Iraq’s most important asset is its petroleum. Oil accounts for 90% of the government’s revenue and 58% of the GDP. In 1972, the Baathist President of Iraq Ahmed Hassan al-Bakr nationalized the industry. Together, oil profits and the national budget, are the driving force behind economic growth in the country. Since the 2003 invasion, the rest of the economy has declined, making Iraq the most oil dependent country in North Africa and the Middle East.
Iraq has the third largest oil reserves in the Middle East, behind only Saudi Arabia and Iran. In October 2010, the Oil Ministry revised its estimate for the country’s reserves, raising them from 115 billion barrels to 143 billion. In the next two years there are plans to conduct a survey to find new oil fields, which could raise reserves to around 200 billion barrels.
Before the 2003 invasion, the Bush Administration and Tony Blair’s government discussed what to do with Iraq’s oil assets. Some in the White House argued that the U.S. should take over the country’s oil, but that was disputed but other parts of the government. In London, British oil companies pushed the Blair government to allow them entrance into the Iraqi oil market after the fall of Saddam Hussein. After the invasion, energy corporations were also eager to get their foot in the door since Iraq had largely been cut off from foreign investment due to United Nations sanctions imposed on the country after the 1990 invasion of Kuwait. Despite this lobbying, the Americans maintained the state monopoly over the industry.
It took five years after the invasion for the Iraqi government to open the oil sector to foreign investors. In 2007, Prime Minister Nouri al-Maliki’s Oil Minister Hussein Shahristani came up with a plan to develop the industry. Many of those early ideas were later scrapped, but in 2008 Baghdad inked its first petroleum deal. In August 2008, the government re-worked a 1997 joint venture contract done by Saddam Hussein with China’s National Petroleum Corporation (CNPC) for the Ahdab oil field in Wasit province. The new agreement was a technical service agreement, which limits profits for the corporation, and favors the government. Originally, CNPC signed a production sharing agreement that allowed the company to earn more money and claim the field’s reserves on the business’s books. That was followed by two bidding rounds in 2009 that led to eleven deals with eighteen different corporations. The foreign money and know how was desperately needed to boost Iraq’s oil capacity and production because the Oil Ministry had done all it could, with output hitting a plateau by 2008. The country needed to repair its existing infrastructure, invest in new pipelines and ports, drill new wells, and learn new techniques, which would cost billions of dollars each year to see any future growth. That could only be achieved by bringing in outside assistance and know how.
Iraq’s Kurdistan followed an independent path with its energy resources. Beginning in January 2003, two months before the invasion, the Kurdistan Regional Government (KRG) signed its first foreign oil deal with Turkey’s Pet Oil. It would later go on to sign a total of 37 contracts with 27 companies. This was done without the consent of Baghdad. Oil Minister Shahristani would later call all of these deals illegal, and blacklist any business working in Kurdistan from operating in the rest of the country. As a result, the two operating fields, Taq Taq in Irbil and Tawke in Dohuk, would largely produce for domestic consumption within Kurdistan, and smuggle the rest to Iran. In 2009 the Kurds were allowed to export their oil for four months, but that later broke down over whom would pay the companies operating the fields. In February 2009, the KRG started exporting again, but there are still disputes over compensating the companies, so the Kurds could be cut off once again.
Despite many critics of the Iraq War claiming that it was all about seizing the country’s oil assets, the industry remains under state control. Baghdad did not sign a foreign oil deal until 2008. That and the following ones offered in 2009 greatly favored the government rather than the companies, and all of the deals were joint ventures. Kurdistan has been much more open to energy corporations, offering better terms than the central government, but almost all of those contracts were for exploration and drilling work. Only two fields operate in the region, and those have only been allowed to export for seven months in eight years after the fall of Saddam Hussein. Before the invasion, American and British companies were pushing for access to Iraq’s oil, but only four firms from those countries won production contracts, and that wasn’t until 2009, six years after the invasion. Iraq has gained its position in the world because of its petroleum assets. It fuels the economy, and brings in foreign interests. The government has remained in control of the industry however despite the U.S. occupation, and the return of foreign companies.
Overview of Iraq's Post-2003 Foreign Oil Deals
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| Click on image for larger view (Independent) |
1st Foreign Deal
August 2008
Ahdab Oil Field, Wasit
Company: China National Petroleum Corporation (CNPC)
Reserves: 1 billion barrels
110,000 barrels per day production goal
1st Bidding Round, June 2009
South Rumaila Oil Field, Basra
Companies: British Petroleum and China’s National Petroleum Corporation (CNPC)
Reserves: 17.8 billion barrels
2.85 million barrels per day production goal
Follow-Up Deals To 1st Bidding Round
October 2009
Nasiriyah Oil Field, Dhi Qar
Companies: Japanese consortium of Nippon Oil, Inpex, JGC Corporation
Reserves: 4.4 billion barrels
200,000 barrels per day production goal
October 2009
Zubayr Oil Field, Basra
Companies: Italy’s Eni, U.S.’s Occidental Petroleum, Korea Gas Corporation (KOGAS)
Reserves: 6.5 billion barrels
1.125 million barrels per day production goal
November 2009
West Qurna 1 Oil Field, Basra
Companies: U.S.’s Exxon Mobil, Anglo-Dutch Royal Dutch Shell
Reserves: 7.4 billion barrels
2.1 million barrels per day production goal
2nd Bidding Round, December 2009
Badra Oil Field, Wasit
Companies: Russia’s Gazprom, Korea’s KOGAS, Malaysia’s Petronas, Turkey’s TPAO
Reserves: 109 million barrels
170,000 barrels a day production goal
Gharraf, Dhi Qar
Companies: Malaysia’s Petronas, Japan’s Japex
Reserves: 863 million barrels
230,000 barrels a day production goal
Halfaya Oil Field, Maysan
Companies: China’s CNPC, Malaysia’s Petronas, France’s Total
Reserves: 4.098 billion barrels
535,000 barrels a day production goal
Majnoon Oil Field, Basra
Companies: Anglo-Dutch Royal Dutch Shell, Malaysia’s Petronas
Reserves: 12.58 billion barrels
1.8 million a day production goal
Najma Oil Field, Ninewa
Companies: Angola’s Sonangol
Reserves: 858 million barrels
110,000 barrels a day production goal
Qayara Oil Field, Ninewa
Company: Angola’s Sonangol
Reserves: 807 million barrels
120,000 barrels a day production goal
West Qurna 2 Oil Field, Basra
Companies: Russia’s Lukoil, Norway’s Statoil Hydro
Reserves: 12.876 billion barrels
1.8 million barrels a day production goal
Exploration Contracts Signed With Kurdistan Regional Government (KRG)
January 2003
Originally Pukhana Oil Field
Renegotiated to Shakal Oil Field, Sulaymaniya
Bina Bawi Oil Field, Irbil
Companies: Turkey’s Pet Oil. Later joined by U.S.’s Prime and Murphy Oil and Australia’s Oil Search
2006
Bina Bawi Oil Field, Irbil
Companies: Turkey’s A&T Petroleum, subsidiary of Pet Oil, U.S.’s Prime and Murphy Oil. Later joined by Australia’s Oil Search
May 2006, June 2008
Kalar-Bawanoor Oil Field, Sulaymaniya
Companies: Canada’s Western Zagros, Canada’s Talisman Energy
September, 2007 (1)
Dohuk
Company: U.S.’s Hunt Oil
November 2007
Atrush Oil Field, Dohuk
Companies: Canada’s ShaMaran Petroleum, Turkey’s GEP, U.S.’s Aspect Energy, U.S.’s Marathon Oil
November 2007
Bazian Oil Field, Sulaymaniya
Company: Korea’s Korea National Oil Corporation
November 2007
Chinguetti Oil Field, Sangaw North Oil Field, Sulaymaniya
Company: U.S.’s Sterling Energy
November 2007
Hawler Oil Field, Irbil
Company: Russia’s Norbest
November 2007
Rovi Oil Field, Irbil, Sarta Oil Field, Irbil
Company: India’s Reliance Industries
November 2007
Sarsang Oil Field, Dohuk
Company: HKN Energy Ltd. subsidiary of U.S.’s Hillwood International Energy
Aqra-Bijeel Oil Field, Dohuk-Irbil
Companies: England’s Gulf Keystone, Hungary’s MOL
Bar Bahar Oil Field, Dohuk
Companies: Turkey’s Genel Enerji, England’s Gulf Keystone
Irbil, Khalakan Oil Field
Company: Turkey’s Dogan
Miran East and Miran West Oil Fields, Sulaymaniya
Company: Canada’s Heritage Oil
Pulkhana Oil Field, Sulaymaniya
Company: Canada’s ShaMaran Petroleum
Qara Dagh Oil Field, Sulaymaniya
Companies: Canada’s Groundstar Resources, Canada’s Forbes and Manhattan, Canada’s Niko Resources, Canada’s Vast Exploration
Shalkan Oil Field, Dohuk
Companies: England’s Gulf Keystone, Hungary’s Kalegran subsidiary of MOL, U.S.’s Texas Keystone
Sheikh Adl Oil Field, Dohuk
Company: England’s Gulf Keystone
Sindi-Amedia Oil Field, Dohuk
Company: France’s Perenco
Production Contracts Signed With Kurdistan Regional Government (KRG)
January 2004
Taq Taq Oil Field, Irbil
Companies: Turkey’s Genel Enerji. Later joined by Switzerland’s Addax Petroleum subsidiary of China’s Sinopec
Reserves: 304 million barrels
July 2004
Tawke Oil Field, Dohuk
Company: Norway’s DNO
Reserves: 1.439 million barrels
Foreign Oil Companies That Signed Post-2003 Deals In Iraq
Aspect Energy, U.S.
British Petroleum, England
China National Petroleum Corporation, China
DNO, Norway
Dogan, Turkey
Eni, Italy
Exxon Mobile, U.S.
Forbes and Manhattan, Canada
Gazprom, Russia
Genel Enerji, Turkey
GEP, Turkey
Groundstar Resources, Canada
Gulf Keystone, England
Heritage Oil, Canada
Hillwood International Energy/HKN Energy Ltd., U.S.
Hunt Oil, U.S.
Inpex, Japan
Japex, Japan
JGC Corporation, Japan
Korea Gas Corporation, South Korea
Korea National Oil Corporation, South Korea
Lukoil, Russia
Marathon Oil, U.S.
MOL/Kalegran, Hungary
Niko Resources, Canada
Nippon Oil, Japan
Norbest, Russia
Occidental Petroleum, U.S.
Oil Search, Australia
Perenco, France
Pet Oil/A&T Petroleum, Turkey
Petronas, Malaysia
Prime and Murphy Oil, U.S.
Reliance Industries, India
Royal Dutch Shell, England-Holland
ShaMaran Petroleum, Canada
Sinopec/Addax Petroleum, China-Switzerland
Sonangol, Angola
Statoil Hydro, Norway
Sterling Energy, U.S.
Talisman Energy, Canada
Texas Keystone, U.S.
Total, France
TPAO, Turkey
Vast Exploration, Canada
Western Zagros, Canada
Operational Oil Fields With Foreign Partners
Ahdab, Wasit
Badra, Wasit
Gharraf, Dhi Qar
Halfaya, Maysan
Majnoon, Basra
Najma, Ninewa
Nasiriyah, Dhi Qar
Qayara, Ninewa
South Rumaila, Basra
Taq Taq, Irbil
Tawke, Dohuk
West Qurna 1, Basra
West Qurna 2, Basra
Zubayr, Basra
TOTALS:
Oil Ministry Oil Deals: 12
Kurdistan Regional Government Oil Deals: 37
Number of Fields Producing Oil: 14
Number of Foreign Companies That Signed Deals With Iraq: 46
Companies By Country of Origin:
• Angola: 1
• Australia: 1
• Canada: 8
• China: 1
• China-Switzerland: 1
• England: 2
• England-Holland: 1
• France: 2
• Hungary: 1
• India: 1
• Italy: 1
• Japan: 4
• Malaysia: 1
• Norway: 2
• Russia: 3
• South Korea: 2
• Turkey: 5
• U.S.: 9
Number of Foreign Companies Producing Oil In Iraq: 21
Companies By Country of Origin:
• Angola: 1 - Sonangol
• Canada-Switzerland: 1 - Addax Petroleum
• China: 2 - China National Petroleum Corporation, Sinopec
• England: 1 - British Petroleum
• England-Holland: 1 - Royal Dutch Shell
• France: 1 - Total
• Italy: 1 - Eni
• Japan: 4 - Inpex, Japex, JGC Corporation, Nippon Oil
• Malaysia: 1 - Petronas
• Norway: 2 - DNO, Statoil Hydro
• Russia: 1 - Gazprom
• South Korea: 1 - Korea Gas Corporation
• Turkey: 2 - Genel Enerji, TPAO
• U.S.: 2 - Exxon Mobile, Occidental Petroleum
FOOTNOTES
1. Hunt, “Kurdistan Regional Government Signs Oil and Gas Contract with US Based Hunt Oil Company,” 9/8/07
SOURCES
Baker, David, “Seeking Iraq’s oil prize,” San Francisco Chronicle, 1/26/05
Bignell, Paul, “Secret memos expose link between oil firms and invasion of Iraq,” Independent, 4/19/11
Calgary Herald, “Talisman heads into Iraq with $300-million stake,” 6/24/08
Chon, Gina, “Big Oil Ready for Big Gamble in Iraq,” Wall Street Journal, 6/24/09
Cummins, Chip, “Iraq’s Oil Patch Opens the Spigot,” Wall Street Journal, 11/11/10
Davis, Andrew, “Eni, Partners Reaches Key Production Target at Zubair Oil Field in Iraq,” Bloomberg, 12/5/10
DNO International Asa, “DNO International ASA – Annual Statement of Reserves,” 4/18/11
Dow Jones, “BP, CNPC First to Receive Development Costs,” Iraq Business News, 2/23/11
Forbes & Manhattan, “Vast Exploration Inc.-Successful Spudding of First Well in Kurdistan Region-Iraq,” 5/12/10
Hafidh, Hassan, “Impasse On Kurdish Exports Signals Broader Iraq Oil Uncertainty,” Dow Jones, 12/31/10
HIS, “A&T Petroleum Co finally starts testing Bina Bawi 1 – Iraq,” 2007
Hunt, “Kurdistan Regional Government Signs Oil and Gas Contract with US Based Hunt Oil Company,” 9/8/07
International Crisis Group, “Oil for Soil: Toward a Grand Bargain on Iraq and the Kurds,” 10/28/08
Iraq Business News, “CROSCO Wins Drilling Contract in Kurdistan,” 4/14/11
- “Groundstar Resources Drilling Update on Qara Dagh,” 4/8/11
- “Gulf Keystone Announces Annual Results,” 4/11/11
- “Gulf Keystone Jumps 20% on Oil Find,” 3/18/11
- “Heritage Oil Down 4% Following Final Results,” 4/19/11
- “Kurdistan “New Hotbed for M&A Activity,” 10/15/10
- “ShaMaran Starts Drilling at Pulkhana-9,” 4/5/11
- “ShaMaran Strikes Oil in Kurdistan,” 4/13/11
- “Sterling Energy Annual Results,” 3/28/11
- “Update on Qara Dagh Exploration Well in Kurdistan,” 1/14/11
- “WesternZagros Down 18% on Going Concern Worries,” 4/12/11
- “WesternZagros Falls After Audit Results,” 2/22/11
- “WesternZagros to Raise C$40m in Share Placing,” 2/23/11
- “WesternZagros to Start Testing at Sarqala,” 4/19/11
KRG, “KRG signs five more petroleum contracts,” 11/12/07
News World Communications, “Iraqi Oil Strategy Divides State, White House,” 12/28/02
Perenco Oil and Gas, “Northern Iraq”
Petoil, “Iraq”
Range Energy Resources Inc., “Corporate Presentation,” October 2010
Rasheed, Ahmed, “UPDATE 1-Iraq to pay expenses to oil firms in Kurdish region,” Reuters, 1/19/11
Reuters, “FACTBOX-Oil companies active in Iraqi Kurdistan,” 1/5/11
- “UPDATE 2-Dogan’s energy unit takes 50% in two Iraq projects,” 6/29/09
Rigzone, “Reliance Industries Awarded Two Blocks by Kurdistan Regional Government,” 11/12/07
Seeking Alpha, “Iraqi Kurdistan: One of the World’s Most Coveted Oil Fields,” 6/25/09
Special Inspector General for Iraq Reconstruction,” Quarterly Report and Semiannual Report to the United States Congress,” 1/30/11
Al-Wannan, Jaafar, “Oil committee casts shadow on Iraq’s forecasted 12m bpd exports,” AK News, 3/30/11
19 comments:
I feel compelled to comment.
The war was an opportunistic effort to secure global oil supplies.
Your figures show that the vast majority of oil deals went to European and US (inc Canadian) companies, and by far the largest producing fields. You also seem to be suggesting that because this did not happen immediately (but is now the case) that this somehow disproves the idea that oil was a dominant factor in the decision to go to war.
This is a very long term effort. Our economies are intrinsically tied to the price of oil, you simply cannot overstate its importance. I find the idea that, securing the worlds second largest oil field was of no consideration to the statesman deciding to wage war, to be laughable and naive. It is broadly accepted amongst political elites that this is so, even Allan Greenspan admitted to it in his autobiography.
Saddam presented us an opportunity to secure those oil fields and we took it. The hundreds of thousands of dead civilians were simply collateral damage in our economic war.
I don't think you have much of a case. It basically comes down to the West is dependent upon oil, Iraq has it, western oil companies are now in Iraq, therefore the war was about petroleum.
There were some in the Bush administration before 2003 that wanted the U.S. to take over Iraq's oil, but they were opposed by other elements within the government. Why didn't the U.S. take over the oil?
There were pushes by British oil companies to get into Iraq right after the U.S. invasion. That didn't happen until the end of 2009. Why the long wait?
While the U.S. actually ran Iraq under the Coalition Provisional Authority there was discussion about what to do with Iraq's oil. Bremer decided to maintain it as a state monopoly. Why did they do that instead of privatize it?
It took until 2011 for Iraq's oil exports to reach pre-2003 levels. If it was about getting oil from Iraq, the West was getting less of it for 8 years.
After the U.S. turned over sovereignty to Iraq in 2005, there was no drive to push them into privatizing or getting Western companies in either. Why?
If the war was about getting oil supplies, why did it take until 2009 for Iraq to open up to foreign companies?
Do you know about the terms offered in the 2 bidding rounds? The government maintains 50% shares in all the joint venture companies, as well as control of the infrastructure, and sales. The companies had to pay huge fees to register, signing bonuses to Baghdad, other cash offers afterward, plus the profit margins are very small, and the businesses can't claim the oil reserves from the fields they are working on in their books as the vast majority of other countries in the world offer. Basically the government is going to reap most of the money from these oil deals, not the companies.
The 2009 bidding rounds were also open to around 50 companies from various parts of the world. The companies that won all gave into the Oil Ministry's terms, which were very tough. The winners were willing to give up profits to gain access to Iraq. Again, that points to the government having the upper hand in the process.
Also the reason why Iraq finally opened up to foreign companies in 2009 was because the Oil Ministry had reached its limit for what it could do with the industry. Production had hit a plateau. The infrastructure was regressing. If they didn't bring in foreign companies they were not going to be able to boost production and have the funds necessary to rebuild and expand the pipelines, wells, ports, etc. necessary to fund and develop the rest of the country because it is almost completely dependent upon oil.
Finally, the U.S. was buying oil from Iraq before the 2003 invasion.
Today the oil industry remains largely under state control and direction, and the government is reaping the profits. I can't see that history of events as proving that the U.S. or other European countries have taken over Iraq's petroleum.
I'm making a broad case. Your specifics are correct but besides the point. The oil in Iraq is now secure for the long term. And by secure I don't mean safe profits for Shell and BP, I mean a steady flow of cheap oil that will continue to keep our economies turning over for the foreseeable future. The minutia of who, how, when, where... etc don't change the overall war aims.
Saddam was a threat to the region with regards to this kind of safe, steady flow. He'd already proven this with Kuwait.
Greenspan said: "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil" http://www.timesonline.co.uk/tol/news/world/article2461214.ece
He qualified this somewhat, but ultimately said the same thing: He said than when he made the argument that ousting Saddam Hussein was "essential" because of the threat he posed to U.S. oil interests in the region, White House officials told him "Well, unfortunately, we can't talk about oil."
http://www.cbsnews.com/stories/2007/09/17/the_skinny/main3267685.shtml
There was, of course a heavy dose of neocon imperialist ideology at play too. But the post 9/11, early success in Afghanistan moment, offered us the opportunity to secure a vital slice of the worlds most important dwindling resource. It's hugely vulgar to admit our true intentions, but rather important for our democracy to do so.
P.S. TDE said: Your figures show that the vast majority of oil deals went to European and US (inc Canadian) companies, and by far the largest producing fields.
Here are the three largest fields auctioned off in 2009:
South Rumaila 17.8 bil/bar - British Petroleum and China National Petroleum Corporation.
This went to BP, which lobbied the Blair administration in 2002 for access to Iraqi oil. Seven years later they finally got a piece of the pie. It is in a consortium with a Chinese company as well. China opposed the Iraq war. Before 9/11 there was a push within the Bush administration to get tough with China as well. The Chinese also were the first foreign country to get an oil deal with Iraq. Are you saying that the U.S. and England invaded Iraq so that Chinese oil companies could get in as well?
West Qurna 2 12.8676 bil/bar - Russia's Lukoil, Norway's Statoil Hydro
This is the second largest field. Russia was also opposed to the Iraq war. Norway did end up joining the Coalition of the Willing and sending troops though.
Majnoon 12.58 bil/bar - Shell, Malaysia's Petronas
This is the third largest field. Again, Shell lobbied the Blair administration in 2002 as well. Malaysia however was opposed to the Iraq war.
So did the U.S. go to war so that both supporters and opponents could get in on Iraqi oil? Or does it just matter that foreign companies are in Iraq?
So of the top three oil fields, each has one or more European oil companies.
Also, you are correct to note that China and Russia opposed the war, however after a few years with companies pumping oil in Iraq, when the recent UN vote on military action in Libya was proposed, instead of vetoing, they abstained. Libya has Africa's largest reserves of oil, the worlds ninth largest reserves. I wonder what Libyan fields they'll be pumping in ten years? Will we have the same discussion then?
I'm guessing my other reply didn't make it through. In short I said that I was making a broad point regarding oil security and the long term war aims of preserving our economies. It isn't about the specifics of who profits directly, just that the supply remains stable.
It was this point that Allan Greenspan making when he said: “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,”
http://www.timesonline.co.uk/tol/news/world/article2461214.ece
He went on to qualify his statement by saying almost the same thing: He said than when he made the argument that ousting Saddam Hussein was "essential" because of the threat he posed to U.S. oil interests in the region, White House officials told him "Well, unfortunately, we can't talk about oil."
http://www.cbsnews.com/stories/2007/09/17/the_skinny/main3267685.shtml
I would say his comments need addressing by people who claim oil was not why we went to war.
1) I don't think Libya has any relevance to whether the Iraq war was about oil
2) I'm aware of Greenspan's comments about the Iraq war. Last time I checked however he didn't have any role in decision making in the Bush administration. He could look at Iraq and think that oil was the major concern since that's Iraq's greatest asset, but have no idea nor role in what the Bush White House was thinking and arguing over the war.
A couple further points.
1) The U.S. and the rest of the world were buying Iraqi oil before the U.S. invasion so there was a steady flow of petroleum coming out of Iraq, it was just a limited amount because of U.N. sanctions. In fact, the U.S. invasion reduced Iraq's exports for the next 8 years. It wasn't until 2011 that export levels reached pre-war numbers.
2) If the Iraq war was just about having a steady flow of oil and not what companies or countries got it, then the U.S. could've simply moved to end U.N. sanctions and then foreign oil companies would've returned to the country. Saddam desperately wanted that to happen and was not opposed to joint ventures with international companies, and actually offered better terms than the current Iraqi government offered in 2009.
Sorry for all these follow up points, but a couple more.
I think that oil did play a role in the decision making to invade Iraq, but I think Bush officials were concerned that Saddam was a threat to the free flow of oil through the Persian Gulf.
Also I try to avoid reductionist thinking when analyzing things, especially trying to take a neo-Marxist opinion of putting everything on economics as the driving force behind decisions.
If you take that view that Iraq was all about oil, then couldn't you argue from 2003-2008 that the U.S. had failed because there were no oil companies in Iraq, and oil production was below pre-war levels?
A reductionist view just seems to ignore all the details about what went into the decision to invade and the events afterward. Basically the argument is Iraq has oil, there's oil companies there, so therefore the war must be about oil.
In 2010 the largest amount of foreign investment in Iraq was in real estate. Couldn't you then say that since Iraq has land and needs housing and that there are now foreign companies investing billions into that sector that the Iraq war was about real estate?
I think this is an interesting topic which may never be settled, and there are a couple of minor points I'll add.
Firstly, regarding your points about how Iraq is now linking to the decision to invade: almost no-one realised Iraq would turn into such a mess. I believe the original plan was to take out Saddam and within a year a new functioning government would be in place. Bremer wanted Iraq to maintain basic refinement capabilities and privatise the industry (the latter I'm not 100% sure of). I think the way in which the war developed perhaps completely changed the game.
Secondly, the entire world was watching so if the US did have plans to access Iraqs oil it would not have occured in an explicit fashion, as that would fuel criticism of the war at that time.
That being said, none of this by itself proves the war was about oil. But the war was clearly manufactured and nothing to do with WMD...so what was the motivation then? I think ultimately it was opportunistic in the wake of the 9/11 hysteria. Saddam was unpopular in his country, Iran was growing in influence, and Iraq was a major strategic interest in the region, and possessed massive oil reserves. Perhaps there was no single stimulus, just a continuation of US foreign policy in the middle east.
Another possible theory (though unsubstantiated) is that the mess in Iraq was intentially allowed to develop in order to polarise the region and provide premise for further US involvement. This is based on shockingly bad pre-war planning and post war decisions. Divide and conquer?
I would be interested to hear your thoughts on this, as you possess a great deal of knowledge about the Iraq war.
Anon,
I have no doubt that oil played a role in the decision to invade Iraq. I don't think it was the sole concern, nor the main one however.
First, you have to realize that the Bush administration was deeply divided, had a variety of opinions, and was dysfunctional when it came to foreign policy. Powell was opposed to the war at first, Rumsfeld was not a neocon, etc.
Second, there were discussions before the war within the White House by some to take over Iraq's oil, some conservative think tanks wanted to use it to break up OPEC, but there is no evidence that it ever became policy.
Third, Rumsfeld also argued that Iraq was a threat to the free flow of oil through the Persian Gulf.
Fourth, Bremer decided not to privatize Iraq's oil because it would cause an uproar with Iraqis who are very nationalistic about the industry.
Fifth, read the Senate Intelligence reports on pre-war intelligence. U.S. intelligence whole heartedly believed that Iraq had WMD, and that its program was bigger than before the Gulf War. They were completely wrong, but they didn't lie about it before the war, it was just horrible intelligence work based upon assumptions created by Saddam's behavior in the 1990s. As Deputy Sec. of Def. Wolfowitz pointed out, WMD was something that everyone in the administration could agree upon.
I personally believe that many of those within the White House who were pushing for the war were largely driven by a belief that Iraq was unfinished business from the Gulf War, and took advantage of 9/11 to place Iraq into the fore, something that Bush was open to.
This is the first time I read this blog and as a researcher in politics and also as an Iraqi citizen, I am quite interested about this debate.
My comment regarding the role of oil in influencing the war's decision is going along with Joel's general analysis and the comment from anonymous. To put it in my way, I think oil was considered from strategic point of view, while other factors like ideology and mass destruction weapons were crucial in encouraging Bush administration to take that decision. We have to put in mind that it was not only about how much oil Iraq has, but also about the Middle East as the most crucial region to secure and maintain the American hegemony, which required, from the administration's viewpoint, to re-emphasize the American hegemony by attacking and toppling an easy target like Saddam, a dictator hated by the majority of his people and whose power was enormously diminished by the previous bombings and 13 years of very strict international sanctions. Iraq's oil was a factor, and an important one, but only within the regional context in which Bush's administration wanted to secure more hegemony, particularly in a time when the alliance with Saudi Arabia was a cause of worry and (discomfort) for the newcons and the administration's ideologues.
Joel,
Wanted to thank you for putting together such a fantastic entry.
I am a college undergrad, and I recently cited a great deal of information which you gathered here in a major paper just a few weeks ago. Your piece was an enormous help.
I can not tell you how refreshing it is to see a well-organized, logically sound, overwhelmingly convincing, and academically-written piece on a topic so poorly understood by so many.
Thanks!
JM,
Glad I could help!
Joel Wing writes
"In fact, the U.S. invasion reduced Iraq's exports for the next 8 years. It wasn't until 2011 that export levels reached pre-war numbers."
The real reason we go into places like Iraq and other places with resources isn't to use their resources, it's to stop them from selling their resources and competing with our international cartels. It's the same thing with the diamond cartels, whenever Russia (or some place) finds another diamond mine the existing cartels buy the land for much less than it's worth and they only mine it once a month. We complain that about the oil cartels and the need to break them up but the fact is that the only reason we want to control the oil supply is because we would like to sell oil for a much higher price and what we really want to do is to concentrate the oil supply into the hands of a smaller group. The 'Oil cartels' that the media blast (ie: Saudi Arabia and others) are seen as competition to U.S. and other international oil companies who want to be the only cartel in town.
So when we go into wars with countries with resources don't always assume it's to use their resources, it could very well be to stop the distribution of their resources and to put resourced land into the hands of fewer entities to inflate prices.
and if you think about it, gas prices have gone up since we invaded Iraq. Why? because when fewer entities have a larger influence over the oil supply it's easier to manipulate prices.
I think the argument that the U.S. invaded Iraq to deny the use of its oil is an even worse argument that we went in to take it over. Many in the Bush administration did not consider oil at all. Others just thought about how Saddam was a strategic threat to the free flow of oil through the Persian Gulf.
After the invasion, the U.S. quickly realized that Iraq was a mess, and that it would take years to rebuild and immediately set about getting oil production and exports going again because it provided over 90% of Iraq's revenue, and they needed that money for reconstruction.
The reason why gas prices have gone up since the invasion are due to a series of factors. The main reason why they have increased in the last year or so is unrest in the Middle East, namely the revolution in Libya, the continued fighting in Syria, the sanctions on Iran, etc. Iraq's oil production has been going up during that period and has actually helped keep prices slightly lower than they would have been otherwise.
Was the Iraq War About Oil?
No, it was more about containing Israel adversaries than about oil.
Read the book: THE POWER OF ISRAEL IN THE UNITED STATES by Professor James Petras:
http://www.social-sciences-and-humanities.com/pdf/The-Power-of-Israel-in-the-United-States-.pdf
I just read the Introduction, and first chapter of that book. I don't buy the argument that Israel was the reason why the U.S. invaded Iraq. The author is actually wrong about how intelligence about Iraq's weapons of mass destruction was formed and argued within the administration, which he pins on pro-Israeli members of the Pentagon. The Office of Special Plans for example, that the author says was behind the fabrication of evidence about Iraq's WMD was actually mostly involved with finding examples of Al Qaeda-Iraq connections, and then was one of many bodies that was supposed to plan for post-war Iraq.
Hi Joel,
In addition to James Petras, there are a few other respected high-ranked academics who rely on their extended study and research to argue that U.S foreign policy in the Middle East hast been greatly influenced by Israeli lobbies. The Israel Lobby and U.S. Foreign Policy is a book by John Mearsheimer, Professor of Political Science at the University of Chicago, and Stephen Walt, Professor of International Relations at the Kennedy School of Government at Harvard University, published in late August 2007. It was a New York Times Best Seller.
Read the book here:
http://mearsheimer.uchicago.edu/pdfs/A0040.pdf
Regards
Alex
The only ranked person in the Bush administration who openly talked about Israel when the debate on Iraq was taking place was Undersecretary of Defense Douglas Feith. Some of his staff were very pro-Israel as well. Feith happened to be despised by other people within the administration. The argument that Israel is the reason why we went to war simply does not hold water.
The one thing that most of the top Bush administration officials and the president himself held in common about Iraq was that they all felt that Iraq was unfinished business from the Gulf War. I would point to that as the reason why these different personalities who all had varying thoughts on Iraq happened to come together and push getting rid of Saddam after 9/11.
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