How exactly does the "this war is to get Iraq's oil" theory work?

Great Debates
1

Apologies, first off, if it sounds like I’m being snotty or snide, or what have you. I’ve heard this line being batted around in discussion both here on the boards and IRL, and I’m genuinely curious as to the theory behind it.

Now in its most hysterical incarnations, the argument is that the U.S. going to take over the country and have free reign over the Iraqi oil fields. Obviously that’s not going to happen.

The scenario that could work, as far as I can figure, would be that the US overthrows Hussein, the UN plops a new government in place, and out of sheer gratitude, the new government gives us oil at bargain rates.

Except this doesn’t make a whole lot of sense financially for the New Iraq. I mean, I really don’t see them squandering their country’s major export out of gratitude.

So am I missing something here, or is the “all for oil” line of rhetoric just that?

2

A better theory is to point the “it’s about oil” theory at France. They have trillion franc contracts with Saddam that might not hold up in a post-Saddam Iraq.

That said, I want to make it clear that I’m not on the French-bashing bandwagon (“freedom fries,” my arse) and am no supporter of Bush. Far from it–about as far from it as you can get. But I just don’t agree with my friends on the left that leaving Saddam in power is a palatable alternative.

For more on this see my blog (http://slackerinc.blog-city.com) and click the link on the side that says “Leftist argument for Iraq war”.

3

As Slackerinc noted, the current contracts for oil (as well as construction and several other money-generating deals) are between Hussein’s government and France and/or Russia (with a couple held by Germany), even though the U.S. is a major importer of Iraqi oil (after it has been purchased by France or Russia).

The theory would be that the U.S. would “discover” that the contracts with Hussein’s government were invalid for whatever reasons and the new administration would negotiate new contracts in which the U.S. would have first dibs. They would not even need to be sweetheart deals. Simply negotiating a “fair” price would lower U.S. costs by cutting out the French or Russian middlemen.

Such rumors were given shot in the arm over the past weekend when some idiot decided to claim that the U.S. was going to allow only U.S. firms to bid on the post-war reconstruction contracts. (This rumor has hurt Tony Blair as various Brits are now asking "Why should we join the fight if only the Yanks will benefit?)

4

I think it’s something more on the lines of:

-Don’t worry, after the war we’ll help you reconstruct
-Sure, but we don’t have any money to pay you
-Well…I guess you could pay us with oil instead…
Another theory goes like this:

George believes Saudi Arabia harbors terrorist and is a rogue state.
But he can’t attack Saudi Arabia because they supply so much oil.
So he finds another country that has lots of oil and that is ruled by a bad guy (so there’s a reason to attack) - Iraq.
Then, remove Saddam from Iraq, install a puppet government and secure the inflow of oil from there.
Now that the US has a secured oil provider, they can take care of the Saudis.

Now I heared this theory on TV; and it was a University Professor who said it was a theory but that he himself didn’t believe to be true…and I don’t either because then if the states starts attacking middle eastern countries like that one after the other something bad is bound to happen…and even though I have my doubts on George’s ability to think clearly, I suspect that someone would tell him that it’s not a good idea…

Just as a side note: I’m against the war; but also against all the propaganda and desinformation that is going on in the media right no…on both sides (pro war people and anti-war activists) - that’s why I hang out at the SDMB…

Also a note on:

I read in the paper about 3 months ago, that, because of the Venezuelan strike, the biggest consumer of Iraqi oil is actually the USA…
I’ll try to dig out a cite for that…

5

For the record, I don’t believe the war is “all about oil” – though I think oil plays a much bigger part than the administration (or the media) acknowledges.

However, there will likely be a large American military presence in Iraq for the forseeable. If post-war Japan and Germany are a guide, we could have bases there for the next half-century at least.

What does this have to do with oil? It’s an implied threat. The US will have a significant military presence in the two largest oil producing nations. In all likelihood we will do very little to restrict the flow of oil. But we could if we wanted to. Nations such as China (a huge growth market) will be keenly aware of this.

Also what tomndebb said. (Though I thought the rumor you mentioned about reconstruction contracts was fact – has it been denied by the administration?)

6

One of the facts that helps support this theory is that Dick Chenney’s company has already been contracted to rebuild Iraq’s oil operations after the war is over.

7

I should have stressed the only. Yeah, USAid has already begun looking for bids–and rather than soliciting open bids, they approached several U.S. companies without announcing their plans.

I suspect that there will be enough work to go around, and that the U.S. companies will need to subcontract to lots of other outfits from other countries–to say nothing of whether the U.S. companies might want to avoid taking the contracts if any biological or chemical weapons get deployed. So while USAid was particularly stupid (or typically stupid) in their actions, it is still premature to claim that only the U.S. will benefit from the cleanup.

8

One solid statement which came from Colin Powell is that Iraq’s oil fields will remain Iraq’s, all right. It’s just that the oil will be held “in trust” by the United States for the benefit of the Iraqi people.

As I have pointed out in the past, when the United States does not have respect for the people for whom they are acting the steward, very bad things can happen. A huge proportion of the $2 billion to $130 billion* which has gone missing from the accounts held by the United States for individual American Indians stems directly from royalties supposedly paid for the systematic exploitation of oil reserves on Indian trust land (you can clearly see James Watt’s tenure as Secretary of the Interior on that graph).

Since the value of oil is directly dependent upon its worldwide production and availability, the United States may find itself in a position where it can control the worldwide price of oil by allowing increased production from oilfields which the United States does not own. That, however, would not necessarily benefit the Iraqi people, as an oil glut would generate less profit per barrel and it is of course non-renewable. Some of us suspect that the U.S. may wind up conflating its own interests with the best interests of the people whose resources are controlled by the U.S.

  • Depending on whether you ask the defendants or the plaintiffs in Cobell v. Norton. Interestingly enough, the defendant–the United States–is desperately seeking to limit the scope of an historical accounting of the missing funds.
9

I’ve heard that the current Iraqi oil infrastructure can provide 3.5M barrels/day. With US improvements, that could easily become 5 M barrels per day. Increasing production in Iraq would probably also cause OPEC countries to increase as well to maintain their share of the pie. This would drive oil prices down, and probably boost our economy, of which oil is the lifeblood.

I for one simply think that GW is afraid of not getting re-elected. (Keep in mind the recent opinion poll that indicated that any un-named demo opponent might win in the next election).

Invading Iraq is a bet. If it works out as planned, he’ll look great, the economy will rebound, etc. If it utterly fails, well, he personally may not have much to lose, anyway.

Now that it look inevitable that we’re going to war, I’ll pray for the best and predict the worst. I think its a horrible mistake we’re making.

10

“One of the facts that helps support this theory is that Dick Chenney’s company has already been contracted to rebuild Iraq’s oil operations after the war is over.”

I was waiting for someone to trot this out.

If by “Dick Chennney’s (sic) company” you mean Kellogg, Brown & Root, a subsidiary of the company Halliburton, then you would be correct. Not really Cheney’s company, but whatever.

If by “has already been contracted to rebuild Iraq’s oil operations after the war is over” you mean “has been hired to put out any oil well fires” then you would also be correct.

Sheesh

11

The reason we want control of the oil fields is because with that control we can virtually render OPEC powerless. By being able to control Iraqs output we would control the price of oil by manipulating the availability in direct reaction to OPEC.
This would of course allow the US to maintain control over the worlds economy and in fact increase that control substantially. Another factor is the widespread use of Dollars to purchase oil and to back many countries economies. The dollar being the preferred currency in the world basically means that the US gets a piece of virtually every monetary transaction that occurs in the world. This however has been greatly threatened by the Euro. Iraq probably sealed its fate more by adopting the Euro as its petro-dollar of choice, than by any aggresive tendencies. A large scale shift in the world economy from the dollar to the Euro would have immense consequences for the US.
Basically we are going to war becasue our economy is in serious trouble both at home and abroad. The dollar is fast losing its attractiveness. The Bush administration is playing a deadly game of high stakes poker. Our success in Iraq will either shore up the dollar and keep us in control of the world economy or (and I really can’t help thinking that Bush has neglected to fully examine this outcome), between the mounting deficits and the arrogant refusal to work within an international framework will lead to an even faster conversion to the Euro and a subsequent failure of our economy that will make the 30’s look like the good old days.

12

Well PhuQan G Nyus, I did read your post. More than once. I don’t understand whatever it is you’re trying to say.

13

I understand what he is saying. He’s just wrong. Didn’t mention anything about the enormous dollar reserves carried by countries around the world.

14

Those reserves are exactly the problem I am speaking of. Should a sizeable number of those countries move to backing their reserves with Euros rather than Dollars the US economy will suffer greatly. The fact that most oil is bought and sold using dollars has a lot to do with the Dollars attractiveness. It basically leaves oil as a “backing” (think gold as the past “backing” for the dollar). The dollar is very tightly bound to oil and its value fluctuates with it. The Euro though is becoming a very secure and trusted currency that does not have the trillions of dollars of debt baggage to carry around with it. The Euro’s growing popularity is a major threat to our economy. I am sure that is not lost on the french, and other members of the EU.

15

I think we’re getting dangerously close to head-knocking territory.

In that spirit, would a moderator please remove that parenthetical swipe I made a James Watt? It’s unnecessary, and worse, in looking over the figures I find that it’s inaccurate in its implication.

16

The San Francisco Chronicle published an article (fact article, not column) a few months ago. Some particulars:

Iraq has the second largest proven oil reserves in the world, after Saudi Arabia.

Iraq has existing development contracts on their various fields with France, Russia, and China (as I recall).

Two different leading members of the Iraqi National Congress (the exiled-Iraqi want-to-overthrow-Saddam group) were quoted. One said that if they get into power, they would reconsider the existing oil contracts ‘in the interests of the Iraqi people.’ The other specified they would cancel the contracts and open them to American bidding. The members had titles indicating they were high up in the INC–one might have been the president, one the public communications official (memory quite vague here).

End of article; beginning of comment.

So it would not be gratitude after the fact, but a deal struck in advance with our Administration, to have America invade and put them into power.

Actually, given how Nice it would be for the US to be making all the decisions on the enormous oil reserves, the INC may be out of luck, as we don’t need them as they do us. We are going to be running the country; we are going to incur enormous expenses; surely the Administration will require reparations paid in oil; the USA keeps the books; the USA will be getting into further expenses if the existing trends are any indication; the justifications could go on till the oil runs out.

As said earlier, it could break OPEC, as well as putting the Administration’s oil-industry friends into the position of being at the location where underground sources convert into money.

It could be about other things than oil: the USA gets to be an empire; Saddam is evil (but we don’t do this to the other evil regimes); we’re doing this for the stability of the Middle East (?!); it’s revenge for the attempted assassination; etc.

Maybe we’re doing this to install democracy in Iraq, but the Pres in his speech yesterday said Local government, not Democratic government.

Yes, Saddam is disgusting and his people don’t deserve him, and he rewards Palestinian bombers. But.

Given that the USA has not come up with good evidence of most of the charges (links to Al Quaeda; effective WMD; Saddam would hand nukes or bios over to the control of others), there is a vaccuum where the reasons should be, if not oil.

17

This seems to be developing into a debate, so I’ll move this over to GD. I don’t think there was ever much chance of keeping this one non-political, but we would still appreciate it if you all would refrain from politicking as long as the thread is in GQ.

bibliophage
moderator GQ

18

Did anyone else notice that President Bush implied in his speech last night that Iraqi’s destroying their own oil wells could be viewed as a war crime?

Does he want me to be more paranoid about his motives?:rolleyes:

19

I dont see why you should get all paranoic about, aubries.

Oil is the only resource that can save the Iraqi economy. To deliberately destroy your nations life blood tp spit your enemy shows a callous disregard for the iraqi people. There is no military or strategic advantage to destroying those wells.

If you want to be paranoic, consider this. France handles the Oil for Food program instituted by the UN during the UN imposed Iraq sanctions. It is managed by a French bank that some believe was personally selected by Saddam Hussien.

20

…grrrrrr must learn to type…

That should be “to spite your enemy…”