[Marxism] Another short summary of the basic motives for occupying Iraq
andromeda246 at hetnet.nl
Tue Aug 3 11:55:14 MDT 2004
John Chapman writes in the Guardian:
"There were only two credible reasons for invading Iraq: control over oil
and preservation of the dollar as the world's reserve currency. (...) Saddam
controlled a country at the centre of the Gulf, a region with a quarter of
world oil production in 2003, and containing more than 60% of the world's
known reserves. With 115bn barrels of oil reserves, and perhaps as much
again in the 90% of the country not yet explored, Iraq has capacity second
only to Saudi Arabia.
The US, in contrast, is the world's largest net importer of oil. Last year
the US Department of Energy forecast that imports will cover 70% of domestic
demand by 2025.
By invading Iraq, Bush has taken over the Iraqi oil fields, and persuaded
the UN to lift production limits imposed after the Kuwait war. Production
[currently at about 2.5m barrels - JB] may rise to 3m barrels a day by year
end, about double 2002 levels.
More oil should bring down Opec-led prices, and if Iraqi oil production rose
to 6m barrels a day, Bush could even attack the Opec oil-pricing cartel
[=Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi
Arabia, United Arab Emirates, and Venezuela].
Control over Iraqi oil should improve security of supplies to the US, and
possibly the UK, with the development and exploration contracts between
Saddam and China, France, India, Indonesia and Russia being set aside in
favour of US and possibly British companies.
And a US military presence in Iraq is an insurance policy against any
extremists in Iran and Saudi Arabia. Overseeing Iraqi oil supplies, and
maybe soon supplies from other Gulf countries, would enable the US to use
oil as power. In 1990, the then oil man, Dick Cheney, wrote that: "Whoever
controls the flow of Persian Gulf oil has a stranglehold not only on our
economy but also on the other countries of the world as well."
In the 70s, the US agreed with Saudi Arabia that Opec oil should be traded
in dollars. American governments have since been able to print dollars to
cover huge trading deficits, with the further benefit of those dollars being
placed in the US money markets. In return, the US allowed the Opec countries
to operate a production and pricing cartel.
Over the past 15 years, the overall US deficit with the rest of the world
has risen to $2,700bn - an abuse of its privileged currency position.
Although about 80% of foreign exchange and half of world trade is in
dollars, the euro provides a realistic alternative. Euro countries also have
a bigger share of world trade, and of trade with Opec countries, than the
In 1999, Iran mooted pricing its oil in euros, and in late 2000 Saddam made
the switch for Iraqi oil. In early 2002 Bush placed Iran and Iraq in the
axis of evil. If the other Opec countries had followed Saddam's move to
euros, the consequences for Bush could have been huge. Worldwide switches
out of the dollar, on top of the already huge deficit, would have led to a
plummeting dollar, a runaway from US markets and dramatic upheavals in the
February 10, 2004: OPEC lowers its production quota from 24.5 million
barrels per day to 23.5 million barrels per day, effective April 1, 2004.
May 2004: NY oil price spikes at about $39.70 a barrel
June 3, 2004: OPEC formalises an increase in its production quota to 25.5
million barrels per day effective July 1, 2004, and to 26 million barrels
per day effective August 1, 2004.
July 2004: NY benchmark light sweet crude oil contract for delivery in
August goes over $40 a barrel.
and so on and so forth.
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