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Iraq: Myth and Reality
By Kevin Filan

MYTH: The war on Iraq is all about oil
REALITY: Well, maybeů but it's a bit more complicated than thatů

U.S. Weapons   |  Al Qaeda   |  Israeli Violations   |  Oil   |  Coalition

According to many antiwar pundits, the war on Iraq is a massive farce engineered by U.S. petroleum companies in an effort to gain control of its vast oil holdings. Iraq has known oil reserves of 112 billion barrels, and may have far more than that, once its fields are properly explored and exploited. Iraqi oil is also cheaper to refine - some $1.50 a barrel cheaper, thanks to its high purity. To gain control of this petroleum, the U.S. has allegedly trumped up all sorts of charges against Hussein, seeking justification to overthrow him and take control of these oil fields for themselves. It is easy, even tempting, to point fingers at "Big Oil." The problem is that we're not looking at "Big Oil" but rather "Big Oils." There are several large energy giants which would love to get their fingers in the Iraqi pie - and not all of them are American.

At present, French oil giant TotalFinaElf has an inside track. While French firm CFP was among the companies which took a major loss when Iraq nationalized its oil industry in 1972, the French have long been major players in the Iraqi oil fields. After the nationalization, the Iraqis came to the French and Russians (and, later, the Chinese) for funding, partnerships and technical assistance. The Osiriak reactor, bombed by the Israelis in 1981, was built with French assistance; during the Iran-Iraq War France openly supported Iraq and provided Exocet missiles and French jets. Even after the 1991 Kuwait debacle, TotalFinaElf signed agreements which were to be implemented as soon as the UN sanctions were lifted. They have the rights to explore the largely untapped but potentially enormous Majnun field. When the French have expressed support for UN sanctions or criticism of Iraqi policies, the Iraqis have invariably retaliated by threatening the current preferential status France enjoys.

The Russians have also been assisting Iraq. The Soviet Union was one of Hussein's biggest supporters; today Russia's Lukoil has contracts for development rights to the West Qarna oil field. While Lukoil would like to develop the Iraqi fields, it also would like to see oil prices remain high, so as to provide the resources for exploration of the vast and largely untapped oil fields of Central Asia, Siberia and the Caspian Sea. China's Petrochina has dibs on the North Rumaila oil field, rumored to contain over 20 billion barrels. China's current oil imports from the region (500,000 barrels a day) are expected to increase to 5.5 million barrels a day by 2020, and China could easily replace France as Iraq's biggest customer.

The sanctions have also provided a lucrative income for neighboring countries; Turkey, Syria and Jordan have done a booming business in Iraqi oil which was shipped both under UN auspices and illegally. While they may make noises about the "humanitarian crisis in Iraq," they are also well aware of how much income they would lose if the sanctions were lifted. Turkey is arguably more important to a successful Iraq invasion than any European country; while the U.S. could launch an attack without supply lines in Turkey, it would be a far more complicated and riskier affair. The Turks are well aware of this, and are unlikely to offer their bases without lucrative financial incentives from the United States.

As Iraqi forces pulled back from Kuwait in 1991, they set many of the oil fields afire, creating an environmental and economic disaster from which Kuwait is still recovering. There is some justified fear that Hussein will do the same thing to Iraq's oil fields if he is on the verge of defeat. At present it would cost an estimated $20-40 billion to bring Iraq back to pre-1990 production capacity: that figure could be considerably higher if widespread vandalism or a protracted war resulted in significant damage to the country's infrastructure. This has provided yet another reason for much of the antiwar sentiment in the French and Russian administrations; simply put, war would be bad for their business.

American dependence on foreign oil has led to a long-running game of Petroleum Geopolitics, complete with invasions, coups and counter-coups. The Bush administration's ties to the oil industry are well-known and well-documented, but Bush's personal fortune would probably be better served by continuing high oil prices than by a successful invasion of Iraq, complete with lifted sanctions and a spike in world oil production. Dubya may well feel he needs to finish the job his father begun ů but it is doubtful that he is seeking a war with Iraq to make himself or his cronies wealthy. It would be na´ve to claim that Iraq's oil reserves had nothing to do with the current crisis; it is equally na´ve to claim they are the only reason we are concerned with Iraq, or that only the hawks are motivated by those reserves.


 

 


Mike Doughty



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