It’s the Oil, Stupid

It’s the Oil, Stupid
By Jerome Grossman

While President Bush praises the invasion of Iraq as spreading freedom, while the Democrats in Congress are overcome with admiration for the U.S. troops installing democracy by the barrel of a gun, the rest of the world is saying, “It's the oil, stupid.”

The U.S. is stuck in the Middle East, just where it wants to be, without an exit strategy because it never intended to leave, not as long as the area contains 60% of world oil reserves and 40% of world natural gas reserves.

Do the math. Iraq has 115 billion barrels of known oil reserves, more than five times the total in the United States. In addition, it is the least explored of the world's oil-rich nations. It has been estimated that Iraq has 300 billion, yes billion, barrels of undiscovered oil. U.S. forces are now occupying in Iraq one quarter of the world's oil reserves. And these forces are now in position to protect the oil of Saudi Arabia and to threaten the oil of Iran.

At today's prices, which may be low given that consumer demand is growing in China, India, etc., the value of Iraqi oil would be about $30 trillion. The projected cost of the U.S. invasion and occupation is about $1 trillion. I won't try to evaluate the 4000 U.S. dead soldiers and 90,000 U.S. wounded.

Was the strategy of invading Iraq for its oil reserves developed at the secret meeting of the Energy Task Force in late 2001 organized by Vice-President Cheney? The oil and energy executives attending discussed the world situation at length but the administration refuses to release the details. But they can't fool Alan Greenspan, who was clear on the matter in his new book: “I am saddened that it is politically inconvenient to acknowledge what everyone knows: The Iraqi War is largely about oil.”

While the immense profits were certainly part of the overall plan together with eliminating a dedicated opponent of Israel, neither the money nor Israel was decisive. Probably more important was control of the oil as a tool, or perhaps a weapon in support of U.S. world hegemony. Modern industrial nations require oil for productivity and consumer satisfaction. Crossing the interests of the U.S. will carry the risk of being shut off from the indispensable liquid. The invasion/occupation of Iraq was more than a defensive measure for oil supplies; it gave the U.S. a potent offensive tool to keep other nations in line with American policies.