International Arms-Oil Relationship in the World | By Sampurna Mukherjee

International Arms-Oil Relationship in the World and Beyond

An analysis on the arms-oil relationship as two variables- will it change the world order or is it only a matter of self-interest and power struggle explained

By Sampurna Mukherjee

At a time when the world is reeling from the impact of Covid-19, a transnational virus declared Pandemic by the World Health Organization (WHO)- it should, and has, sent nations scurrying for emergency ventilators, hydroxychloroquine and a need to arrange protective equipment for the healthcare professionals. However, seemingly unrelated foreign policy developments, prima facie, hold a positive existential strain contemplated in a world order post the extermination of the Pandemic, as opposed to an equally realist reality- the Conflict Paradigm, or the constant struggle for power due to inequalities of resources to bid security, in the absence of a supranational authority.

International Trade and Military Defense are important determinants of any Nation-State in the international community, as a matter of National Interest. If one has been keeping abreast with the recent developments, one would inadvertently have read about India’s recent Arms deal with Israel of 16,479 Negev light machine guns worth $116 million, despite a less than average healthcare setup with unequal funding, even after the Reserve Bank of India’s (RBI) assistance to combat the current dismal situation in the country. To add to that, Russia and Saudi Arabia have ended their oil price war with the intervention of the United States, and agreed to reduce their outputs by decreasing crude oil supplies in the global market, affecting almost a 10-20% supply difference in the market, with the lowest 25 year demand and consumption of 6%.

Deeper analysis would point out an interesting perspective- an arms-oil interlinked narrative that has been ignored by most. India is currently the second largest arms importer in the World as of 2020, next only to Saudi Arabia, where the defense ministry pointed out the rationale in its statement as follows "The provisioning of this operationally urgent and very critically needed weapon will boost the confidence of the frontline troops and provide much-needed combat power to the Armed Forces”. To read this along with the current oil price drop and supply cut down by Russia and Saudi Arabia, Saudi Arabia’s proposition to cut down OPEC+ (Organization of Petroleum Exporting Countries) supply back in March to be shouldered by Russia by almost half, wasn’t met kindly that eventually started the price war. At $25 per barrel, which is at least $15 below the breakeven price point for both American and Canadian oil, that is proving to be fatal for the “almost” hegemonic power exercised by the United States in the light of a $19 trillion debt with interest that is not too bad in the current recession, 4.4% layoffs or 22 million unemployment aid applications and a considerable decline in the population, a crisis that has not been seen after the Great Depression in the 1930s, faced with a similar situation.

Spearheaded by the United States, the Shale oil producers are not at any benefit either after this output deal, since it is only a diplomatic masterstroke- even though storage capacities are being stretched to their greatest extent, the demand is not even remotely close to meet the burgeoning supply in the market. All of these developments are in the view of simultaneous happenings such as move towards lower cost renewables and clean energy. Before 2030, it is imperative for Russia and Saudi Arabia to extract every last bit of oil available since the factor of inter-dependence between the International arms trade and oil supply is inevitably and inextricably linked that is explored in greater depth. The higher the dependence on oil imports, the higher the incentives are to export arms and weapons to such oil-rich economies. The idea is to provide weapons, the oil-dependent country seeks to contain the risk of instabilities and threats in an oil-rich country. Empirical examples would include Saudi Arabia as the largest importer of arms as a traditional Gulf country as pointed above, where major exporters include the Israel, United Kingdom and France as oil-dependent countries or even United States arms-oil foreign policy. At a time when the oil reserves of Saudi Arabia are diminishing and diversification is necessary to avoid a higher unemployment rate than the fluctuating 25%-30% in the current scenario among the youth, importing arms is a sign of strengthening military artillery and promoting a “false” sense of security to the world when the linchpin of the global economy is under close quarters, especially in the world transformed now- signified by an oil crisis, a cycle of recession predicted with -3% growth and deteriorating manpower.

Bilateral relationship of close allies when it comes to the two variables i.e. the Trade-Oil relationship also plays a role, where these arms may not always be employed for a beneficial cause i.e. several civil wars and human rights violations have resulted from such transactions. This is a matter where sometimes, foreign policy and decision making versus International Criminal Law, can be at direct loggerheads with each other, owing to the latter’s niche area of growth at a nascent stage. The bigger question that needs to be considered is, in an ever-changing, ever-evolving world- would the oil-arms relationship be changed in the future by interchanging the first variable i.e. oil into nuclear energy, perhaps. Isolated incidents cannot be ignored as such, and India’s foreign policy demands at this point of this time, hinge on strong military superiority and a reflection of the Conflict Paradigm, as a heavy oil-importing country.

The rumour mongers speak of an emerging world order, with indications towards a multipolar world. Assuredly, it is only a concern of fleeting significance, where the Oil-Arms relationship as a matter of foreign policy, even in the time of the Pandemic, is sure to leave an imprint in the aftermath of virus, and to satisfy certain realist-pessimists, even if there was a second wave to come and drag the world economy down by 8% as predicted by the International Monetary Fund (IMF).  To conclude, the world developments are more intertwined and explicitly affected at large.

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This article has been written by Sampurna Mukherjee. Sampurna is somebody who embodies the quote "perfection is something that is attained when you do ordinary things extraordinarily". She strives to attain perfection in everything that she does with sheer hard work, and by being extremely focused on her goal. Her strong vocabulary and writing skills help her share her views eloquently, but she also loves to read, learn and paint to keep herself moving forward.

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