Iraq's Oil Fields example essay topic

An informed person is harder to control. What is the crisis? Iraq has always been a key player in the Middle East oil market, and was the original source of Middle Eastern oil. A 1947 planning document entitled "United States Petroleum Policy" states: the US should seek the "removal or modification of existent barriers to the expansion of American foreign oil operations" and to. ".. promote... the entry of additional American firms into all phases of foreign oil operations". Until the mid-1950's the main "barrier" in Iraq was Britain, for whom oil was a prime reward of its colonization of much of the region. In fact, when Standard Oil of California secured the first Western oil concession in Saudi Arabia in 1932, a much bigger and more powerful consortium was on the scene to try to block the deal - the Iraq Petroleum Company (IPC).

The British-dominated IPC did not believe that oil would be found in Saudi Arabia (the general consensus of opinion at the time), and they already had more oil than they knew how to handle in Iraq, so they allowed the US a toe-hold in the Arabian peninsula. The IPC, made up of the fore-runner companies to BP (British Petrol), Shell, Total of France, and Exxon, actually suppressed news of oil discoveries in Iraq and held down oil production by various devices in order to keep prices up. These restrictive practices, begun in the 1930's, continued into the 1960's, as the US Senate Subcommittee on Multinational Corporations found in 1974. An internal IPC survey document from 1967 made clear that the company had discovered vast oil reservoirs, but had "plugged these wells and did not classify them at all because the availability of such information would have made the companies" bargaining position with Iraq more troublesome. But foreign oil interests have an enemy: nationalism, i.e. tendencies of leaders or populaces to want the benefits from their resources for themselves. For some time the Arab nationalists were led by Egyptian President Nasser, long an inspiration in the Arab world for his defiance of Western neocolonialism.

Libya first became a US enemy in 1969. Western oil companies in Libya had been supplying Europe with oil which was valuable for its proximity and low-sulfur content. IPC was governing its production in accordance with the overall world-wide interests of the participating companies and not solely in accordance with the interests of Iraq". Andreas Lowenfeld noted that "This of course has been one of the principal charges of the government of Iraq against IPC". The conflict between the corporations and the government came to a head in 1972, when Iraq decided to nationalized the property of the IPC. After a painful battle, the IPC finally signed the nationalization agreement on February 28, 1973, receiving compensation from Baghdad but without buyback arrangements (buyback is an arrangement whereby companies have the right to buy a large percentage of oil at a favorable price) neither for US neither for British companies (though there was for France).

The move was immensely popular: vice president Saddam Hussein summarized it as "our wealth returned to us". Now, the surviving members of the IPC cartel, three of the world's largest public companies, BP, Shell, and ExxonMobil, have indicated that they may exploit the fall of Saddam Hussein with a fight for their old possessions in Iraq, arguing that that the compensation / nationalization deal they agreed to in 1973 was signed under duress. Professor Thomas Wald e, formerly the principal UN interregional adviser on oil and gas law, has observed of the oil companies, "If I were their adviser, I would develop this into a bargaining chip with the new government. It would play a role in the race for getting new titles". So there are great prizes at stake, both in terms of contracts for reconstructing the Iraqi oil industry, and for developing new concessions in the original source of Middle Eastern oil - with phenomenal profits on the horizon. Also, the second American-Iraqi war will be the culmination of a process that began a half-century ago when the United States for the first time employed its Central Intelligence Agency secretly and illegally to overthrow a democratically elected government.

The 1953 CIA-engineered coup d'etat against Prime Minister Mohammad Mossad eq of Iran started a chain of events that included Ayatollah Khomeini's revolution of 1979 against the Shah and his patron, the United States. This revolution destroyed one of the "twin pillars" of American strategy in the Persian Gulf -- cultivation of authoritarian, undemocratic client states in Saudi Arabia and Iran as sources of oil and bulwarks against Soviet influence. The Islamic revolution in Iran demanded a major reorientation of American foreign policy in the area. In that same year, the Soviet Union invaded Afghanistan and the United States covertly began to arm anti-Soviet Afghanis, as well as Osama bin Laden. This set in motion a complex series of realignments that would ultimately lead veterans of the anti-Soviet Afghan resistance to organize the terrorist attacks of September 11, 2001, against New York and Washington.

After the 1979 revolution in Iran, the United States decided to back the sworn opponent of the Islamic clerics who had come to power there -- namely, Iraq's secular tyrant Saddam Hussein. In September 1980, Saddam invaded Iran. When it looked like Iran might defeat him, the Reagan administration covertly began to supply him with satellite intelligence and weapons, including precursors for development of biological weapons and the basic ingredients for the chemical agents he used, in President Bush's memorable words, "to gas his own people". The Iraq-Iran war ended with a ghastly loss of life on both sides. Joost Hil terman, who is preparing a devastating book on the US and Iraq, has dug through piles of declassified US government documents -only to discover that after Saddam gassed 6,800 Kurdish Iraqis at Halabja (that's well over twice the total of the World Trade Centre dead of 11 September 2001) the Pentagon set out to defend Saddam by partially blaming Iran for the atrocity. A newly declassified State Department document proves that the idea was dreamed up by the Pentagon - who had all along backed Saddam - and states that US diplomats received instructions to push the line of Iran's culpability, but not to discuss details.

No details, of course, because the story was a lie. This, remember, followed five years after US National Security Decision Directive 114 - concluded in 1983, the same year as Rumsfeld's friendly visit to Baghdad - gave formal sanction to billions of dollars in loan guarantees and other credits to Baghdad. And this war is about human rights? In 1990, the US allowed Saddam to think that it would tolerate his seizure of Kuwait.

Every Iraqi leader since the 1920's has vowed to invade Kuwait and reunite it with Iraq, and Saddam was no exception. The US then seized the opportunity posed by Iraq's occupation of Kuwait to vastly expand its empire of military bases in the Persian Gulf. As the Middle East scholar Stephen Zones observes, "The United States used Iraq's invasion of Kuwait as an excuse to advance its long-desired military, political, and economic hegemony in the region". The Persian Gulf War in 1991 ended in a stalemate between Iraq and the international forces led by the United States and the first President George Bush. Iraqi President Saddam Hussein was driven out of Kuwait, the country he had invaded six months earlier. The peace agreement called for Iraq to destroy any chemical or biological weapons, and a team of United Nations inspectors regularly searched the country to make sure this was happening.

A strict embargo kept Iraq from selling oil or buying weapons on the international markets until the United Nations would rule it in full compliance with the terms of the peace treaty. Iraq is one of the world's biggest oil producers, and US and Saudi tycoons make billions of dollars a year while its oil was blocked. Hussein had originally invaded Kuwait because of an oil dispute. Both of the Presidents Bush have made millions of dollars as oil. The politics of the region are the politics of oil and there is big money to be made and lost by the winners and losers of international conflicts there. The US and British wanted the oil embargo to continue, while the Russians and French (who wanted to profit by buying and distribute Iraqi oil) wanted them lifted.

Back in 1991, there were many in President Bush's Administration who wished a peace treaty had not been signed. They had wanted US forces to continue all the way to Baghdad and oust Saddam Hussein. They had wanted to install a US government in Iraq. Many of these "hawks" were also involved in the oil business. Through the 1990's, they were out of office and relatively powerless. They wrote papers about what would have happened if the war had continued to Baghdad but no one cared.

Then in 2000, the son of George Bush, also named George Bush, was elected President of the United States (everyone calls this new one George W. Bush to avoid confusion). Most of the people in his Cabinet and Administration were his father's friends and included those who had wanted to continue the first Gulf War back in 1991. Ever since the first American war against Iraq, the "Gulf War" of 1991, the people in the White House and the Pentagon who planned and executed it have wanted to go back and finish what they started. They said so in reports written for then Secretary of Defense Cheney in the last years of the George H.W. Bush administration; and during the period when they were out of power, from 1992 to 2000, they drafted plans describing what they would do if the Republicans should retake the White House. In the spring of 1997, in the years of the Clinton administration, Rumsfeld, Dick Cheney and a bunch of other right-wing men (most involved in the oil business) created the "Project for the New American Century" (PNAC), a lobby group demanding "regime change" in Iraq. So the actual war in Iraq was actually concocted five years ago, by men like Cheney and Khalilzad who were oil men to their manicured fingertips.

The Bush administration could not just go to war with Iraq without tying it in some way to the 9/11 attacks. So it first launched an easy war against Afghanistan. Many of President Bush's advisors had hoped that Iraqi President Saddam Hussein had been behind the terrorism. They " ve been obsessing over him for over a decade and wanted an excuse to re-start the Persian Gulf War. But there is no link Iraq with Osama bin Laden. In Afghanistan there was at least a visible connection between Osama bin Laden and the Taliban regime, even though the United States contributed more to Osama's development as a terrorist than Afghanistan ever did.

Meanwhile, the White House launched one of the most extraordinary propaganda campaigns of modern times to convince the American public that an attack on Saddam Hussein should be a part of America's "war on terrorism". Remember: there is absolutely no connection between Iraq and the September 11th terrorists and absolutely nothing has changed between Iraq and the United States for years. Despite this non-connection, President George W. and his Cabinet have started a war in Iraq. They have still found no credible evidence of weapons of mass destruction. Oil and War throughout history imperial powers have expended more in wars of conquest and subjugation than could be earned from the colonies acquired or subdued. The costs of empire are borne by society as a whole, while the benefits of empire are enjoyed by the influential few.

Therefore, in general, for those who make policy - who share interests and viewpoints with those who hold domestic power - it is entirely rational to use the resources of society to secure the interests of the wealthy and powerful, even if expenditure far exceeds projected returns. Costs are socialized, benefits are privatized. That is the reality of our "free market" economy. A war will make a few rich people even richer, especially the stockholders of military equipment manufacturers. It has been quietly announced that for some time after a US victory, only US corporations would be given the lucrative deals to rebuild Iraqi's oil facilities (already under contract for some of these riches is Halliburton, US Vice-President Dick Cheney's old company. Iraq's oil reserves are the second largest on earth after those of Saudi Arabia.

Given that both the president and vice president are former oil company executives and that the president's father, also a former president, was the founder, in 1954, of the Zapata Offshore Oil Company, it is reasonable to assume that these men are very familiar with Iraq's oil wealth. The Zapata Company drilled the first well off Kuwait. In 1963, Bush p'ere merged Zapata with another firm to create the oil giant, Pennzoil, and in 1966, he sold off his share, becoming a millionaire in the process. During 1998 and 1999, when Cheney was president of the Halliburton Company of Houston, Halliburton sold Saddam some $23.8 million of oil field equipment. Perhaps the reason Bush junior is obsessed with Iraq, according to this line of thought, is that he wants to seize its oil. The United States needs a lot of oil for its huge automotive sector and also has an interest in controlling other countries whose industrial life is equally dependent on imported petroleum.

As Anthony Sampson, the oil expert and author of the classic book on the major oil companies, The Seven Sisters, observes, "Western oil interests closely influence military and diplomatic policies, and it is no accident that while American companies are competing for access to oil in Central Asia, the U.S. is building up military bases across the region". The US Department of Energy announced at the beginning of january 2003 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.

Once an American regime is installed in Baghdad, American oil companies will have access to 112 billion barrels of oil. With unproven reserves, who might actually end up controlling almost a quarter of the world's total reserves. Also, Oil from the North Sea costs $3 to $4 a barrel to produce. According to John Telling, "head of one of the few western companies to admit to working in Iraq", Iraqi oil could cost as little as 97 cents per barrel to produce: "Ninety cents a barrel for oil that sells for $30 - that's the kind of business anyone would want to be in. And this war isn't about oil? The physical supply and pricing of oil have been central concerns, true, but so also another benefit is the oil producers" role in sending surplus revenues to the US via bank deposits, purchases of US securities, and other investments and the investment of Kuwait's share of oil profits in British financial markets.

Declassified US documents note that "the UK asserts that its financial stability would be seriously threatened if the petroleum from Kuwait and the Persian Gulf area were not available to the UK on reasonable terms, if the UK were deprived of the large investments made by that area in the UK and if sterling were deprived of the support provided by Persian Gulf oil". Prior to the first Gulf War, Kuwait had vast Western investments including US Treasury bonds, portfolios managed by Citibank, gold reserves in the Federal Reserve and Bank of England, and a 10% stake in BP - which largely explains why it was okay for Iraq to invade Iran but not Kuwait. Thomas Ferguson wrote at the time that "petrodollar surpluses of the leading Middle East states no longer represent the Amazon of world capitalism... [but] the Gulf certainly qualifies as a world economy's Mississippi, a father of financial waters that still flows majestically into New York and London (where the largest US banks... have branches)". One should not fall into the common misconception that the overriding US concern is to keep oil prices low. Sometimes we want them high. In the early 1970's the Nixon administration favored higher prices.

The reason was the perception that Japan and Europe, more dependent on imported energy than the US, would suffer more from higher prices. The issue isn't exactly price but control. The Saudi dictatorship does what we want, but the Iraqi dictatorship does not. That's the problem. The oil interest is private. But it's also multi-faceted, not amounting simply to maximizing oil companies profits.

The larger issue is maximizing US control, which has a variety of benefits including non-oil profits and geopolitical advantages. While UN sanctions forbid foreigners from investing in the oilfields, "that has not stopped firms rushing to sign contracts in the hope of exploiting fields when sanctions are lifted". France, Russia, China, India and other countries have multibillion dollar contracts with Saddam that entitle them to drill in Iraq's oil fields. These contracts are currently in abeyance because of UN sanctions, but the countries holding them clearly want to protect their investments.

They would not look kindly on the prospect that the US might freeze them out. Even Royal Dutch / Shell have signed deals with Baghdad. "Lukoil, a Russian giant, has an enormous field holding down over 11 billion barrels of oil; the firm plans to invest $4 billion over the lifetime of the field to develop it". The contracts are generous: analysts at Deutsche Bank estimate that plausible rates of return are "of the order of 20%".

The Economist remarks, "All of this must be bad news for those excluded from the party: the Americans". Figures in the US oil industry insist that a new regime would tear up existing contracts, while the head of an iraqi opposition group, has openly declared that "American companies will have a big shot at Iraqi oil" - in the event of regime change. As the Economist points out, "It is hard to imagine that the American giants would not find some way to get a piece of the action in Iraq. US-led ouster of Iraqi President Saddam Hussein could open a bonanza for American oil companies long banished from Iraq, scuttling oil deals between Baghdad and Russia, France and other countries, and reshuffling world petroleum markets. Other popular theory holds that the primary influence on US thinking about the Middle East is the ruling Likud Party of Israel.

It is thought that the desire to oust Saddam Hussein reflects the long-range interests of Israeli rightists who want to ensure the country's continuing regional military superiority. Many of the key figures in the second Bush administration and in PNAC have intimate connections with Likud. Final considerations. The large military of the US is not needed for defense. The country has two peaceful and relatively-weak neighbors and hasn't seen an invasion since the War of 1812. On both sides, the United States is buffered by large oceans which make an oversees invasion all but impossible.

There is no more invasion-proof country in the world as the United States. For fifty years, the United States has used its military against much weaker, third world countries like Korea, Vietnam, Panama, Iraq. None of these wars has ever threatened the sovereign borders of the United States. But they have all revolved around access to resources and trading partners. Activists spotlighted human rights abuses in Saddam Hussein's Iraq for many years prior to the Gulf War. Rather than imposing embargoes then, the US government gave monetary and military support to Hussein in his war against Iran.

It wasn't until Hussein invaded Kuwait (needless is to remind the readers of the US's past support for Hussein, including when he used poison gas against Iranians and Kurds, support that vanished when he invaded an oil producing regime friendly to the US: Kuwait) and threatened American petroleum supplies that President Bush started a rhetoric of hate against Hussein, a rhetoric sponsored by American corporate greed. Saddam Hussein is not the only world leader with weapons of mass destruction. There are plenty of countries with even more lethal nuclear weapons including the US, Russian, the Ukraine, China, France, Britain, South Africa, India, and Pakistan. Most notably, Israel has also undertaken a nuclear program. Yet the United Nations and US Presidents have never proposed bombing Israel or any of the other countries for their weapons of mass destruction. Certainly there is very much a double-standard going on with regards to Iraq.

The US military serves to maintain US control over the world's raw materials. The US government has supported dictatorships (like Saudi Arabia, Indonesia, Zaire) and fought democracies (Chile, Nicaragua) in order to keep the price of raw materials down. If the United States were truly interested in democracy in the Persian Gulf region, it might have begun long ago in Saudi Arabia or in any of the feudal monarchies in which it has built major American military garrisons -- Kuwait, Bahrain, Qatar, the United Arab Emirates, and Oman. Is not possible to go into the United Nations and say, "Hey! , this is our proposal, and if you don't agree with it we will act bye ourselves". United States is one of the founding members of the United Nations and agreed on the UN legislation. If they encourage democracy then they should have respected the decision of the majority over the UN council (don't they talk all the time about "democracy"?

). They knew they wouldn't obtain the nine votes needed to start the military intervention, so they blamed the French on the failure of the diplomacy (the french never denied the possibility of the use of force, what they denied was the immediate use of force with no reason, Hussein was being contained and disarmed, and with his weak economy and weak army posed no threat for no country). So, why was the Bush administration so desperately lobbing in the UN council to start the war as soon as possible? Because the cooler temperatures make it easier for the American troops to operate in bulky chemical gear and the longer nights enable them to take advantage of their night vision equipment, plus, sandstorms are a hard obstacle to overpass. The war that the Bush administration has just started is illegal and out off International Law. I'm very sad to see how the law of the strongest has been imposed over International Right, over Law.

Kelley, Martin Overview of the Iraq Crisis March 2003 Kelley, Martin Why a Military? Rai, Milan Oil and War February 01, 2003 Chien, A.J. Iraq: is it about Oil? October 2003 Fisk, Robert This Looming war Isn't About Chemical Warheads Or HUman Rights: It's About Oil. The independent, January 18, 2003 Chalmers, Johnson Iraq Wars January 14, 2003.