The wars in Iraq in
1991 and 2003 have both had oil as a contributing factor. The
2003 war was not only about Saddam's regime and weapons of mass
destruction, but about who will control the second-largest oil
reserve in the world. Iraqi oil reserves represent a major asset
that could quickly add capacity to world oil markets and bring
in a more competitive intention to oil trade. This is one reason
why the U.S. and U.K. supported the war in Iraq, and also one
why Russia and France opposed the war.
Why
it may have been an Oil War
Oil is seldom mentioned
for the reason why the U.S. invaded Iraq, but it may be one of
many reasons. Some governments and people questioned U.S. intentions,
but others say that Bush is just looking out for the future of
the country. Some Bush Administration officials, such Vice President
Cheney, have had extensive connections to the oil industry. During
the Clinton Administration, Donald Rumsfeld, Paul Wolfowitz, Richard
Perle and other current Bush Administration officials joined together
in the Project for a New American Century, which advocated "regime
change" in Iraq and other countries. A 1998 letter by Project
members stated that “we should establish and maintain a strong
US military presence in the region, and be prepared to use that
force to protect our vital interests in the Gulf—and, if necessary,
to help remove Saddam from power.”
Most Middle Eastern
oil goes to Europe and Japan, but U.S. and British companies pump
most of the oil for sale. Using military force in Iraq to remove
Saddam also puts the U.S. and U.K. in control of Iraq's huge oil
reserves. Control over the oil would limit U.S. dependence on
OPEC (Organization
of Petroleum Exporting Countries), and increase the production
of Iraqi oil, which was limited after economic sanctions were
put on Iraq in 1990. OPEC members are required to make an agreed
upon quota of oil to keep the price high enough to make a profit
but not too high where the West has to go other places or conserve.
U.S. oil
reserves (at current production levels) would only last only a
decade if the U.S. was cut off from all other oil sources. Iraqi
oil reserves (at their current use levels) would last about 526
years. Iraq has a reserve of about 112 billion barrels of oil.
Now that Saddam Hussein has been removed from power, the Iraqi
oil industry is up for grabs. It will depend on a new Iraqi government
to decide how it will distribute the oil.
"The fundamental
issue is, the day after Saddam is removed, the Iraqi oil industry
is open for grabs, and it will depend upon the government of Iraq
to decide how it will dispense that resource," says oil consultant
Rob Sobhani, a professor at Georgetown University in Washington.
"Certainly, American companies would be in a very, very strong
position to compete for the right." (ABC
News). On May 9, 2003, the European Union's EU Commissioner
for Development and Humanitarian Aid, Poul Nielson, visited with
the U.S. military commander in Baghdad, and said that the U.S.
"will appropriate the oil. It is very difficult to see how
this would make sense in any other way. I think that the United
States is on its way to becoming a member of OPEC." (Reuters).
http://news.bbc.co.uk/nol/shared/spl/hi/middle_east/02/iraq_key_maps/img/maps/iraq_oil_map485.gif
- U.S.
oil interests in Iraq
Oil
fields were the first places in Iraq to be occupied by the U.S.
and U.K. troops in the first hours of the 2003 war. Commanders
said the move was to protect the wells, but many Iraqi citizens
and other people around the world are suspicious that American
and British companies will gain the first oil concessions in the
new Iraq. Oil is not the only reason for this war, but as MSNBC
observes, "neither is it irrelevant." In the words of
Grant Goodman, the 2001 EPA Local Entrepreneur Award Winner: "Let's
start with national security--the billions and billions we waste
dancing around the issue, protecting those pipelines, invading
Iraq, doing whatever else we're doing in the Middle East. It all
gets down to continuing the flow of oil to this country."
- From The
Observer (UK): "Paul Wolfowitz, Assistant Defence
Secretary, and Richard Perle, a key Pentagon adviser, see military
action as part of a grand plan to reshape the Middle East. To
this end, control of Iraqi oil needs to bypass the twin tyrannies
of UN control and regional fragmentation into Sunni, Shia and
Kurdish supplies. The neo-conservatives plan a market structure
based on bypassing the state-owned Iraqi National Oil Company
and backing new free-market Iraqi companies. But, in the run-up
to war, the US oil majors will this week report a big leap in
profits. ChevronTexaco is to report a 300 per cent rise. Chevron
used to employ the hawkish Condoleezza Rice, Bush's National Security
Adviser, as a member of its board. Five years ago the then Chevron
chief executive Kenneth Derr, a colleague of Rice, said: 'Iraq
possesses huge reserves of oil and gas - reserves I'd love Chevron
to have access to.' "
From The
Age (Australia): "Ahmed Chalabi, leader of the exiled
opposition Iraqi National Congress, which is financed in part by
US oil companies, has said he would not feel bound by contracts
signed by Saddam and that "American companies will have a big
shot at Iraqi oil" under a new regime. The stakes are beyond
imagination. According to a report for the Global Policy Forum,
a think tank with consultative status at the UN, based on conservative
assumptions of oil prices of $US25 a barrel and reserves of 250
billion barrels and a 50-50 profit split, yearly profits for the
oil companies would run to $US29 billion a year - which is two-thirds
of the $44 billion profits earned by the world's five major oil
companies combined in 2001. The costs are also beyond comprehension,
but trivial compared to the prize, which is control of prospective
oil fields capable of producing more than $3 trillion of oil.
From The
Independent (U.K.) : "Once an American regime is installed
in Baghdad, our oil companies will have access to 112 billion barrels
of oil. With unproven reserves, we might actually end up controlling
almost a quarter of the world's total reserves....The US Department
of Energy announced at the beginning of this month that by 2025,
US oil imports will account for perhaps 70 per cent of total US
domestic demand. (It was 55 per cent two years ago.) As Michael
Renner of the Worldwatch Institute put it bleakly this week, "US
oil deposits are increasingly depleted, and many other non-OPEC
fields are beginning to run dry. The bulk of future supplies will
have to come from the Gulf region." No wonder the whole Bush
energy policy is based on the increasing consumption of oil. Some
70 per cent of the world's proven oil reserves are in the Middle
East."
From the Indo-Asian
News Service: "Sources said control over Iraq and its oil
wealth would allow American firms to manipulate global market prices
by deciding on production levels. Analysts said Iraq -- with proven
reserves of 112 billion barrels of crude oil, next only to Saudi
Arabia -- could throw the global oil market into a tailspin by resuming
full-fledged production if U.N. sanctions against it were lifted.
....Iraq is permitted to produce 3 to 3.5 million barrels of oil
a day under a U.N. oil-for-food programme, but actual production
is about 1.5 to 2 million barrels. This ensures that crude oil prices
are kept high, as a steep drop is not in the interest of U.S. companies,
a source said. "If prices fall, it could jeopardise their deep
water exploration, as it would not be viable due to the high costs
involved. "By keeping Iraqi supplies disrupted, the U.S. is
able to ensure that Saudi Arabia and Kuwait are benefited, as they
are able to raise their production to meet the shortfall and earn
more revenue." The source noted that U.S. President George
Bush and Vice-President Dick Cheney have strong links with the oil
industry and alleged that the threat to attack Iraq was aimed at
helping American oil companies. In 1973, Iraq nationalised all oil
companies. By displacing Saddam Hussein and installing a friendly
regime, U.S. and British companies would be able to re-enter the
country and get a major share of its oil industry."
From Mother
Jones magazine: "To the hawks who now set the
tone at the White House and the Pentagon, the region is crucial
not simply for its share of the U.S. oil supply (other sources have
become more important over the years), but because it would allow
the United States to maintain a lock on the world's energy lifeline
and potentially deny access to its global competitors. The administration
"believes you have to control resources in order to have access
to them," says Chas Freeman, who served as U.S. ambassador
to Saudi Arabia under the first President Bush. .... Iraq, in this
view, is a strategic prize of unparalleled importance. Unlike the
oil beneath Alaska's frozen tundra, locked away in the steppes of
central Asia, or buried under stormy seas, Iraq's crude is readily
accessible and, at less than $1.50 a barrel, some of the cheapest
in the world to produce. Already, over the past several months,
Western companies have been meeting with Iraqi exiles to try to
stake a claim to that bonanza.... "Controlling Iraq is about
oil as power, rather than oil as fuel," says Michael Klare,
professor of peace and world security studies at Hampshire College
and author of Resource Wars. "Control over the Persian Gulf
translates into control over Europe, Japan, and China. It's having
our hand on the spigot."....It is "highly possible"
that the United States will maintain military bases in Iraq, Robert
Kagan, a leading neoconservative strategist, recently told the Atlanta
Journal-Constitution. "We will probably need a major concentration
of forces in the Middle East over a long period of time," he
said. "When we have economic problems, it's been caused by
disruptions in our oil supply. If we have a force in Iraq, there
will be no disruption in oil supplies."
Form Counterpunch:
"The Washington, D.C. Council on Foreign Relations, whose members
include Vice President Dick Cheney and former Secretary of State
Henry Kissinger, and the James A. Baker III Institute for Public
Policy prepared the report, Strategic Energy Policy, Challenges
for the 21st Century. Key executives in the energy industry helped
prepare the report, including former Enron Chairman Kenneth Lay......Secretary
of Defense Donald Rumsfield has been asked numerous times whether
the U.S. is after Iraq's oil supplies and if that's what is driving
this war. Rumsfield's most recent response to the question was "absolutely
not." Yet the Baker report suggests that the U.S. should explore
the possibility of a regime change in Iraq, line up "key allies"
in Europe and Asia and "target (Iraq's) ability to maintain
and acquire weapons of mass destruction" as the reasons behind
attacking the country all in an effort to import oil into the U.S."
From Time
magazine: "For more than a half-century, American foreign policy
dealing with oil has typically been manipulative and misguided,
often both at the same time. The pattern of intrigue has ranged
from U.S. officials' secretly writing tax laws in the 1950s (so
the Saudi royal family could collect more money from the sale of
its oil and American companies could write off the added payments
on their tax returns) to overthrowing a government that showed too
much independence in handling its oil sales. To illustrate the dark
side of American oil policy, we offer two tales, stitched together
from declassified government documents and oil-industry memos, involving
a pair of Iraq's neighbors, Iran and Afghanistan. The first one
begins with the rise of a member of Iran's parliament, Mohammed
Mossadegh, an impassioned speaker and popular politician who had
long chafed at British domination over his country's oil.... In
1951 Mossadegh successfully pushed to nationalize Anglo-Iranian,
became Iran's Premier and established the National Iranian Oil Co.....On
Aug. 19, 1953, after the deaths of about 300 people in street riots,
the 71-year-old Premier was overthrown.....The American-friendly
Shah, Mohammed Reza Pahlavi, who had earlier fled the country, returned
triumphantly, resumed the throne and reasserted his control....The
CIA's fingerprints were everywhere."
Graph of Iraqi
oil production http://www.iraqenergy.com/i/2d/c16b49d6.gif
Other
foreign oil interests in Iraq
Over the past decade
since the 1991 Gulf War, many companies from over 12 countries
have been signing deals to develop the Iraqi oil reserves, as
part of the limited United Nations "Oil-for-Food" program.
Many of these companies were from Russia and France, and both
countries want to keep their Iraqi oil concessions for financial
reasons. Russia has its own vast oil deposits, but but they very
expensive to extract because of their remote location. (ABC
News).
- If France and Russia
had more access to Iraqi oil reserves, it would allow them to
have a greater strategic independence from U.S. oil companies.
Oil was one factor in whether or not different countries supported
the U.S. war in Iraq. Most permanent members of the UN Security
Council have oil companies with a stake in who will rule Iraq.
The U.S. says it does not want to control Iraq’s oil industry,
but wants other countries to share the risks, and the benefits
to go to the Iraqi people.
Links
on the oil connection to the Iraq War
- http://iraqenergy.com/
http://www.observer.co.uk/international/story/0,6903,882512,00.html
http://in.news.yahoo.com/020923/43/1viab.html
http://www.motherjones.com/news/feature/2003/10/ma_273_01.html
http://www.msnbc.com/news/819220.asp
http://www.counterpunch.org/leopold02132003.html
http://abcnews.go.com/sections/business/Nightline/NTL_oil_iraq_021004.html
http://www.theage.com.au/articles/2003/02/05/1044318666539.html
http://www.zmag.org/content/showarticle.cfm?SectionID=15&ItemID=2882
http://www.time.com/time/magazine/article/0,9171,1101030519-450997,00.html