio. Perhaps Rahm Emanuel should ask Lute to refresh his memory by taking the short walk over to Emanuel's White House office with a copy of the Bush review. Emanuel could also draw on the expertise of any number of the other participants in the Bush effort, many of whom continue to work for the Obama administration, including at senior levels. I'm also quite sure that some of those who have subsequently left government service, such as former State Department Counselor, Eliot Cohen, former advisor on counter-insurgency, David Kilcullen, and former Deputy Assistant Secretary of Defense, Jim Shinn, would also be happy to talk to Emanuel about their work on the 2008 Bush assessment and the wide range of issues that were studied.

None of this, of course, should obfuscate the fact that the Afghan war effort was in dire shape by the close of the Bush administration.  An urgent course correction was required. President Obama quite courageously decided to do exactly that last spring when he accepted the recommendations of the Riedel review, opted to pursue a fully-resourced counter-insurgency strategy, and put in place a commanding general committed to carrying that strategy out. In response, conservative national security experts in general -- and former Bush administration officials, in particular -- were quite vocal in their support of the president, applauding his gritty determination to buck the advice of many in his own party and do what was necessary to fight and win the war against al Qaeda and the Taliban.

What has people criticizing the administration now is the endless public hand-wringing about whether to support its hand-picked commander in doing what's urgently required to implement a strategy that President Obama himself announced to the world less than six months ago. The key things that have changed in the interim -- the badly flawed Afghan presidential election and rapidly declining public support for the war effort, especially within the president's own Democratic Party -- were both developments subject to the Obama administration's influence and control, not the Bush administration's. It's President Obama's performance as commander-in-chief and wartime leader, both at home and abroad, that is now in the spotlight and it's clearly causing the administration real discomfort. Trying to deflect attention from that serious problem by leveling new, politicized charges against its predecessor that are so demonstrably spurious is unlikely to help much. It should stop so that the Obama administration and the country can get back to the deadly serious business of how best to protect and defend our interests in Afghanistan and Pakistan, as well as the broader war on terrorism.     

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