A worker adjusts control valves at the Daura oil refinery in Baghdad, Iraq. It has been suggested that oil price fluctuations have an effect on Islamic extremism

On February 14 1945, after having just left the Yalta Conference where he and the other allied powers had began laying the foundations for post-war Europe, US President Franklin D Roosevelt met with King Abd al-Aziz of Saudi Arabia to negotiate a very different deal. A deal that would allow Roosevelt to secure American hegemony throughout the world, but one that would simultaneously, and unintentionally, create the basis for a movement that would later seek to undermine that very plan.

On that day, the pair chose to meet aboard the USS Quincy, a Baltimore class heavy cruiser that was anchored in the Great Bitter Lake, a body of water situated smack bang in the middle of the Suez Canal. This meeting of king and president became the subject of a BBC documentary by the filmmaker Adam Curtis, titled Bitter Lake. In it, Curtis describes Roosevelt as a man who, near the end of his life, had tried to exercise his position and power to “transform the world”.

“After the Wall Street crash and the terrible depression that followed, Roosevelt had taken charge”, narrates Curtis. “He had passed laws that broke up the banks so that they would never run out of control again and he had rebuilt America with a series of giant dams that brought electrical power and employment for millions of people.”

The fundamental dynamic to militant Islam, which does not come from fluctuations in oil price, occurs when you get small Muslim countries that cannot fight against the pressure of Islamic fanaticism

New deal

What the father of ‘The New Deal’ believed, was that politicians, and the great power they wield, should be used to improve the lives of those they represent and that they should attempt to reshape the world in the image of this new, progressive, and modern America. But Roosevelt knew at the end of the Second World War that in order to secure and create this brave new world, he must maintain access to Saudi Arabia’s vast oil fields. But to do so, he would have to provide Abd al-Aziz with the wealth and security that he required to maintain power.

In their conversation the two men agreed to the each other’s terms. “But the King was well aware of dangers of opening up his country to the influence of the modern West”, Curtis explains, “and in the negotiations that followed, he laid down a condition: ‘We will take your technology and your money’ the King said,’ but you must leave our faith alone.’”

The faith that Abd al-Aziz was referring to was Wahhabism; an extremist pseudo-Sunni religious movement that Curtis claims rose up in reaction to modern western imperialism, which its followers believed was subverting and corrupting the true nature of Islam.

Roosevelt could not have known that the deal he struck with King Ibn Saud would help fuel a movement that would grow within Saudi Arabian society, and years later, threaten America’s global ambitions. Neither could he have known that it would create a link between oil and militant Islam that would allow Saudi Arabia to export Wahhabism and help its followers in attempting to create a caliphate across the Muslim world.

Rise and fall

Max Singer, an expert on US defence policy and co-founder of the Washington-based Hudson Institute, once noted that: “The rise of terrorism by militant Islam against the US and the West coincided with the rise in oil prices of the 1979-80 and the subsequent transfer of hundreds of billions of dollars from the West to Muslim countries.”

The 1979 oil crisis that shook the US and the West, as a result of suppressed supply in the wake of the Iranian Revolution, pushed the price of crude oil to $39 per barrel – the highest ever at the time. Since then the price of oil has fluctuated immensely and risen far higher. Between July 2014 and January 2015 the price of oil plunged by over 55 percent, with the price of crude falling below $50 per barrel for the first time since May 2009.

Today, the price of oil sits at $60.79 (Crude Oil WTI) – a moderate rise – but many commentators such as BBC business reporter, Mark Lobel, don’t think that there will be a return to the $90-plus levels for a while.

The reason being two-fold: OPEC appears reluctant to step in and address over-production, and more importantly, the US has benefitted from an oil and gas boom from fracking that has the potential to give the country its energy independence by 2030. “[Energy independence] has huge implications for energy, for [the] economy and for geopolitics”, Fatih Birol, the Chief Economist at the International Energy Agency (IEA) in Paris told Aljazeera. “The United States is becoming an energy exporter, [a] completely new role, and the new US energy strategy, foreign policy will be based on this new reality.”

Birol goes on to explain how in just short space of time, the US will be able to claim the number one spot in the world for oil production, capable of overtaking even Saudi Arabia. But will a fall in oil prices coupled with a dramatic increase in production in North America change the dynamic between the US, Saudi Arabia, and the militant arm of Islam (Wahabbism), which Curtis says is at the heart of Saudi Arabian society?

Singer certainly doesn’t think so. “I think it will play a small role”, he says, “but I do not think it is like a clap of thunder, but rather a part of a slow development”. The fact is, he explains, is that the US is affected by fluctuations in price as much as any oil exporter. Not only that, but singer questions whether oil prices have really fallen that much, at least in relative terms.

“For one thing, people talking about the big fall in oil price do so because the price once sat at just over $100 [per barrel] for a short period prior to its decline”, says Singer. “The area where the oil price seems to have settled now, around $60 to $70 is, in historic terms, quite high, not low at all.

“As a matter of fact, oil is the one major resource that has had a long-term increase in price. I do not think of this as a time of historically low oil prices”, adds Singer.

Overblown threat

It appears the link between oil prices and the prevalence of militant Islam that Singer once alluded to has diminished somewhat. In fact, the co-founder of the Hudson Institute believes that groups such as Boko Haram in Nigeria are not related to oil prices or energy independence in the West at all.

“The fundamental dynamic to militant Islam, which does not come from fluctuations in oil price, occurs when you get small Muslim countries that cannot fight against the pressure of Islamic fanaticism”, he says. “If it had not been for oil the degree of strength and importance of radical Islam would be less than it has been, and as you say the trend to less excess oil money would be helpful, but it is more a contributing factor to its decline than the primary metric for determining militant Islam’s demise.”

Once the governor of Turkey’s Central Bank and currently an Associate Professor of Finance at the Wharton School of the University of Pennsylvania, Bulent Gultekin, recently said: “I don’t think the Islamic State will be a sustainable proposition. It’s like a bush fire. There will always be these extremists, but I don’t think it’s going to be a systemic problem in the long run.”

His sentiments were echoed by Singer, who contends that the Islamic State will struggle to be successful in its aims and will gradually see its supporters both internally and externally turning their backs on the organisation.

“In the end, the Arab and Muslim countries will choose to get on the path to modernity, which will provide health, wealth and freedom for the people of these states”, says Singer. “I think these countries have been held back by strong religious sentiments for a while, but I do not think it will be able to hold back the process of modernisation for long.”

No one really knows what will provide the catalyst for militant Islam’s eventual demise, but in the war of ideologies, unfettered and uncontrollable acts of violence will never convince people of the merits of a particular set of beliefs. If anything, the chaos and destruction being unleashed by these terrorists look more like the death throws of a desperate fundamentalist minority that is losing its grip on a Muslim world looking to modernise – a trend that is bolstered, though only slightly, by cheaper oil prices and greater energy self-sufficiency in the West.