“It hardly needs to be added that if Saddam does acquire the capability to deliver weapons of mass destruction ... a significant portion of the world’s supply of oil will all be put at hazard ... The only acceptable strategy is ... to undertake military action as diplomacy is clearly failing. In the long term, it means removing Saddam Hussein and his regime from power. That now needs to become the aim of American foreign policy."- 1998 letter from Donald Rumsfeld, Paul Wolfowitz and Richard Perle to then President Clinton
It seems fairly obvious from this statement in this statement published in 2001 in the Washington Times of the real objectives behind the justifications given for the Iraq war. If anything, the one statement that unified popular opinion in the different countries of the Middle East, it was that the real motive behind the war and Saddam’s eventual removal was that it was in order to control Iraq’s oil. In fact several Middle Eastern paper printed some of the most sardonic cartoons to make the point. An example of which is one that appeared in Al Akhbar (an Egyptian daily) the cartoonist Mustafa Hussein drew two Iraqi women whispering a rumour that whenever a coalition soldier feels dizzy in the desert, they make him sniff oil. This perspective strongly reverberated with that very popular slogan seen internationally in massive anti-war marches throughout the world, namely “No Blood for Oil”. Therefore, the belief that there is a connection between oil and the Iraq war has been quite widespread. Yet analysis of the relationship between the war and oil interests has been a distinctly invisible element of mainstream war coverage. If anything, the Bush administration during and after the war, were unmistakably tight-lipped about its oil interests in determining war policy and the same goes for the new Obama administration, regardless of its promise to “Pull Out” of Iraq.
Regardless, control over oil in the Middle East was one of the central goals of the Project for a New American Century (PNAC). PNAC was an American think tank based in Washington, D.C. that lasted from early 1997 to 2006, whose members exerted a great deal of influence on the Bush Administration's development of military and foreign policies, especially involving national security and of course, the Iraq War. Since its beginnings, PNAC had been agitating for control of Iraqi oil and to that end had formed the “Committee for the Liberation of Iraq”. Furthermore the letter sent to Clinton in 1998, makes it explicitly clear that Rumsfeld and his ilk believed that control over Iraqi oil should lie not in Hussein’s hands, but in those of the United States. To them, after being long frustrated with Clinton’s lack of military ambition, the 9/11 attacks were a timely geopolitical godsend for muscling into place their bellicose enterprise. The difficulty remains that even though we now have a good understanding of the imperial ambitions of the Bush administration, this paper believes we still lack a systematic analysis of why oil was a driving force behind this war. What kind of eco-liquidity[1] would have been provided to the United States in controlling Iraqi oil at that particular political conjunction?
In “Dreamworld and Catastrophe: The Passing of Mass Utopia in East and West”, Buck-Morss sets out that the end of the Cold War wasn’t marked so much by the “power of the enemy other”, but by the need to “rectify the… materialist contradictions inherent in the mass utopia dreamworld’s of both East and West.” Thus, geo-economics came to replace geopolitics, that is, as Edward Luttwak its key champion says, war by other means. So now, the new and arguably the first, truly global ideological form is consumerism in all its hyperreal, differentiated, and constantly changing forms. In propelling this latest ‘dreamworld’, the Clinton administration engaged in aggressive policies for economic restructuring that successfully furthered geo-economic interests. Conversely, as Michael Klare pointed out, when neo-liberalizing restructuring alone is cannot to push aside the obstructions to easy resource access for ensuring geo-economics goals, it is inevitable that armed conflict again becomes the order of the day. So given the requirements of today’s techno-infrastructure, it is important to maintain the eco-liquidity of that strategic commodity, oil, as it is central to capitalism’s fluidity and this has entered shaky ground in recent years. After all, geo-economics was born from the shock waves of the 1970s OPEC oil crisis. These shocks did not only changed the global oil regime but they were also intimately connected to the massive post-Bretton Woods transformation of the global financial order. As Keohane explained, access to a readily available supply of reasonably cheap oil was central in the development of the open and non-discriminatory monetary and trade system sought by the United States needed. Therefore, oil was “at the center (sic) of the redistributive system of American hegemony” and the Middle East was as Caspar Weinberger, Secretary of Defence, called in 1981 put it “the umbilical cord of the free industrialized world”. The Carter Doctrine of 1980 further states “An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force”.
Even though the international oil market has evolved considerably since the 1970s, the Middle East’s oil reserves maintains being the centre of economic gravity as the fact remains that the region still holds just over half of the global oil supply. Right now, outside this region, producers are forced to venture into less productive and more difficult localities many of which have already reached peak oil. Thus, long-term projections now show that OPEC and the Arab Gulf producers will become increasingly important. While Saudi Arabia possesses the largest reserves globally standing at 262 billion barrels or Giga barrels (Gb), Iraq’s proven reserves rank second at 113 Gb. Furthermore, the US Energy Department estimates that Iraq has as much as 220 Gb in undiscovered reserves that would bring the Iraqi total to the equivalent of 98 years of current US annual oil imports. A senior analyst at the Petroleum Finance Company in Washington, DC, has recently said in 2001 that, “the international oil industry regards Iraq as one of the ultimate prizes on offer in the world today”, and it will be the new “Klondike” of the 21st century. Of the 70-odd discovered fields where oil is easy to access, so far only 15 have been developed.
Therefore, given these realities, perhaps it’s easy to just simply chalk this war up to a particularly bellicose US administration who is simply extending its 70-year history of petropolitical intervention in the region. However, upon closer inspection of the dynamics of oil politics over the last few years it becomes apparent that a more specific and complex set of oil supply conditions has resulted in the decision to attack Iraq at this particular time. Seeing the sequence of events, coupled with the Bush administration rhetoric at the time, we could start by questioning by asking whether the 9/11 attacks had anything to do with this US ambition to reconstruct the Iraqi oil regime. It is a fact that out of the 19 suicide bombers, 15 were Saudi, and for whatever unknown reason, the Saudis were not particularly cooperative with the US administration’s investigations. Perhaps this raised the question in the US of whether Saudi Arabia, its largest supplier of oil, would in practice continue to be a reliable ally.
Is there any evidence that these political developments might actually impinge on the Saudi supply of cheap oil to the United States? Lets start by looking at all the recent developments affecting the relationship between the US and Saudi Arabia in a chronological timeline as this may further shed some light to this question. Over the last 70 years, the US and Saudi Arabia have shared an intimate relationship first established by the Roosevelt administration and the Saudi royal family. This provided privileged access to oil for the US in return for military protection for the Saudi’s. In particular, since the oil embargoes of the 1970s, the United States boosted its sales of highly sophisticated military armaments to the Saudis. After the first Gulf War, the United States further extended its network of military bases and arms provision from Saudi Arabia to include Kuwait, Bahrain and Qatar in order to secure regional oil control. Up until today, Saudi oil supply is centrally important to the United States with Aramco, the Saudi national oil company, providing some 16.8% of total crude imports to the US.
It is often said that it would be impossible for Saudi Arabia to use oil as a political weapon as that income it generates enables it (primarily sustained by oil rents) to maintain social stability through the financing of its extensive patronage and public welfare systems. Indeed, the Saudis have always maintained their side of the bargain by stepping up their production of what Jhaveri in his paper on petroimperialism called “political oil” in order to deal with turbulence in supply from events like the Venezuelan oil strikes of late 2002. He further states that, “Saudi Arabia is, after all, a “swing producer” being the only country in the world with the excess production capacity to achieve this role at any given time.” Even though this role in maintaining supply balance and prices provides them with lucrative profits, they still have to absorb considerable losses. Jhaveri further asserts that for Saudi Arabia, “retaining this power to sustain elevated prices and prevent market volatility is of uppermost importance because dependable oil profit is the basis of its stability as a domestic and regional political power.”
Even though Saudi Arabi’s market share substantially grew for a brief period after the oil shocks of the 1970s, its centrality was significantly undermined by changes in the global oil production system. Ever since the 1970s, Saudi Arabia has not been one of the primary beneficiaries of the ever increasing global demand in oil, as it was the smaller producers in OPEC along with the non-OPEC producers from the North Sea as they offered better oil extraction technology and terms. It was these producers who flooded the oil market that created the 1986 oil crash and it was then that the Gulf producers lost the market battle from which they have yet to fully recover so between 1988 and 1996, the Gulf region took up only one-third of the incremental growth demand. The irony is that these new and more expensive non-OPEC operators were only able to exist because of the elevated prices that OPEC maintained. Faced with declining revenues, Saudi Arabia has since sought to move downstream in the commodity chain to secure the growing Asian markets (in the same way the Venezuelans did in North America) but this strategy proved to be only minimally successful. What this demonstrates is that Saudi Arabia, as the key producer within OPEC, does not possess the necessary power to rig prices. In sum, the Saudi state has been struggling to uphold its revenue base for fulfilling domestic functions. Lacking the capital with which to develop new oil facilities, The Saudi government, as with the other Gulf States, have turned to private investors to develop their natural gas reserves which hold much more promise. Ultimately, what this shows is that the Saudis cannot afford to privatize oil due to its nationally strategic role in their economy.
When things financially worsened in Saudi Arabia after the first Gulf War, there were significant negative repercussions for their relationship with the United States. Saudi Arabia was left in a state of deficit after having to pay for both the war costs and further arms purchases from the US. As a way to overcome this problem, the Saudis started to diversify their network of global and regional political-economic alliances, the most notable new alliance was with its neighbor, Iran, which did not go down well in Washington.In addition to that, after the debilitating stroke of King Fahd in 1995, Crown Prince Abdullah took over as the new regent Saudi Arabia and one of the first things he did was to reduce US arms purchases and thereby reducing their reliance on its protection. Moreover, Prince Abdullah has since stood out as a new political voice in the Middle East that was openly critical of the then US sanctions against Iraq and an advocate of the Palestinian cause. He has also attempted to build a base of support for the introduction of democratic reforms in the country while reining in some of the conservative clergy, which made him is a progressive voice on many counts. After 9/11, this tension between the Saudi’s and the United States intensified. Shockwaves went through Saudi Arabia when a classified Pentagon briefing was leaked describing it as “the kernel of evil” backing Islamic terrorism. In turn, Prince Abdullah himself flew to the United States in 2003 to caution Bush that unless he reduced his support for Israel, oil sales and military cooperation could be in jeopardy.
These new strategies were a response to the growing domestic turbulence in Saudi Arabia as a result of the precarious nature of the state’s oil revenue base from the 1980s onwards. Saudi Arabia is a government that retains its legitimating power through close alliances with the Muwahhidun[2] (Wahhabists) and it is oil money that has helped consolidate these ties. They originally emerged during the era of British colonial expansion with the goal of transforming and re-moralising the community, however, they later worked hand-in-hand with the Saudi state. The Muwahhidun then came to oppose the ruling dynasty, after the 1970s down turn, calling it corrupt and self-serving, and their relationship with them became more disjunctive. The cause of this disjunctive turn requires, as Robert Vitalis emphasizes, an examination of material encounters “on the ground”. Such a study could help us understand how the persistence of a significant US military presence on Saudi soil after the end of the first Gulf war has led to deep resentment and the fuelling of Islamic fundamentalisms. In fact, this was a primary motive behind bin Laden’s declaration of a Jihad against America, and the reason why so many Saudis were among those carrying out the 9/11 attacks. Rather than pursuing a careful analysis of these disjunctive processes, the US media instead is saturated with perversely orientalist readings on how the House of Saud is breaking down because of a dysfunctional royal family, or circulates hard-line denunciations of the Saudi kingdom’s austere flavour of Islam, namely Wahhabism. Inevitably, the Saudis are speculating they may be next in line after Iraq.
In brief, it has been increasingly difficult for the Saudi government to maintain a simple relationship of allegiance with the United States due to the changes in the global oil market as well as its own domestic political instabilities. From the mid- 1990s, the response by the Saudi leadership has resulted in the emergence of a new power nexus in the region that began to limit the capacity for US regional dominance. It was clear that this was likely to lead to negative consequences for the US as Saudi Arabia was not just a major oil supplier but it continued to play a significant role as swing producer that had a substantial influence on global oil prices. When seen in this light, it was fairly obvious that the US was under pressure to determine a way of undermining the power of the Saudi government in the oil market was intensifying for at the same time, this tension was further being exacerbated by the US’ ever-voracious appetite for oil which only could only be met through further imports. This tension intensified when, after the Asian financial crisis in 1998, OPEC tried to bring prices back up by cutting production. This, however, led the United States in 2000 to turn be even heavy-handed in its attempts to pressure OPEC to increase production. It had to undergo the humiliation of lobbying OPEC in a fashion seldom seen in the 40-year history of the oil cartel. This led to a staccato of furious demands within the United States for breaking up OPEC, a few even demanded the arrest of OPEC ministers for price fixing. As a result, the United States dropped its objections to easing UN limits on the funds Iraq could use once Baghdad had agreed to release more oil. Around this time, the Council on Foreign Relations and the James Baker III Institute for Public Policy concluded from several studies that showed the growing role of Iraq as a new kind of swing producer and this posed difficulties for the US administration. When the Venezuelan oil strikes took place in December 2002, Iraq (along with several other nations) had helped compensate by increasing production by 140,000 b/d.
Looking at this tangled conjunction of anxieties Gulf oil presented to the US, the restoration of control of Iraqi oil could not come soon enough, and hence the war on Iraq. The plan was simply to privatize the Iraqi Oil Industry that would create a new oil order that harks back to the glory days of the time when oil majors ruled the trade. This would sever the enormous power of the governing elites from the profits of state oil. Furthermore, this move would counter OPEC’s centrality and eventually result in a supply of reasonably priced oil for both the United States and the global market. Iraq would become a frontier bonanza boom for the majors where oil is very cheap to extract. However, it is highly doubtful that the Iraqi people would accept the privatisation of the oil sector forced onto them even if it was part of a package of democracy and prosperity, and indeed they haven’t. Without political stability, the oil majors would not invest irrespective of their desperation for access to such a cheap source of oil and so far they haven’t managed to get in. This has caused the US to stay on far longer than it intended to in Iraq.
It may be contrary conventional interpretations, but the war did not appear to have been an imperial manoeuvre in the sense that the US government or private corporations obtained any direct immediate gains from the Iraqi oil wealth for their own aggrandizement. Yahya Sadowski pointed out that the Bush administration did not have any strong ties to the oil supermajors, of which only one is American (Exxon). While it may be true that many potentially lucrative contracts were handed out in closed-door sessions to US oil engineering and servicing companies such as Bechtel and Halliburton (in some cases even before the war began), these were not the long-term deals that the oil majors are waiting for. Michael Watts in a paper he wrote in 1994, “Oil as money: The devil’s excrement and the spectacle of black gold” that petroimperialism is one of the eight natures of oil and here we see a form of it that is true to the intentions of post-Cold War geo-economics aimed at chaos management by implementing privatization structures. The US’s rather short-sighted dreamworld continues to be fixed in the abundant oil bedrock of the Gulf region, so you could argue that they had no choice but to use such imperial strategems. Therefore, it would not be unfair to say that America was the architect of its own violent embroilment with Islamic “terrorists” caused by their ever growing need to control the petropolitical order.
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[1] By eco-liquidity, I mean the dual and fluid circulation of oil both as an asset to be interchanged with money, as well as creating physical power, that collectively furnish capitalism with its dynamic energy.
[2] The term "Wahhabi" (Wahhābīya) was first used by opponents of ibn Abdul Wahhab. It is considered derogatory by the people it is used to describe, who prefer to be called "unitarians" or Muwahiddun.