Iraq : The Oil Motive

Advocates of war deny that control of Iraq's oil has anything to do with their intention to invade Iraq and topple Saddam Hussein.

Blair briskly dismissed it as "conspiracy theory". Why should we go to the trouble of invading when we could always buy oil from Iraq if we wanted to?

He ignores the simple fact that a greedy rich boy would prefer to own the sweet shop than to queue up with the others at the counter.

To peace and environmental activists it is patently obvious that oil is a major motive - but others may need convincing. What are the facts of the case?

Three pieces below, one about Sheikh Yamani's views, and another by Michael Renner, and a third by a US Congressman, demonstrate that the question is not quite as simple as Blair and Bush would have us believe.

More recently the Sierra Club, using the Freedom of Information Act, has extracted evidence to support the view that Bush was planning to lay his hands on Iraqi oil way back in 2001.

First, an article on the views of Sheikh Yamani, head of OPEC (but then, what would he know?):

BBC news Andrew Walker 14 March 2003

Oil is the major objective for the United States in seeking to occupy Iraq, according to the former Saudi Arabian Petroleum Minister Sheikh Kaki Yamani.
Sheikh Yamani, who was the leading figure in oil producers' cartel Opec for 25 years, gave his assessment of the push for regime change in a BBC interview.
Sheikh Yamani warned a war could mean the end of Opec.He said the US is aiming to secure its oil supplies. In his view, the US wants to reduce its dependence on oil from the Gulf, and from Saudi Arabia in particular.
Sheikh Yamani said the US had wanted to do this very quickly after 11 September 2001.
He said the US accused Saudi Arabia of being the main source of terrorist activities, backing them financially and ideologically.
Long-standing ambition
It is certainly true that most of those who carried out the attacks were Saudi nationals.
For the US, he said, the real answer is to have Iraqi crude.
America does not want a very low price of oil, that is obvious Sheikh Yamani Iraq could quadruple its current level of oil production - taking it to eight million barrels a day - by the end of the decade, he said.
And much of it could be exported via the Eastern Mediterranean Sea, ending US dependence on oil passing through the Strait of Hormuz - a narrow waterway leading out of the Gulf.
Seven years or so ago, he saw a letter addressed to ex-President Clinton by a group of politicians advising him to attack Iraq, occupy the country and operate the oilfields.
Those who signed the letter are now in power - including Vice-President Richard Cheney, Secretary of Defense Donald Rumsfeld, his deputy Paul Wolfowitz and Deputy Secretary of State Richard Armitage.

Opec a casualty?

However, Sheikh Yamani said, victory against Iraq could have one outcome the US does not want - the end of Opec.
If there is a stable political future for Iraq then the price of oil will start coming down.
He believes that with more Iraqi oil flooding the market, Opec members would fight among themselves as some try to increase their production too.
(This is) basic misapprehension about the scale of Iraq's oil industry and the timing for new production. However, Saudi Arabia would shoulder the burden of maintaining price control by reducing its production, he said. But one day the Saudis would not be able to do this any more, "and that's the end of Opec", he said. That is definitely not the outcome the US wants to see.

US faces pain too

US interests would not be served by a very low price. A number of US states are oil producers, and a low price of oil these states would hit them hard, he said.
When the price of oil collapsed in 1986, George Bush senior - then US Vice President - asked Saudi Arabia to raise the price of oil, he recalled.
"America does not want a very low price of oil, that is obvious," said Sheikh Yamani.
This negative view of Opec's prospects - assuming a successful war for the US - is in striking contrast to that of mainstream energy forecasters, who predict the cartel's market share would rise.

Stark warning

The key difference between Sheikh Yamani's outlook and theirs is that he thinks technology "is against oil producers".
"It is reducing the cost of discovery, the cost of development and the cost of production."
Kuwait is set to halt some of its oil production in the event of war. The result, he argued, is likely to be more output from Russia, the Caspian Sea and West Africa.
Technology is also cutting the consumption of oil. It adds up to bleak outlook
If the war goes badly for the US, then oil prices - in the near future at least - could hit the upward path.
If Saddam Hussein sets fire to his oilfields, attacks neighbouring Kuwait, Saudi Arabia and Iran or uses biological weapons on them, the world will see high oil prices - "something very disturbing", the Sheikh said.
And even the low oil price scenario could lead to political instability in oil producing countries that may rebound against the West and oil consuming countries.
"You are playing with fire," he warned.

More on the letter to which he refers:

San Francisco Chronicle, Monday, March 17, 2003

In a 1998 letter to then-President Bill Clinton, Donald Rumsfeld, Paul
Wolfowitz and Richard Perle, now the most outspoken hawks in the Bush
administration -- wrote that "if Saddam does acquire the capability to
deliver weapons of mass destruction . . . a significant portion of the
world's supply of oil will be put at hazard. The only acceptable strategy is
. . . to undertake military action, as diplomacy is clearly failing. In the
long term, it means removing Saddam Hussein and his regime from power. That
now needs to become the aim of American foreign policy."

Second, an excellent, fully referenced review "The New Oil Order: Washington's War on Iraq is the Lynchpin to Controlling Persian Gulf Oil, by Michael Renner, Foreign Policy in Focus, February 14, 2003.

This is a brief summary of his argument, with many direct quotes from Renner's piece, although I take responsibility for any misinterpretations of his argument.

1. There are plans for prolonged US occupation of Iraq after a victorious war.
2. Bush is an oil man, scion of a family of oil men, and his administration contains many oil men. "His Vice President Cheney came to government from being CEO of Halliburton Oil. He developed an energy policy under the primary guidance of a cast of oil company executives whose identities he has gone to great lengths to withhold from public view".
3. "Since taking office, the president and vice president have assembled a government peopled heavily with representatives from the oil culture they came from. These include Secretary of the Army Thomas White, a former vice president of Enron, and Secretary of Commerce Don Evans, former president of the oil exploration company Tom Brown, Inc., whose major stake in the company was worth $13 million by the time he took office."
4. The US has increasing dependence on imported oil - 50% today, 66% in 2020. Diverse sources, including W Africa, but the Middle East (Saudi and Iraq) is vital. US-Saudi relations have been strained since 9-11. "An unnamed U.S. diplomat confided to Scotland's Sunday Herald that a rehabilitated Iraq is the only sound long-term strategic alternative to Saudi Arabia."

If America controls and opens up Iraq's production, OPEC could disintegrate. It would also hit Russia's oil industry, which is relatively expensive.

Russia, China and France have signed oil contracts in Iraq, and are waiting for sanctions to be lifted before they can implement the contracts.

"As long as Saddam Hussein stays in power, U.S. and British companies will be kept out of Iraq, but ongoing sanctions will also thwart existing oil development plans." Regime change in Baghdad would reshuffle the cards and give U.S. (and British) companies a good shot at direct access to Iraqi oil for the first time in 30 years a windfall worth hundreds of billions of dollars. U.S. companies relish the prospect: Chevrons chief executive, for example, said in 1998 that he'd love Chevron to have access to Iraqs oil reserves.

In the preface to the passage of Security Council Resolution 1441 on November 8, there were thinly veiled threats that French, Russian, and Chinese firms would be excluded from any future oil concessions in Iraq unless Paris, Moscow, and Beijing supported the Bush policy of regime change. Ahmed Chalabi, leader of the Iraqi National Congress (INC), an exile opposition group favoured by the Bush administration, said that the INC would not feel bound by any contracts signed by Saddam Husseins government and that American companies will have a big shot at Iraqi oil under a new regime. U.S. and British oil company executives have been meeting with INC officials, manoeuvring to secure a future stake in Iraq's oil.

Meanwhile, the State Department has been coaxing Iraqi opposition members to create an oil and gas working group involving Iraqis and Americans. Nikolai Tokarev, general director of Russia's Zarubezhneft, a state-owned oil company, reflected in late 2002: Do Americans need us in Iraq? Of course not. Russian companies will lose the oil forever if the Americans come.

Fears of being excluded from Iraq's oil riches and losing influence in the region have fed Russian, French, and Chinese interest in constraining U.S. belligerence. These countries nonetheless are eager to keep their options open in the event that a pro-U.S. regime is installed in Baghdad, avoiding the risk of ending up on the wrong side of Washington, as the New York Times put it.

Obviously Oil

Rep. Dennis Kucinich, AlterNet
March 11, 2003
Viewed on March 25, 2003

Note: Although Dennis Kucinich was aggressively attacked by Washington Post columnist Richard Cohen for suggesting that the preemptive strike on Iraq was based on oil, the Post refused to print the presidential candidate and Ohio Democrat's response. This was especially frustrating, since the Post editorial stance and balance of editorial page columns have been decidedly pro-war. You can tell the Post how you feel about this ommission at ombudsman@washpost.com.

Is President Bush's war in Iraq about oil? Of course it is. Sometimes, the obvious answer is the right one: Oil is a major factor in the President's march to war, just as oil is a major factor in every aspect of U.S. policy in the Persian Gulf.

Ask yourself:

What commodity accounts for 83 percent of total exports from the Persian Gulf? What is the U.S. protecting with our permanent deployment of about 25,000 military personnel, 6 fighter squadrons, 6 bomber squadrons, 13 air control and reconnaissance squadrons, one aircraft carrier battle group, and one amphibious ready group based at 11 military installations in the countries of the Persian Gulf? (Note, the disproportionate troop deployments in the Middle East aren't there to protect the people, who constitute only 2 percent of the world population.)

What was Iraq's number one export when the U.S. made an alliance with Saddam Hussein, sold him biological and chemical weapons agents, and then did not object when he gassed his own people?

For what major Iraqi resource has Saddam Hussein denied contracts with the largest U.S. and U.K. multinational companies? (Note, those companies are the #2 (ExxonMobil), #4 (BP-Amoco), #8 (Shell) and #14 (ChevronTexaco) largest companies in the world, and the Bush Administration has been known to listen when large energy corporations speak.)

For what Iraqi resource did French and Russian multinational companies receive lucrative contracts from Saddam Hussein? What valuable commodity does one reprehensible, megalomaniacal tyrant (Saddam Hussein) control that another reprehensible, megalomaniacal tyrant (Kim Chong-il) does not?

How do the White House and State Department plan to pay for a post-Saddam occupation and reconstruction?

The answer to all of these questions is oil, of course. Oil obviously drives U.S. policy in the Middle East. So who can doubt that this war in Iraq concerns oil?

Meanwhile, the justifications the Administration has made for this war can be rather easily dismissed. Contrary to Administration assertions, a war against Iraq will not be in self-defense: Iraq does not pose an imminent threat to the United States. It doesn't have the ability, nor has it ever had the ability, to shoot a missile or send a bomber to harm America. Iraq does not possess nuclear weapons. Furthermore, there is no credible evidence that Iraq had anything to do with the terrorist attacks of 9/11.

No credible link between Saddam Hussein and al Qaeda has been made. Iraq did not have anything to do with the anthrax-containing letters that killed several Americans.

Contrary to the Administration's portrayal of an Iraqi threat, Iraq is hardly uniquely threatening. Sixteen other countries in the world have or might have nuclear weapons, 25 countries have or might have chemical weapons, 19 other countries have or might have biological weapons, and 16 other countries have or might have missile systems. Yet the Bush Administration is not on the verge of invading them.

Contrary to their denials that this war has anything to do with oil, Donald Rumsfeld, Paul Wolfowitz and Richard Perle wanted to go to war in Iraq long before they became Secretary of Defense, Deputy Secretary of Defense and Chairman of the Defense Policy Board. In a 1998 letter they sent to then-President Clinton, they stated "it hardly needs to be added that if Saddam does acquire the capability to deliver weapons of mass destruction ... a significant portion of the world's supply of oil will all be put at hazard... The only acceptable strategy is ... to undertake military action as diplomacy is clearly failing. In the long term, it means removing Saddam Hussein and his regime from power. That now needs to become the aim of American foreign policy."

Does President Bush's war in Iraq concern Iraq's oil? Obviously.

Presidential candidate and Congressman Dennis Kucinich (D-OH) is the ranking Democrat on the House Subcommittee on National Security, Emerging Threats, and International Relations. Visit www.kucinich.us.
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