Iraq war, a resource war?

I posted this here because it seems like the most appropriate area, I could be wrong as I often am though, so throw me where I belong if need be.

Okay no matter your political leanings, can you say wrong or right and why with this scenerio.

China wants oil, America wants oil, Iraq has the second largest proven oil reserves. The US government finds out we are closer to oil depletion then the USGS has predicted. SA has more oil then Iraq but is friendlier toward the US, Iraq and SH would love nothing more then to send its oil to China rather then the USA plus we have more “reasons” to attack Iraq for the population to agree with the attack.
Now we have the first and second largest reserves in our favor, which means if oil depletion was happening we can continue our way of life for a few extra years allowing time for alternatives to take hold where as if we didn’t hold Iraq’s oil we would experience the shortage much sooner?

I know it sounds conspiracy minded but with the current administrations ties to oil it would be easy to see them getting inside information about oil depletion.

And it makes sense now you have China courting other oil producing countries that are not US friendly (Venezuela comes to mind) to ensure a supply of oil for them.

Now I know that doesn’t justify the war in some peoples eyes even if it was the cause, it would still be lying to the people, but resource wars have always been around and if this was the case, would your opinion on the war itself change? (Not your opinion on the President just the reasoning behind the war)

There’s where this explanation falls down in my opinion. Why should SH (or any other Iraqi government inimical to the US) have wanted to sell oil to anyone but the highest bidder?

case a) SH in power, with sanctions: Iraq sells some oil to the world market, at world market price.

case b) SH in power, without sanctions: Iraq sells a lot of oil to the world market, at a slightly lower market price (because there is more producing capacity overall).

case c) an US-friendly government in power (and Iraq’s oil industry not being blown up): Iraq also sells a lot of oil to the world market, at the same price as case b)

What’s the difference, from the point of view of the US’s national interest, between cases b) and c) ?

Highest bidder no longer matters if we have soldiers on the ground deciding where those resources go, I am speaking hypothetically like in the next year a “oil crisis” is announced. Where Iraq’s oil goes to the USA not to China no matter the money cost.

OPEC nations have done this in the past. To punish the USA, so its not a huge reach to see SH doing so if oil does go down in production world wide.

But if the OP was correct, would that change your view on the war?

Wait- but if the U.S. is obviously redirecting oil supplies to itself without care, what’s to keep OPEC from responding by selling cheap to China?

Your scenario is completely unrealistic and doesn’t reflect an accurate understanding of either global politics or the world oil market.

Nations don’t really choose what other nations to whom they sell oil. Oil is sold on a world market, not a nation-by-nation market. If some country doesn’t want the US to get oil, it’s impossible for them to prevent oil from being sold to the U.S. They would have to completely keep their oil off the world market, which would harm them as much as it would the world market.

In the 1970’s OPEC did not choose to sell oil to other nations but not the U.S. OPEC decided to restrict the supply of oil worldwide and thus drive up the price.

It isn’t just that the U.S. might be in a position to redirect (cheap) oil sales to itself. Oil doesn’t (normally) bubble out from the ground on its own. Nor does it come in the various necessary states of refinement and by products useful for various purposes.

The U.S. is in a very strong position to sell oil extraction, refinement/processing equipment. Up until the invasion, France, Germany and Russia were in a strong position to do that. Not anymore. Halliburton is the key contractor now.

So who in OPEC that isn’t Saudi, Kuwait and now Iraq is going to strongly influence selling cheap oil to China? Maybe Iran. It will surprise me if the U.S. isn’t liberating Iran and dismantling their nuclear program in a few short years.

In my hypothetical scenerio the top oil producing nations are favorable to the USA, Saudi Arabia, Kuwuit, Iraq. So why would OPEC do that? And if this was a resource war, Iran would be next on the war front.

I am not saying I believe it, it just seems plausible to my untrained eyes. And I am asking if this was the case the USA needed the oil, as they knew oil was depleting and soon to be on the down swing, would that change anyone’s view on the war itself.

Imagine oil at XXX a barrel we need 500m barrels, China needs 500m barrels but thats all the oil there is for sale that week if we do not get it our nation grinds to a halt, if China does not get it her nation grinds to a halt. I imagine every government would like to have a huge exxon station nation to ensure they get the oil they need.

That’s not entirely true. The U.S. was able to keep Iraq from selling their oil to other nations. There were incidents where oil cargo ships were stopped and diverted by the U.S. Were there not?

Of course, no country in it’s right mind would try to prevent the sale of oil to the U.S. in this day and age of U.S. economic, political and military superiority. But that isn’t to say that this cannot change in the future. Besides, the U.S. doesn’t always get everything that they want. Look at the nuclear issues in Iran, N.Korea and Israel, just for example.

No my reasoning my not be valid in todays terms or in the way things work. But they are valid in the terms of this scenerio, if you can explain in any terms how oil will hit the world market in any way if we need 100million barrels and Iraq has the 100 million barrels we need if they where the last 100 million barrels in the Earth. 

I think it would be our tankers over there taking our oil from Iraq.

Look, suppose Iraq under Saddam Hussein decided to stop selling oil to “The United States”. Never mind that the the oil industry in the US is privately owned, not owned by the US government, let’s say Saddam decided to stop selling oil to US based companies. What that means is that non-US oil companies can buy Saddam’s oil at slightly below market price, while US oil companies have to buy oil at slightly above market price. It doesn’t mean that the US is suddenly screwed. Why? Because oil is a commodity. If British Petroleum can buy Saddam’s oil, they can sell it anywhere in the world there is a demand for oil…including the US. Why would British Petroleum sell oil in the UK for (say) $1/liter, if they can sell it to a US company for $1.01/liter?

What happens is that every oil producing country sells oil on the world market, and every oil consuming country buys oil on the world market. If country A will sell to country B but not to country C, there still is no mechanism to prevent country B from reselling to country C. All that changes is that country A gets a slightly lower price, country C pays a slightly higher price, and country B makes a small profit in transaction costs.

Saudi Arabia couldn’t refuse to sell oil only to the US, what it did was organize the OPEC countries to reduce production globally. Lowered supply, same demand meant higher price per unit for the oil that was sold.

As for the idea that we’ll go into a country militarily and start pumping their oil back to the US, what exactly does that mean? Will the US government nationalize the US oil industry and gasoline infrastructure? Will the US government just give the oil it stole to US oil companies? If US oil companies aren’t nationalized, or effectively nationalized, how can the US government prevent that oil from being resold overseas? Will the US government start handing out free gasoline to all US citizens? How exactly would US government officials benefit from the takeover?

And there’s no such thing as “the last 100 million barrels in the Earth.” That is fantasy. We aren’t going to pump and pump and pump at cheap oil at full capacity until one day the last gallon is pumped and there’s no more oil. What will happen is that oil will get more and more and more expensive as the easily recoverable oil is pumped…but easily recoverable oil is only a small part of global oil stocks. But difficult oil costs more to extract, so the price will be higher. Higher price means…lower demand. Higher price also means that alternative fuels are relatively cheaper. No one drives a hydrogen powered car today because it would be much more expensive than a gasoline powered car. What if gasoline were $10/gallon? Suddenly hydrogen is cheaper, gasoline is more expensive. People switch to hydrogen, but then a funny thing happens, demand for gasoline decreases as more people switch, which means lower gasoline prices again. In other words, the cost of running a car on hydrogen is the ceiling, gasoline can’t get more expensive than that or no one will use it.

I believe the government will do what ever it takes to secure oil. This in no way is a oil depletion thread, its a what if thread. If it was a oil depletion thread I would of added it to the others I have seen. I do not believe in “peak oil” as the end of time, or something that is going to happen tomorrow. I am saying what if, would that change your views on the war.

And in my scenerio you have to be kidding yourself if you think the USA or any other nation would not do anything and everything to secure the last of the “cheap” oil before a competing nation does. Up to and above taking control of the oil industry.

With or without my scenerio the economy would utterly crash depression era 21st century style before gas hits $10 a gallon. But thats off of what I was trying to express.

I understand what you are saying Lemur866. In theory I agree with you and the commodity nature of oil. However, in practice we have to keep in mind that U.S. politics is highly influenced by lobby groups. At no other time in my memory (of casual observance of U.S. politics) have I seen an administration with more obvious ties to the oil industry. So while the U.S. military forces are not pumping Exxon tankers full of stolen Iraqi oil, they are helping pave the way for a strong U.S. Big Oil Co. presence in a key oil producing country which was previously unfriendly towards the U.S.

So while 1 cent above market for a gallon of gas may not seem like much of a markup, it begins to add up when we’re talking about millions of gallons. As demand increases and supply begins to shrink, the markup will likely be much more than a penny a gallon. And again, more U.S. money going into foreign pockets and not being spent domestically.

So while I don’t believe oil was the soul reason for occupying Iraq, I’m certainly not naive enough to believe it wasn’t part of the motivation.

No, it is true. The United Nations, not the U.S., imposed sanctions on Iraq that kept it from selling most of its oil. The world community decided not to buy from Iraq, and even that didn’t work out so well.

Completely mixed analogies. To repeat, oil is bought and sold on the world market. Let’s say that somehow Iraq could decide that it didn’t want to sell oil to the U.S. and it could actually accomplish this. Let’s also say, for the sake of argument, that the worldwide consumption of oil is 1 billion barrels a year and Iraq controls 100 million of them. So Iraq shifts its 100 million to China. Well, that would displace the oil that would have been going to China, and now that must be sold somewhere else. Hmmm, who needs oil? The U.S. So the U.S. would get its oil, but from a different nation’s well. Do you see how it would be futile for any nation to decide that it didn’t want to sell to another nation? Unless that nation can enforce a blockade, there would be no way to do this.

Your scenario is unrealitic today and is unrealistic for the future.

Change a few things and you can see what scenerio I am trying to “make” believe. The worldwide consumption is 1 billion, Iraq has 100million, The US and allies need 1 billion barrels, Iraq shifts its 100million to China the US and allies now have a deficit of 100million. I am talking about a deficit of oil in my make believe world to set up the question, would that change your view of this war?

Then, guess what? Companies that are selling the oil from other nations that see the price of oil rising (simple economics – when there is a shortage, prices rise) will sell to whomever is willing to pay the highest price. Therefore the U.S. will get all the oil it needs.

Oil, like any other commodity, follows the highest price.

Again, your scenario is unrealistic.

And again I want to know how that is unrealistic, China’s purchasing power parity- GDP 7.262 trillion with 9.1% growth USA’s purchasing power parity- GDP $11.75 trillion with 4.4% growth, so doesn’t that mean China can realistically buy oil for whatever the cost much like us? Now you have oil at a million a barrel, if thats the last of the oil, the ones who control the oil producing countries control the oil.

To use one of those smart people things that I cannot think of the proper name, I am sure you can help me there. If you and I and one other where stranded in the desert 500 miles from safety, you had enough food and water to get two of us out, I had a million dollars and the other guy had a gun to your head, who gets the food and water?


GDP has nothing to do with it. A nation’s GDP doesn’t purchase oil, and a nation’s government doesn’t buy oil for the nation.

In short, if there is a shortage of oil the oil will go to whomever pays more. In fact, right now there is a shortage of oil. That’s why it costs money. When there is more demand for a product than there is a supply, that means it must be allocated by prices. All that would happen in your scenario is that prices would rise dramatically. It doesn’t mean that all of a sudden oil to the U.S. would dry up and we would need to stage a military venture to recover it.

Iraq was left alone, the sanctions dropped, and CNOOC came into Iraq with Iraq’s approval started drilling and rebuilding the oil industry, oil becomes more scarce, CNOOC will sale the oil to the USA or China? Even if the USA offered more per barrel?

What? I have no idea what you are asking.

It’s not a matter of selling to the U.S. or China. That’s not how the oil market works. Oil is a worldwide commodity, and it’s not sold country-by-country. It’s sold to oil companies that distribute it based on who is willing to pay the highest prices. The U.S. government is not buying oil for the entire U.S. and then selling it to gas stations. The Chinese government is not buying oil for China.

CNOOC ( China National Offshore Oil Corporation) is the Exxon except owned by the Chinese government.
The government does not have to buy the oil they just have to ensure the supply remains!

I will repeat the part you may of not understood.

We never invaded Iraq, eventually the sanctions get dropped because well it was bound to happen, CNOOC went into Iraq with SH’s permission to rebuild and help bring the oil industry back up to speed pumping 100million barrels a year.
Now the US needs 600 million barrels a year, and China needs 400million, but only 900million barrels a year are coming up from the pumps. The US companies buy the oil from SA, Kuwuit, and other nations to make 500million barrels, China needs her oil too, and gets 300 million barrels from the same sources we use SA, Kuwuit and on and on. Now the US and China both are 100million barrels short, who is CNOOC (with Iraq) going to sale the oil too? Now keep a straight face and tell me the USA…