Ultimately, this is all about oil and nothing else.
That is another anti-war myth. Where are the economic figures and rational theory to back up such claims? If you think that this war is exclusively about oil, you've really got a dose of Stockholm Syndrome with regard to Saddam.
Reality is different, fortunately:
All about oil?Jan 23rd 2003
From The Economist print edition
Why invading Iraq would not produce an oil bonanza for America“IF WE are the occupying power,” said Colin Powell, America's secretary of state, on January 22nd, Iraq's oil fields “will be held for the benefit of the Iraqi people.” The Bush administration was examining different ways of managing the oil fields in the event of America invading Iraq, he said. Stung by criticism in much of the world that lust for oil is driving its enthusiasm for war, the Bush administration is trying to reassure sceptics that Iraqi oil would not be run only to suit America. Yet even without these assurances, it is far from certain that Iraqi oil could be the bonanza for America that its critics imagine.
These critics claim that any post-Saddam regime—which they presume would be a puppet of America—would move quickly to start pumping out vast quantities of oil. It would surely give in to American pressure to leave the OPEC cartel of price-fixers. Iraq's gushing wells would quickly undermine the cartel's grip, prices would collapse and OPEC might even be destroyed altogether—taking with it such unsavoury regimes as Saudi Arabia's.
Actually, even if Mr Powell's assurances turned out to be flimsier than they appear, there are good reasons to think Iraq would not become either an OPEC -slayer or America's private petrol station. Two new reports on the subject stress the constraints and challenges—not the easy pickings and limitless bounty—that Iraq's oil represents for America.
One report, by the Council on Foreign Relations ( CFR ) and the James Baker Institute of Rice University, argues that Iraq's oil is not the prize it seems from afar. Iraq has vast reserves, but its infrastructure is, in the words of Dutch experts who inspected it a few years ago, in “lamentable” condition. A decade of sanctions and under-investment have cut Iraq's output and done permanent damage.
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In the short run, a war would further disrupt Iraqi production, possibly leading to greater market power for OPEC and maybe $40-per-barrel crude
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In the short run, a war would further disrupt Iraqi production (especially if Saddam Hussein were to destroy oil wells): the result would be greater market power for OPEC and maybe $40-per-barrel crude, says Phil Verleger, an energy economist affiliated to the CFR . After that, even assuming that rebuilding the oil sector were a top priority for a new government, and oil revenues were immediately redirected for that purpose, the CFR -Baker study reckons that it would still take nearly a decade and up to $40 billion to revive Iraq's oil sector. That could lift Iraqi output to 4.2m-6m barrels per day, up from around 2.5m bpd today. However, it would still fall far short of Saudi Arabia's whopping output of over 8m bpd today. That is why no truly independent Iraqi government would ever leave OPEC to go for volume instead: the Saudis have so much more oil than anyone that they will always win a price war.
Besides, talk of a speedy revival of Iraq's oil sector may be too optimistic. A report from the Centre for Strategic and International Studies ( CSIS ) observes that, after a regime change, there would be many competing claims for money that would slow investment in oil: buying food, financing reconstruction, paying for “democracy building” and keeping the peace. Iraq also has debts of over $100 billion—not including war reparations due to Iran and Kuwait for Mr Hussein's past aggressions. However, this argument would be weaker if an occupying American government footed the bill for oil investment.
In an effort to curry favour with anybody ready to oppose UN sanctions, Mr Hussein has offered juicy chunks of Iraq's oil bounty to companies from Russia, China and France—countries whose geopolitical strategies are also tainted by oil. Whether America could tear up such contracts and “pre-contracts” is unclear. American and British firms, which have been prevented from bidding for such contracts, would lobby to have them scratched and retendered (along with other Iraqi oil contracts) in a contest in which they have (at least) a level playing field. But to avoid a legal morass, the CFR -Baker report recommends the immediate creation of a UN dispute-resolution mechanism. Unless some way is found to provide a secure legal framework for oil concessions, much-needed foreign investment in Iraq could be delayed by years while the lawyers bicker.
In short, for all the accusations that America's war plans are motivated by the goal of cheaper oil, there would probably be no such prize, at least for many years. As the CFR -Baker report says: “There has been a great deal of wishful thinking about Iraqi oil.” It does not expect a bonanza.
