Oil production was always the greedy goal of the Iraq War

Alan Boraas

The Iraq War is over and we won.

We were given many reasons for the Iraq War. We were told the war was to block use of weapons of mass destruction, but there were no WMDs. We were told the war was about terrorism, but the Al Qaida terrorists were not from Iraq and there were no Al Qaida in Iraq. We were told the war was about regime change. We did change the regime and attempt nation building, but it was framed as patriotic altruism and we were not told why that particular nation was targeted for export of our democracy.

The Iraq War was about oil and that's why it's now over.

Before the Iraq invasion Saddam Hussein did two things that jeopardized United States oil interests. First, in 2000, he began selling oil in euros rather than dollars, setting the stage for petrodollar warfare. The dollar had been the international standard for petroleum exchange and that meant national banks had to hold large dollar reserves which they naturally invested in the U.S. Had there been a significant shift to petro-euros, the U.S. economy would have fallen much further than it already has, conversely the euro would likely be stronger.

One of the few who spoke out against "dollar hegemony" was Rep. Ron Paul, currently a Republican presidential candidate. But he was a tiny voice against the neo-conservative power behind the George W. Bush presidency that was not about to let euros become the standard for oil exchange.

Second, in 2002, Saddam placed an embargo on selling Iraqi oil to the U.S. because of our support of Israel's expansionist policies in potential Palestinian areas. Other Arab oil producers considered following suit. Using oil exports as a weapon to blackmail the U.S. into conforming to Arab interests created instability in U.S. oil supplies and did not bode well for the future.

Resolving dollar hegemony and negotiating Israeli/Palestinian/Arab relations could likely have been managed through big stick diplomacy; a little statesmanship would have helped. But 9/11 gave the Bush White House the opportunity to reformulate Iraq in terms compatible with U.S. and British oil interests through a poorly conceived war effort that spent more time manipulating the American mind to favor the war than it did on how to win it. Until now, nothing much changed with President Obama.

In 2009, Iraq auctioned rights to develop its oil fields with stringent stipulations to maximize production and requiring as much as $2 per barrel tax. The winners were broadly international, primarily Russian (Lukoil), Chinese (Chinese National Petroleum Corporation) and European oil companies, although consortiums involving Exxon Mobil were in the mix. Because of the preponderance of non-American corporate interests, that auction seemingly laid to rest the idea that the Iraq War was about oil.

However, the outcome of the Iraq oil field auction is that the largely foreign oil companies assume the risks while subcontractors assume the bulk of the profits. According to Andrew Kramer in the New York Times (June 16th), the auction-winning oil companies will need to invest $150 billion in infrastructure to bring Iraq oil production to the 12 million barrels per day by 2017, the level required of their marginally profitable contracts.

Half of that investment ($75 billion) is going to subcontractors to drill new wells and refurbish old oil fields. Naturally, the companies with the most expertise and best technology are getting the highly profitable contracts and those are Texas-based Halliburton, Baker Hughes, Weatherford International and the French-owned but Houston-based Schlumberger. Not only did Halliburton make billions on the war effort, it and other contractors are now making billions on Iraqi oil. It is no surprise one of the chief architects for the war effort, former Vice President Richard Chaney, is the former head of Halliburton.

Regarding the Iraq War, Kramer cites Lukoil's Andrei Kuzyaev as saying "The strategic interest of the United States is in new oil supplies arriving on the world market, to lower prices. ... For America, the important thing is open access to reserves. And that is what is happening in Iraq."

In the past month Iraq's oil production has reached 2.95 million barrels per day exceeding the 1.9 mbd Saddam-era production and continues to grow. So now the brave soldiers and Marines who for nine years fought and died or came home with crippled bodies and damaged psyches are no longer needed. The oil is flowing, Halliburton and others are getting rich, and the war is won. Mission accomplished.

Alan Boraas is a professor of anthropology at Kenai Peninsula College.

Alan Boraas