This article has been reproduced from the <\/strong>Socialist Standard<\/strong><\/em> (November 2002<\/a>), the monthly journal of The Socialist Party of Great Britain. <\/strong><\/p>\n\n\n\n As the Bush administration continues to beat the war drums, mustering \nsupport for its attack upon Iraq, there are those who still maintain \nthat the US-UK position on Iraq has nothing at all do with oil and that \nBush and Blair are quite sincerely concerned about peace and democracy \nand ridding the world of a regime that threatens global harmony with its\n weapons of mass destruction. The evidence, however, suggests that \nWestern concerns with Iraq are far less to do with its alleged threat to\n world peace and everything to do with control of the region’s oil \nsupplies.\n<\/p>\n\n\n\n In a leading article in the Washington Post on 15 September, staff \nwriters Dan Morgan and David Ottaway wrote extensively about Western oil\n interests in Iraq, observing that whilst senior Bush administration \nofficials say they have not begun to focus on the issues involving oil \nand Iraq, \u201cAmerican and foreign oil companies have already begun \nmanoeuvring for a stake in the country’s huge proven reserves of 112 \nbillion barrels of crude oil, the largest in the world outside Saudi \nArabia.\u201d<\/p>\n\n\n\n An Observer investigation, published on 6 October, began: \u201cOil is \nemerging as the key factor in US attempts to secure the support of \nRussia and France for military action against Iraq . . . The Bush \nadministration, intimately entwined with the global oil industry, is \nkeen to pounce on Iraq’s massive untapped reserves, the second biggest \nin the world after Saudi Arabia’s.\u201d<\/p>\n\n\n\n However revealing this may appear, more damning evidence of US \nintentions in the Middle East actually emerged some time ago. In April \n2001, some five months before \u201cSeptember 11th\u201d, a little heard of report\n was submitted to vice-president Dick Cheney, originally commissioned by\n James Baker who had been the US Secretary of State under George Bush \nSenior. It is entitled Strategic Energy Policy Challenges For The 21st \nCentury and describes how the US is confronting the biggest energy \ncrisis in its history. The report specifically targets Saddam as an \nobstacle to US interests because of his control of Iraqi oilfields and \nsuggests the use of \u201cmilitary intervention\u201d as a way to access and \ncontrol Iraqi oilfields and help the US out of its energy crisis. <\/p>\n\n\n\n One passage reads: <\/p>\n\n\n\n \u201cIraq remains a destabilising influence to . . . the flow of oil to \ninternational markets from the Middle East. Saddam Hussein has also \ndemonstrated a willingness to threaten to use the oil weapon and to use \nhis own export programme to manipulate oil markets . . . This would \ndisplay his personal power, enhance his image as a pan-Arab leader . . .\n and pressure others for a lifting of economic sanctions against his \nregime. The United States should conduct an immediate policy review \ntoward Iraq including military, energy, economic and \npolitical\/diplomatic assessments. The United States should then develop \nan integrated strategy with key allies in Europe and Asia, and with key \ncountries in the Middle East, to restate goals with respect to Iraqi \npolicy and to restore a cohesive coalition of key allies.\u201d<\/p>\n\n\n\n According to the report’s compilers, the main cause of any coming \ncrisis will be \u201cMiddle East tension\u201d, which means the \u201cchances are \ngreater than at any point in the last two decades of an oil supply \ndisruption\u201d. It admits that the US will never be \u201cenergy independent\u201d \nand is becoming too dependent on foreign powers supplying it with oil \nand gas. The answer is to put oil at the centre of the administration \u2013 \n\u201ca reassessment of the role of energy in American foreign policy\u201d.<\/p>\n\n\n\n The report initially contemplates an arms-control programme in Iraq \nand suggests this may lead to a relaxation of oil sanctions which might \nmake for better trading on world oil markets. However, it then \nacknowledges that such an arms-control policy would prove over-costly as\n it would \u201cencourage Saddam Hussein to boast of his ‘victory’ against \nthe United States, fuel his ambition and potentially strengthen his \nregime\u201d. It continues: \u201cOnce so encouraged, and if his access to oil \nrevenues was to be increased by adjustments in oil sanctions, Saddam \nHussein could be a greater security threat to US allies in the region . .\n .\u201d <\/p>\n\n\n\n With US oil reserves estimated to last no more than 20 years and the \nwith the US the biggest consumer and the biggest net importer of oil (11\n million barrels a day, which is a seventh of global production), there \nis a growing reliance on Middle Eastern oil. Twenty years ago the US \nimported just over 30 percent of its oil from the Middle East. That \nfigure now stands at 52 percent. And in a world where the US has \neconomic rivals, with their own growing demand for oil (i.e. China’s \ndemands are increasing by 3.5 percent per year), a war to secure control\n of the \u201cgreatest prize\u201d makes sound sense to the Bush administration. <\/p>\n\n\n\n Additionally, in the post 9\/11 world, where anti-American feeling \nruns high in traditional militant Islamic societies, the US also \nrealises it can no longer remain dependent on Saudi oil supplies. As the\n US needs an oil supply totalling 20 million barrels of crude oil a day,\n it now seeks a supplier that can perhaps meet half of these needs \u2013 \nIraq! With the present high global prices of oil sucking the US into a \nrecession it is important also that the US breaks the Saudi stranglehold\n on the oil cartel Opec.<\/p>\n\n\n\n And what of the Bush administration and its own personal oil \ninterests? Well make no mistake about it, the president, the \nvice-president, the defence secretary and the deputy defence secretary, \nthe chairman of the NSC and the head of the CIA all have oil \nconnections. The most hawkish US regime ever assembled has its own \nprivate reason for a war with Iraq.<\/p>\n\n\n\n Four years ago, Halliburton, the US oil equipment company of which \nDick Cheney was chief executive, sold parts to Iraq to help with the \nrebuilding of an infrastructure that had been devastated during the 1991\n Gulf war. Halliburton did \u00a315 million of business with Saddam \u2013 a man \nCheney now compares to Adolf Hitler. Moreover, Halliburton is one of the\n US companies thought by experts to be queuing up for the profits \nresulting from any clean-up operation in the wake of another US-led \nattack on Iraq. <\/p>\n\n\n\n In the past few years, and increasingly since Bush came to power and \nmost evidently since 9\/11, the US has spread its military tentacles \u2013 \nestablishing bases in twelve new countries in the past year alone. US \nforces now surround over 80 percent of the world’s oil reserves. They \nhave encompassed the Caspian region which has an estimated 70-200 \nbillion barrels of oil and 11 trillion cubic feet of known gas deposits.\n And still with gas, Iran, neighbouring Iraq, and part of Bush’s dreaded\n \u201cAxis of Evil\u201d controls 80 percent of the world’s gas reserves. And \nwith gas estimated to account for 30 percent of world energy production \nby 2020, the US game plan becomes increasingly difficult to dismiss as \nnonsense.<\/p>\n\n\n\n Moreover, the five permanent members of the UN Security Council \u2013 the\n US, Britain, France, Russia and China \u2013 have international oil \ncompanies with major stakes for and against a \u201cregime change\u201d in \nBaghdad. And since the Gulf War of 1991, companies from more than a \ndozen nations, inclusive of France, Russia, China, India, Italy, Vietnam\n and Algeria, have either negotiated contracts or sought to reach \nagreements in principle to develop Iraqi oil fields, to revamp extant \nfacilities there or explore undeveloped fields. Most of the deals, \nhowever, are in abeyance until the lifting of U.N. sanctions.<\/p>\n\n\n\n Sources in Russia have expressed serious concerns about a US attack \non Iraq and any \u201cregime change\u201d this may result in, fearing that a \npost-Saddam, pro-US, government might just not honour the extraction \ncontracts that Baghdad has already signed with Moscow and that all such \ncontracts would be declared null and void. Many in Russia now fear that \nthe US has already brokered deals with the Iraq opposition and despite \nrecent dialogue between Moscow and Washington remain unconvinced of \nWashington’s claim that Russian contracts would be respected. <\/p>\n\n\n\n One Russian UN Official reportedly told the Observer (6 October): \n\u201cThe concern of my government is that concessions agreed between Baghdad\n and numerous enterprises will be reneged upon, and that US companies \nwill enter to take the greatest share of those existing contracts.\u201d<\/p>\n\n\n\n Such fears are perhaps not unfounded. Ahmed Chalabi, leader of the \nIraqi National Congress (an umbrella organisation of Iraqi opposition \ngroups backed by the US), recently announced that he preferred the \ncreation of a US-led consortium to develop Iraq’s oil fields, which have\n deteriorated in the ten years of UN sanctions, saying \u201cAmerican \ncompanies will have a big shot at Iraqi oil\u201d (Washington Post).<\/p>\n\n\n\n Back in 1997, Russia’s biggest oil company, Lukoil, signed a $20bn \ncontract to tap into the West Qurna oilfield. In October of last year, \nthe Russian oil services company Slavneft purportedly signed a $52 \nmillion service contract to drill at the Tuba field, also in southern \nIraq. A proposed $40bn Iraqi-Russian economic agreement also reportedly \nincludes opportunities for Russian companies to explore for oil in \nIraq’s western desert.<\/p>\n\n\n\n French company Total Fina Elf had negotiated for rights to develop \nthe huge Majnoon field, near the Iranian border, which could contain up \nto 30 billion barrels of oil. But in July 2001, Iraq announced it would \ncease giving French firms preference in the award of such contracts \nbecause of its decision to abide by UN sanctions, and then gave a $90bn \ncontract to Russian oil company Zarubezhneft to drill the bin Umar \noilfield.<\/p>\n\n\n\n During the first two days of October, at the first US-Russia \nCommercial Energy Summit in Houston, Texas, emphasis was placed on \nRussia increasing its oil exports to the US, which is desperate to \nreduce its reliance on the Middle East. Off stage, talks were in \nprogress about a series of contracts held by Russian oil companies. \nAccording to Vaget Alekperov, Lukoil chairman, in an interview with the \nFinancial Times on 3 October, the Russian government secured an \nagreement that if, or when, the Baghdad regime is toppled, \u201cthe [Iraqi] \nlaw is the law, the state is still there\u201d.<\/p>\n\n\n\n Mikhail Margelov, of the international affairs committee of the \nRussian federation council (the upper house of parliament), afterwards \ntold Reuters that Moscow expected \u201cequal, fruitful, cooperation\u201d with \nthe US \u201cespecially in the privatisation of the Iraqi oil sector\u201d.<\/p>\n\n\n\n Following the Houston summit, Russian Energy Minister Igor Yusufov \nand economy minister German Greg travelled with US commerce secretary \nDonald Evans and Energy Secretary Spenser Abraham for talks with Bush’s \nvice-president Dick Cheney and national security advisor Condoleeza \nRice, undoubtedly in order for the latter to reassure the former that a \nRussia supportive of an attack upon Iraq would indeed get its share of \nthe spoils once Saddam is ousted.<\/p>\n\n\n\n Apparently, plans to safeguard Russia’s interests in Iraq have been \nunder discussion for months in Washington. Prior to the Bush-Putin \nsummit in May, Ariel Cohen, an analyst with the Heritage Foundation \nsuggested an offer to \u201csupport the Russian companies’ contractual \nrights\u201d, arguing that Lukoil could sway Russian foreign policy, and that\n a deal could be brokered to Washington’s and Moscow’s mutual advantage.\n <\/p>\n\n\n\n Mikhail Khodorkovsky, chief of Russia’s second biggest oil company, \nYukos, later said in a Washington Post interview that \u201cif there were \nsufficient political will\u201d, one possibility was to create a \nRussian-American oil consortium to exploit Iraqi oil resources<\/p>\n\n\n\n Clearly, like the capitalist state it has always been, Russia wants \nto make sure that, whatsoever deals the US agrees upon with anti-Saddam \nIraqi politicians or Kurdish nationalists, their existing contracts \nremain valid. And this, more than the repayment of Iraq’s $7bn \nSoviet-era debt, is the decisive factor in deciding how Russia casts its\n vote on the UN Security Council.<\/p>\n\n\n\n R. James Woolsey, former CIA director and a leading protagonist in \nthe US anti-Iraq campaign, is one of many all too aware of Russian and \nFrench qualms regarding the whole affair. Cognisant of the need to \nsecure French and Russian support he commented: \u201cIt’s pretty \nstraightforward, France and Russia have oil companies and interests in \nIraq. They should be told that if they are of assistance in moving Iraq \ntoward decent government, we’ll do the best we can to ensure that the \nnew government and American companies work closely with them.\u201d In other \nwords, scratch our backs and we’ll scratch yours.<\/p>\n\n\n\n France is listening and, like Russia, is wondering whether once \nSaddam is ousted, its companies will lose out to US oil interests. Not \nonly is it now thought to be negotiating a slice of the coming action \u2013 a\n bigger role than the US afforded it in the 1991 Gulf War \u2013 but the \nstate-owned Total Fina Elf oil company has also been in talks in the US \nabout the distribution of the spoils of war.<\/p>\n\n\n\n As Washington’s crusade against Iraq offers huge opportunities for \ninternational oil corporations, it also exposes serious risks and \nworries for the global oil market should there indeed be \u201cregime change\u201d\n in Iraq. As the Washington Post (15 September) reported: \u201cAccess to \nIraqi oil and profits will depend on the nature and intentions of a new \ngovernment. Whether Iraq remains a member of the Organization of \nPetroleum Exporting Countries, for example, or seeks an independent \nrole, free of the OPEC cartel’s quotas, will have an impact on oil \nprices and the flow of investments to competitors such as Russia, \nVenezuela and Angola.\u201d<\/p>\n\n\n\n Though having initially urged caution on the Iraq affair, it is \npossible that both Russia and France will give their blessing for a \nUS-led assault on Iraq. And who could blame them? Their governments are \nlittle more than the executives of their respective master classes and \nin the cut-throat world of capitalist competition they must be seen to \nbe promoting their profit-oriented interests, and to hell with the cost \nof life. In Washington, London Moscow, Paris, and in state capitals the \nworld over, governments will always maintain that oil takes priority \nover blood. <\/p>\n\n\n\n Back to the Politics Index<\/a><\/p>\n\n\n\n
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Russian and French interests<\/strong><\/h3>\n\n\n\n
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