Tuesday, November 27, 2012

Who Should Pay To Maintain The Flow Of Oil Through The Strait Of Hormuz?

For all intents and purposes, U.S. military forces provide the security that insures the uninterrupted flow of oil through the Strait of Hormuz.

An important new development in oil and gas production, hydraulic fracking, will soon put the U.S. on the cusp of energy independence.

Near-term U.S. energy independence makes this the perfect time to transfer the burden of keeping the Strait of Hormuz open.  Let that fall upon the chief consumers of Middle East oil.

Japan imports about 4.4 million barrels of oil a day (mb/d), 89% from the Middle East
China 5.3 mb/day, 40% ME
India 3.1 mb/day, 63% ME
South Korea 2.5 mb/d, largely from the ME.

The U.S. should transfer the protection of the Strait of Hormuz to these countries.  Let them assemble a joint naval force and pay for it themselves.

The benefits are numerous.  The U.S. Navy will have more resources to facilitate President Obama’s pivot to Asia, especially if Congress reduces overall defense spending.  U.S. taxpayers will stop subsidizing a portion of the total cost of oil consumption by Asian countries.  The U.S. will not be caught between rival Arab factions and countries.  In the absence of large forces stationed in the region, the U.S. is less likely to be drawn into another Middle East conflict.

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