- The Washington Times - Thursday, November 21, 2002

That the United States is really preparing to fight Iraq to assure domination over oil has been a common theme abroad. Iraq, Iran and North Korea have used their state-controlled media to promulgate this motivation. They would not want their populations to think that their leaders' desires for missiles and nuclear weapons may lead to conflict. While this rationale is not limited to such regimes it is widespread among critics of U.S. policy current geopolitics underline that security concerns, rather than an attempt to secure future supply, appear to be driving U.S. policy.

Indeed, in the United States, opponents of the administration's confrontation with Iraq or lovers of conspiracy theories in general have been slow to credit it with a strategy of energy domination. The confrontation from Iraq follows directly from U.S. vulnerability to asymmetrical including terrorist threats after the events of September 11.

A U.S. invasion of Iraq will not automatically produce cheap oil and peace in the region. If the United States wanted to send oil prices down in the short term, then embracing rather than challenging the status quo and removing sanctions from Iraq would be the logical approach. Before September 11, the U.S. oil industry was lobbying for this policy. The change in U.S. priorities following September 11 changed all that.

In the words of French Iraq expert Jean-Pierre Luizard: "The previous situation was ideal with a view to controlling oil flows and prices. Iraq was muzzled and, by means of sanctions, the United States was in control of oil matters worldwide."

If control of oil is the U.S. goal, better to stick to the status quo that prevailed before September 11. Before then, the United States was buying about 78 million barrels per day from Iraq, some of that being refined as aviation fuel and transformed into jet noise above the no-fly zones of northern and southern Iraq. Because there was no way the status quo in the Middle East could provide the United States with security energy or other the United States had to reassess its policies to prevent a future threat from a rearming and resentful Iraq, weakening and feckless Saudis, and apocalyptic-minded terrorists that offer a potential for a powerful blow to the world economy downstream.

In the near term, the potential for a U.S. war with Iraq could send energy prices higher, both in the United States and in the less-robust economies of many trading partners. In 1991, the war with Iraq doubled oil prices at their height, and a "fear premium" of more than $5 a barrel has burdened world economies in 2002. Iraq's market output of 2.5 million barrels per day will vanish from the world market at the start of hostilities.

Even given the best possible military case of a short victorious war, the U.S. ability to "control" the oil of post-Saddam Iraq is, in reality, going to be limited. Extensive investment is likely to be required to restore the Iraqi oil industry. Some feel Saddam is likely to try and carry out widespread destruction if he believes his regime is threatened. Even the Iraqi opposition dependent on Washington's support denies that the United States would receive any special future treatment

This means that the United States is not going to be able to use Iraqi oil revenues to pay for the war. Any oil revenues will be required, post-war, to keep the Iraqi economy alive. Investments may not flow to Iraq post-war; unlike other countries, the United States has no state oil company that can be sent in. Oil companies do not invest to drive down prices. A sudden surge of Iraqi oil at the end of the war is unlikely.

Market forces remain paramount in world energy. Going against market forces would lead to undercutting the legitimacy of an Iraqi successor regime and would lead to problems with Russia and France. Had the U.S. goal been domination of oil, encouraging (rather than limiting) their opposition to the U.S.-led liberation would have laid the groundwork for excluding their oil companies from a post-Saddam Iraq. Even without the assurances that are likely to have been given in connection with U.N. Security Council resolutions, it is unlikely French and Russian companies can be kept out of the development of Iraqi oil.

Investment rather than war is a better way to assure future energy security. However, the threat of Saddam's weapons of mass destruction being used against the oil shipment points of the Gulf needs to be removed, or all energy consumers will face, in the future, blackmail made all the more effective for the knowledge that retaliation, however powerful, cannot undo its effects.


David Isby is a Washington-based author and national security consultant.


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