One of the most popular themes on the placards of anti-war demonstrators across the United States and Europe is that the looming confrontation is primarily about oil.
US and British ministers dismiss such a charge as the stuff of conspiracy theorists, and instead argue that Iraqi President Saddam Hussein has to be dealt with for one reason: the threat posed by weapons of mass destruction.
And, yet, Western powers have been fighting over Iraq’s ”black gold” for decades. Travelling through the country, it is immediately obvious why this is such a great prize in energy terms.
Around Mosul in the north, flares from oil wells can be seen at regular intervals in the otherwise empty grasslands; even in the centre of the country, in Baghdad, the skyline is lit by the al-Dohra oil refinery; and further south, in the desert scrubland round Basra, there is a huge concentration of wells.
Iraq has the second-biggest known oil reserves in the world, after Saudi Arabia. But its facilities have been starved of investment over the past few decades, partly because of war and partly because of sanctions. The vast al-Dohra facility is a symbol of all that is wrong. In an advanced state of decay, rusting pipes link a series of large, sand-coloured storage tanks, almost every one of which is crudely patched with sheets of steel.
At present Iraq exports about 1,5-million barrels a day, but energy experts say this could be increased to six million barrels within five years after reinvestment.
The US needs access to new energy reserves. American industry and motorists are guzzling gasoline at a rate that easily outstrips the rest of the world while domestic reserves are running out at a time when demand is set to leap.
The US Energy Department frightened politicians with a study in 2001 known as the Cheney Report after the former head of the Halliburton oil services group, now US Vice-President Dick Cheney, who wrote it. He predicted that imported oil would need to rise from 10,4-million barrels a day at present to 16,7-million barrels a day by 2020.
The report spelled out the US dependence on a stable energy market and the need for a foreign policy that would protect America’s energy supply.
”In a global energy marketplace, US energy and economic security are directly linked not only to our domestic and international energy supplies, but to those of our trading partners as well,” it said. ”A significant disruption in world oil supplies could adversely affect our economy and/or ability to promote foreign and economic policy objectives, regardless of the level of US dependence on oil imports.”
Traditionally, the US looked to Saudi Arabia and Venezuela for its crude supplies. But since the September 11 terrorist attacks, carried out in the main by Saudi nationals, the former important Middle East ally has been deemed unreliable, while political turmoil in Venezuela has virtually halted exports to the US.
Washington has been wooing Russia and African nations to secure future supplies, but there is nothing like the ultra-cheap-to-produce reserves in Iraq sitting just below the desert sands.
Professor Peter Odell, professor emeritus of international energy studies at Erasmus University in Rotterdam and a visiting professor at the London School of Economics, rejected the view that oil was the main driving force behind the current Iraq frenzy. ”Its not all about oil. There are other factors such as US fears about weapons of mass destruction, revenge for earlier failures and the fact they believe Iraq has not behaved properly towards the US for 20 years,” he said.
”My own view is that an attack will lead to destruction of Iraqi oilfields as happened in Kuwait and there could be severe oil market problems in the short term.
But it is not just wild-eyed Western peaceniks who believe oil is at the centre — or close to the centre — of the pending conflict. It is quite a commonly held view even in the conservative business world though few are willing to express such things publicly.
Fadel Gheit, a former Mobil chemical engineer and now an investment specialist with New York brokerage firm Fahnestock & Co, told 50 of the largest pension funds and financial investors in the US last month that the expected war was ”all about oil” and that the global fight against terrorism was just ”camouflage” to mask the real purpose.
Later he told The Guardian newspaper a strike against Iraq has become vital in the eyes of Washington because politicians and security chiefs fear that Saudi Arabia, the traditional provider of US oil, is a political ”powder keg” that is going to explode from within. ”Of the 22-million people in Saudi Arabia, half are under the age of 25 and half of them have no jobs. Many want to see the end of the ruling royal family and whether it takes five months or five years, their days are numbered. If Saudi Arabia fell into the hands of Muslim fundamentalists and the exports were stopped, there is not enough spare oil anywhere else to make up the shortfall.”
But Dr Charles Tripp, head of politics at the School of Oriental and African Studies, argues that the idea that oilfields need to be physically seized in order to be controlled is outdated. ”Oil is a part of this, but it is as much to do with asserting American power.”
Oil was a key factor in the first Gulf War, along with protecting the sovereignty of a United Nations member. This time round ”oil” is a word that politicians and officials in both Washington and London are almost afraid to speak, fearful of how it will play in the Arab world.
An independent working group part-sponsored by the Council on Foreign Relations has just handed over a report to President George W Bush entitled Guiding Principles for US Post-Conflict Policy in Iraq. It argues: ”Iraqis have the capability to manage the future direction of their oil industry. A heavy American hand will only convince them, and the rest of the world, that the operation against Iraq was undertaken for imperialist, rather than disarmament reasons. It is in America’s interest to discourage such misconceptions.”
The international oil companies are already circling. The US and British accuse the Russians and the French, especially the French, of playing dangerous games with Iraq, keeping in with Baghdad in the hope of securing favourable oil contracts.
The French Foreign Ministry is infuriated by the suggestion.
Senior oil executives generally want to avoid talking publicly about the issue but privately they say it’s ”rubbish” that they need Iraq so much that they would support a war. Mark Moody-Stuart, a director of Shell and its former chairperson went further, saying that a military strike would unhinge the Middle East and was therefore a ”recipe for disaster’.’
So what do the people at the centre of the impending war think? ”Our oil is the main reason America wants to attack Iraq,” said Ali al-Rawi, head of the economics department at Baghdad University.
”They want to control our oil and control price and production levels. They know the future oil resources for the world will continue to come from this area for many years.” — Â