Oil: More than Strategic and Corporate Interests
September 15, 2009 6:02 PM   Subscribe

Please help me understand the role of oil in the motivations for the 2003 Iraq invasion.

It's generally well known now that oil played some role in the US invasion of Iraq. I have been reading a lot on this subject, and when I get passed the superficial "the war was all about oil" type statements, I find the subject to be very complex, incorporating history, economics, regional politics, etc. I was reading an article titled Blood for Oil? linked in a comment on the blue, and I was trying to understand what the thesis of the article was when it said this:

American empire cannot forgo oil – its control is a geopolitical priority – but strategic and corporate oil interests cannot, in themselves, credibly account for an imperial mission of the sort we have witnessed over the last two years. Rather, what the Iraq adventure represents is less a war for oil than a radical, punitive restructuring of the conditions necessary for expanded profitability – it paves the way, in short, for new rounds of American-led dispossession and capital accumulation...It was intended as the prototype of a new form of military neo-liberalism

What, in laymans terms, is this saying? How did invading Iraq "restructure" the conditions necessary for "expanded profitability"? Who's making the profit? How does such a theory take into account the blowback from the invasion, such as the world getting pissed of at the percieved imperialistic aggression of America? Given that this was written 2005, has anything changed/been validated/disproved since then (oil contracts etc.)?

I know that is a lot of questions, but I guess overall I am just looking for help in understanding the complex role oil played. Additional or competing in depth analysis on the role of oil in the invasion (going past "strategic and corporate oil interests") would be much appreciated. Thank you hivemind.
posted by atmosphere to Law & Government (12 answers total) 5 users marked this as a favorite
 
Retort, a ‘gathering of antagonists to capital and empire’, is based in the San Francisco Bay Area.

Do not expect a reasonable interpretation of events from these authors. In fact, do not expect a reasonable interpretation of events from anyone that attempts to connect the invasion of Iraq to the nebulous specter of "neoliberalism" (booga booga). Even if you believe that the war was an attempt to line certain corporate pocket (and I think the better argument is based on arms contractors), that hardly comports with the usual definitions of liberalism. Look for something that's more systemic and concrete, is where I'm going with this.
posted by Inspector.Gadget at 6:13 PM on September 15, 2009 [2 favorites]


One theory that made it easier to go to war was that Iraq's oil reserves would be immediately productive and would therefore finance the cost of the war. It did not turn out that way.
posted by bonsai forest at 6:26 PM on September 15, 2009 [1 favorite]


How did invading Iraq "restructure" the conditions necessary for "expanded profitability"?

Saddam sure was hell not going to deal constructively with American-associated oil interests, should the sanctions regime be scaled back.

He of course was already pricing his oil trades in Euros. Additionally, his regime owed billions to French and Russian interests and they were to be first in line to be allowed back in -- with UK and US interests to be of course last in line.

Guess who was pushing for war in the 2002-2003 timeperiod?

Who's making the profit?

Not Saddam or the anti-US Baathists, but Chalabi and the INC-associated, pro-US Shiites was the goal going in. US would "get" the North and UK would get the South.

Well, that was the plan but the more radical Shiites were able to seize power and the machinery of state pushing out our lackeys and lessening our multinationals' bargaining position.

How does such a theory take into account the blowback from the invasion

War planners in their hubris underestimated the ability of "dead enders" to mess up their timetables and make the security situation basically untenable.

Still, almost any state of chaos is better than having the oil under the former status quo.

such as the world getting pissed of at the perceived imperialistic aggression of America?

This is how "the world" works. People can stamp their feet and wave their signs in the streets, but at the end of the day the $70 trillion dollar GDP hums along.
posted by Palamedes at 6:28 PM on September 15, 2009 [1 favorite]


People can come up with all the "connections" they want between us needing oil and Iraq having it, but one simple fact outweighs them all:

*WE* were embargoing them. We stopped buying their oil. If we wanted their oil, all we had to do was start buying it.


The Iraq war was simply a misguided show of force, and beneath that, an honest (but again misguided) attempt to create a friendly democracy in the Mideast. I'm not saying a Mideast democracy is a bad idea (Turkey for example), what was stupid was the idea that the Iraqi people would cotton to the idea that we could just walk in there and Xerox off some constitutions and they would cheerfully fall in line.
posted by gjc at 7:04 PM on September 15, 2009


I guess overall I am just looking for help in understanding the complex role oil played. Additional or competing in depth analysis on the role of oil in the invasion (going past "strategic and corporate oil interests") would be much appreciated.

Well, overt military invasion of the middle east and appropriating the oil, is nothing new.

Rather, what the Iraq adventure represents is less a war for oil than a radical, punitive restructuring of the conditions necessary for expanded profitability – it paves the way, in short, for new rounds of American-led dispossession and capital accumulation...It was intended as the prototype of a new form of military neo-liberalism

What, in laymans terms, is this saying? How did invading Iraq "restructure" the conditions necessary for "expanded profitability"?


In layman's terms, it's saying Iraq's economy was a closed shop. The invasion opened it for foreign (i.e. U.S.) ownership and investment - not just oil, but the economy in general. This, according to the article, is a feature of how modern-day capitalism works, you only can get growth from forcibly appropriating other markets and resources, that you don't have already.

This 2004 article elaborates on the idea:

I couldn't help but think about something Senator John McCain had said back in October. Iraq, he said, is “a huge pot of honey that's attracting a lot of flies.” The flies McCain was referring to were the Halliburtons and Bechtels, as well as the venture capitalists who flocked to Iraq in the path cleared by Bradley Fighting Vehicles and laser-guided bombs. The honey that drew them was not just no-bid contracts and Iraq's famed oil wealth but the myriad investment opportunities offered by a country that had just been cracked wide open after decades of being sealed off, first by the nationalist economic policies of Saddam Hussein, then by asphyxiating United Nations sanctions.

Note that this article was written by Naomi Klein, who elaborated on this notion as disaster capitalism. In the context of the Iraq war, the idea of these writings was that post-war Iraq would be recreated as a completely free-market economy, ripe for U.S. investment.
posted by thermonuclear.jive.turkey at 7:18 PM on September 15, 2009 [1 favorite]


If I were to do a rought translation? "We're not saying that Iraq war was launched by the CEO of Exxon getting GWB on the horn and demaning he invade. No, it was true what the adminstration said, that the goal of the invasion was to remove Saddam and replace him with a government more friendly to the west. But the whole reason that you care about whether the government of Iraq is friendly or not is the oil. By doing invading, we would be able to access Iraq's oil, hand it over to interests more beneficial to us, and the war as a whole would serve as a warning that we were willing to invade to secure resources in this fashion, and might to so again."

How did invading Iraq "restructure" the conditions necessary for "expanded profitability"?

Iraq under Saddam was a one-party socialist state-run system. Private enterprise certinly existed, but the important stuff was ---e.g., the oil --- was owned and operated by the state, with the sales profits used as the government saw fit. Overthrow Saddam, you need someone new to take over the running of the oil company. The new government would have that power, but they would be likely to contract with outside companies to do much of the actual work ---- the decade+ of sanctions meant the Iraq's oil industry lagged behind the outside world, technically, and much of its territory had never been fully explored (esp. with modern methods that might find more oil.) Any existing contracts under the Saddam government (e.g., with the French and the Russians) would be obviated. A new government would likely be grateful to the greater power which had installed it....

Who's making the profit?

Th new Iraqi government and the companies with which it chooses to contract.

How does such a theory take into account the blowback from the invasion, such as the world getting pissed of at the percieved imperialistic aggression of America?

It doesn't, really. The world being pissed off damages us in other ways but it doesn't affect oil much.

Given that this was written 2005, has anything changed/been validated/disproved since then (oil contracts etc.)?

A combined British-Chinese bid just got a chunk. Otherwise at the mo they're still arguing --- the oil cos want to own a portion of the production, the new iraqi government wants to pay them a fee per barrell.


The real problem with this article is that it ignores the fungibility of oil. You know who the US's biggest oil supplier is? Canada. 2? Venezuela. 3? Mexico. Saudi Arabia is number 4. Yet when people speak of getting us off foreign oil, they're not talking about Canada. If Saudia Arabia decided to stop selling us oil tomorrow, we'd probably find a way to muddle through by Thursday, so long as they were still selling oil to somebody, somewhere. Because the price is based on fluctuations in global supply. Or in other words, Iraq could give the oil contract to any damn company it pleased --- if the net effect was to increase the amount of oil on he market, the price of oil for everybody, including the US, would fall.

For a long time the Middle East played an outsize role in these debates because it had the slack, the ability to ramp up production or cut it off and affect the price. Now there's a lot less slack --- but the Middle East is still about the only place where they think production will be increasing over the next decade, while many other countries will see exports decline. So it will still have the power. Whoever ends up governing Iraq and developing its feilds.
posted by Diablevert at 8:08 PM on September 15, 2009 [1 favorite]


While it is a conspiracy theory that the entire point of the invasion of Iraq was oil, it is no small coincidence that a major war was fought in an oil producing region with players in the US administration having stakes in the oil industry. The first Gulf War was a definite result of oil. Iraq invaded Kuwait due to oil conflicts. That is a fact. The two wars are related with many of the same cast of characters.
posted by JJ86 at 8:52 PM on September 15, 2009


You could look at it another way: oil isn't the issue at all. As others have said, the US gets the vast majority of its oil from North America. If the mideast shut everything down, we would dive head first into some kind of economic nightmare. But the Bushes and Palins and the rest of the oil folks would be sitting pretty. Their commodity just became wayyyyy more valuable. If they are truly evil and wishing to engage in conspiracy, I can't think of a better way to do it than eliminating the competition. That's a conspiracy I can believe in. But the idea that they are going to invade countries in order to manufacture more of a product they are trying to sell just doesn't wash.

Oil is related, but not directly causitive, of the region's instability. If you discount the fact that it is a region that people have been fighting about for all of history, you are left with the blindingly, sickeningly unfair distribution of the oil wealth. I can't cite it, but I think if you look at history, any nation that has a wealth of natural resources but keeps the profit from that wealth from its citizens is a nation that will be unstable. The democratic or socialist nations with oil wealth don't have these problems. In this case, those leaders have the convenient scapegoat in the Big Bad USA. They have convinced enough of the citizens they have marginalized that the reason they are so lacking in money and hope is because the US is doing it.
posted by gjc at 9:34 PM on September 15, 2009


I think some of the others here are overestimating the oil factor, and underplaying the delusional ideology of the neoconservatives to make the world 'safe' for America by creating a 'global democratic revolution'. There was a letter circulated among military/political decision makers within Iraq in 2003, and among neoconservative intellectuals. It was about the role of Islam in post-war Iraq, and the fact that Islam should not play a part in the governing process. From the letter it is pretty clear that while oil was a minor factor, the major factor was installing the first of many democratic regimes within the Middle East, by force if necessary (interestingly enough, the term 'Middle East' is also an anglo-american term for a strategic military area of operations). The letter states:
The Middle East is a region of great strategic interest to the U.S. The security of Israel is a core commitment of the U.S. and access to Middle East energy resources is a vital strategic interest. Yet the region is highly unstable and successive attempts at intervention by past American administrations have come to nothing. Our friends in Israel tell us that the Palestianian intifada is exacting an insupportable economic and human burden. Our friends in Saudi Arabia tell us that they are sitting on a fundamentalist powder keg. The status quo is not an option. Imaginative new approaches are need. The unelected governments comprising the Arab League must be persuaded to reform, to embrace democratic pluralism. Change is essential -- by persuasion if possible, by force if necessary. The second step will be a reinvigoration of the peace process.
posted by ollyollyoxenfree at 10:31 PM on September 15, 2009 [1 favorite]


If you like super-wonky white papers, read: “If the U.S. transportation sector did not use oil, how much would the U.S. federal government reduce its military commitment in the Persian Gulf?” [pdf] and / or some of the Mefi discussion related to it here.
posted by salvia at 11:19 PM on September 15, 2009


As regards to the original question, these quotes from the article seem to sum it up quite well:

The invasion of Iraq was about Chevron and Texaco, but it was also about Bechtel, Kellogg, Brown and Root, Chase Manhattan, Enron, Global Crossing, BCCI and DynCorp.... At the heart of neo-liberalism’s strategy was an assault on the state-centred development of postcolonial nations: markets were to be forced open, capital and financial flows freed up, state properties sold at knockdown prices, and assets devalued and transferred in crises of neo-liberalism’s own making... It is only as part of this neo-liberal firmament, in which a dominant capitalist core has begun to find it harder and harder to benefit from ‘consensual’ market expansion or corporate mergers and asset transfers, that the preference for the military option makes sense.

The thesis here being that it is not only about the oil, but about asserting our eceonomic system and our corporate interests into all corners of the world, whether they like it or not.

If we wanted their oil, all we had to do was start buying it.

This is simply not true. The "embargo" you mention was in the other direction, Saddam refusing to export oil to the United States. This was an on-again, off-again kind of thing, as you can read one instance of here. However, at other times we were buying large quantities of the oil being exported from Iraq, even weeks before the invasion. I am not aware of any time at which we refused to import oil from the Iraqi regime under an embargo. Please do correct me here if I am mistaken.

One important thing to keep in mind here is that while Diablevert's numbers are correct as far as current production goes, Iraq has the 2nd largest proven oil supplies in the world, behind only Saudi Arabia. The cost of extraction in the Middle East is also much less than that in Canada, Russia, or Venezuela, as you are getting light, sweet crude that is closer to the surface and easier to refine, easily costing less than half the price in extraction. When it comes to oil, Iraq really is the last frontier, and there is huge money to made there as modern production comes in to full effect.
posted by sophist at 12:40 AM on September 16, 2009


One important thing to keep in mind here is that while Diablevert's numbers are correct as far as current production goes, Iraq has the 2nd largest proven oil supplies in the world, behind only Saudi Arabia. The cost of extraction in the Middle East is also much less than that in Canada, Russia, or Venezuela, as you are getting light, sweet crude that is closer to the surface and easier to refine, easily costing less than half the price in extraction. When it comes to oil, Iraq really is the last frontier, and there is huge money to made there as modern production comes in to full effect.

True dat. But that's so whoever was in power, so long as the oil was being produced. Saddam might not have been willing to sell to us, but so long as he was selling to someone, we would have been affected to about the same degree by the production of Iraq. I.e., if Iraqi oil floods the market, the price drops, even though we're mostly buying the actual stuff from countries in the Western hemisphere. Certainly, the war benefits all the oil companies who've now got another chance to get at the oil, and potentially benefits their bottom line directly; inasmuch as modern production methods might result in more oil being extracted more quickly than otherwise, that's probably beneficial to the world, the US included. But I think the FUBAR'd bidding process for the oil concessions so far --- the invasion was 6.5 years ago at this point, and nobody's really gotten paid yet --- argues against the idea that the whole point was to goose Exxon's quarterlies.

The LRB article seems to be arguing that the whole point of the war was to destroy a successful socialist system. That I don't quite buy; or at least, I can see an argument for saying that was an intended effect of the war, but that doesn't make it the motive. Shooting your co-worker would stop him from getting that promotion instead of you, and you might very much be in favor of that; however, the fact that you caught him in bed with your wife was probably looming larger in you mind at the time. Personally speaking, I think Cheney was a paranoid fucker who fully expected to find WMDs under every other rock once we got the damn UN out of the way and were allowed to do some real digging. I think there's always a tendancy, when you yourself don't buy someone's argument, to believe they don't either, really, and are just using it to cover up their true reasons. "That's stupid, and I know you're not stupid, so you must be lying." For some reason people have a much easier time believing in malice than either difference or stupidity.
posted by Diablevert at 10:27 AM on September 16, 2009


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