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New
Delhi, 01
February 2004
Most
of us may think the first two wars of the 21st century ––
in Afghanistan and Iraq ––
were triggered by the terrorist attack in USA on 11 Sep and the
alleged possession of WMDs by Iraq. But a deeper examination reveals
that these obvious reasons were more of an excuse; the real cause
was the American desire for unfettered control over the Middle East
oil. Iraq's 112 billion barrels of proven oil reserves, for
example, are the world's second-largest, exceeded only by Saudi
Arabia's 261 billion barrels.
Conservatively
valued at $25 per barrel, Iraq's oil reserves would be worth $2.8
trillion, or nearly $120,000 per person. US proven oil reserves, by
way of comparison, total 22 billion barrels, less than one-fifth of
Iraq's. Iraq also has 110 trillion cubic feet of proven natural gas
reserves, whose worth is estimated to be another trillion dollars,
or more than $40,000 per capita. Despite a revolution in
oil-exploration methods that occurred during the last two decades of
20th century, Iraq, for reasons known to Saddam, still
remains about 90 percent unexplored. Iraq's vast Western Desert
region, for example, possibly contains as much as 100 billion
barrels of oil in deep formations.
With
relations between Saudi Arabia and USA on down-slide, especially
after 9/11, and Iran continuing to be pronouncedly anti-American
–– Iraq became the only place for the USA to wrest strategic
control over Middle East oil. WMD were used as a provocation though
the US decision makers were well aware of their nonexistence and
they are now slowly admitting it, David Kay and Lord Hutton
notwithstanding. Saddam, his Baathist officials and their supporters
in Iraq knew this truth. And that is the reason why their
(insurgents to the Americans) actions now are more in by way of
sabotage and damage to oil pipelines and installations.
Another
reason that egged the US to remove Saddam were his intentions to
invite French and Russians oil companies to modernise and improve
oil exploration and production, after the UN sanctions were lifted.
This is borne out by developments in Russia where president Putin
lost no time in putting behind bars the oil tycoon Khodorkovsky as
soon as he got scent of the latter’s likelihood of making a deal
with ExxonMobil thereby passing control over major Russian oil
resource to Americans, but causing much annoyance to the US
administration. Only the other day Collin Powel diplomatically
expressed this during his visit to Moscow. But US policy makers know
that Russia under Putin will be prepared to spite its nose to
safeguard a strategic commodity like oil, which is the biggest
foreign exchange earner.
All
this and more has been succinctly elaborated by Youssef
M Ibrahim, former Middle East bureau chief for the New York Times
and energy editor of the Wall Street Journal in an article for The
Daily Star. He is also the managing director of the Dubai-based
Strategic Energy Investment Group, which assesses political risk in
the Gulf and Middle East.
His
views are reproduced below for the benefit of our readers:
“Oil and politics make
an intoxicating cocktail addictive, but with deadly consequences. It
has always been so. Just look at the events of the past three
decades –– the rise of OPEC in the early 1970s and its
spectacular initial success in setting global oil prices; the 1973
Arab oil embargo that shook Western economies to the core; last
year’s US-led invasion of Iraq, a country that happens to possess
the world’s second-largest oil reserves, after Saudi Arabia. Not
to mention the oft repeated call by neoconservatives in America to
“occupy” Arab oil countries.
Just a few weeks ago
Russian oil tycoon Mikhail B. Khodorkovsky, head of the Yukos energy
firm, was arrested when he “defied” a Kremlin directive by
trying to sell a major stake of his firm to ExxonMobil.
To understand the meaning
of the Kremlin’s move against Yukos, it is important to appreciate
that ExxonMobil is one of the world’s two largest corporations,
along with General Electric, and the biggest of all oil companies.
It is therefore a major player in American politics. The bottom line
in all these episodes is the same: Oil is the one strategic
commodity of the world that governments, from superpowers to minor
states, will never allow to be free of political control.
To be sure, there are
still some naive people out there who think the invasion of Iraq had
nothing to do with oil. It was all, they maintain, about weapons of
mass destruction, which have yet to be found and about building
democracy. The US is progressively abandoning this project in its
effort to get out of Iraq by June, the deadline officially announced
by US President George W. Bush. To such people one can only say
dream on.
Just before the invasion,
neoconservative spokespersons, including Paul Wolfowitz and Richard
Perle, were openly saying that one of its benefits would be to turn
Iraq into a private US gasoline-pumping station, lowering oil prices
and assuring America a substitute to an increasingly recalcitrant
Saudi Arabia. The occupation of Iraq, have no doubt, was about oil.
Russia’s move against
Khodorkovsky was similarly about the control of the country’s oil,
and US attempts to bring about “regime changes” in places like
Iran, as well as Washington’s toleration of vulgar dictators in
various other oil producing countries, such as former President
Suharto in Indonesia and Moammar Gadhafi in Libya, are all about
you guessed it –– oil. Why else would the US preach democracy in
Latin America yet be gentle with Venezuela and Mexico, which are
corrupt regimes, corrupt with oil, and similarly attempt to resume
ties with Libya, which by any yardstick, is not a democracy, yet is
also a major oil producer?
The neocons have been
saying for years that the US was losing its 70-year-old hegemony
over the Gulf’s oil. First it was through the nationalization of
oil by its producers (OPEC), then because of the 1979 Iranian
revolution which replaced America’s favorite Gulf ally, the late
Shah Reza Pahlavi, with Ayatollah Khomeini, and finally because
Saddam Hussain attempted to invade Kuwait in 1990 and then started
inviting China, France and Russia to come in and explore for oil in
Iraq. Saddam actually gave them contracts that would be activated
the moment UN sanctions were to be lifted.
A similarly dramatic
struggle for the control of oil is going on in Russia. President
Vladimir Putin, a former KGB boss who takes no prisoners when it
comes to national interests, moved swiftly to arrest Khodorkovsky
after warning him not to play politics with Russia’s oil without
checking with the Kremlin. When the defiant Russian tycoon, who
thought he would be protected by making a deal with ExxonMobil,
challenged Putin, he found himself behind bars facing charges of tax
evasion, bribery and theft.
The most likely outcome
here is that America will not lift a finger to protect Khodorovsky
because Putin has made it clear to Washington that this is a red
line, where the Kremlin differentiates between free capitalism and
business on the one hand, and “strategic interests” on the
other. The message is clear. Putin will ensure Mother Russia has
control over its own oil production. Oil earns Russia its largest
share of foreign currency and gives it power. It is important also
to notice how much support the Russian leader enjoyed at home over
the Khodorkovsky issue. If he expropriates the Khodorkovsky stake of
about 40 percent this would make the Russian government a major
shareholder in Yukos.
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