As his nemesis approaches with the woods of Dunsinane, Shakespeare’s Macbeth in his castle depicts life:
“… a poor player
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Iran’s supreme leader Ali Khamenei is certainly not an “idiot”, nor is Algerian president Abdelaziz Bouteflika. Very far from it. They are wily old survivors of the bear pits of domestic and international politics. And, for both of their countries, oil revenues are a crucial determining factor.
Yet this week Khamenei came out with a statement that reads like “sound and fury signifying nothing” while Algeria’s oil minister Youcef Yousfi and others seemed to strut and fret on a pointless mission.
The Iranian leader, cited by oil ministry information service Shana, said: “If sanctions are to be used [by the US and EU], the Iranian nation will put sanctions on them in the future. Iran has the world’s largest total reserves of oil and gas that the world and Europe are in need of. Iran can impose sanctions on them if necessary.”
Meanwhile, Yousfi and ministerial colleagues have been sent on what looks like a fool’s errand to Saudi Arabia, Oman, Azerbaijan, Kazakhstan, Mexico and Russia, seeking what the state news agency APS called “necessary ways and means to re-establish [oil] market equilibrium” and draw up a clear vision for the oil and gas industry. Approaches have also been made to African producing countries.
The US has not imported Iranian oil for two decades and the EU has managed perfectly well without it for the past three years. Needless to say, they wouldn’t have imposed the bans if they would have been self-harming.
And the Algerian diplomatic demarche is more like an exercise in herding cats. Saudi Arabia is the architect of Opec inaction. Mexico and Russia have made clear they have no intention of cutting output. Oman, Azerbaijan, and Kazakhstan are bit-part players.
But Khamenei’s idle threat and Bouteflika’s errands do serve a purpose. For Khamenei and his wing of the Iranian establishment, the bluster buffs the portrait of the defender of the revolution. It is also part of a long preparation in the state-controlled media for the possibility Iran will not be able to rebuild its crude exports to pre-sanctions levels, either because no nuclear deal is reached and sanctions remain in place or because Iran would struggle to regain lost market share in a world awash with oil. Hence countless exhortations to build the Resistance Economy and diversify away from crude exports.
An ailing and aged Bouteflika too has to bolster his position at home. He is doing this by reasserting Algeria’s traditional position as price hawk within Opec as, more than other members, it battles falling capacity. At the same time, he is playing on Algeria’s past as a mover and shaker in the post-colonial world, interlocutor with the then Soviet Union, and leader of the Non-Aligned Movement.
In both instances, the trick is to turn economic fragility into political strength.