The United States Went to War with Iraq to Gain Control of the Oil Industry - Case Study Example

US IRAQ WAR Bounding the Global War on Terrorism The Global war on terrorism began as a fight against the organization that perpetrated the heinous attacks of September 11, 2001, but soon became a much more ambitious enterprise, encompassing, an invasion and occupation of Iraq. As part of the war on terrorism, the United States has committed not only to ridding the world of terrorism as a means of violence but also to transforming Iraq into a prosperous democratic beacon for the rest of the autocratically ruled and economically stagnant Middle East to follow. After September 11, 2001, attacks on the United States, the U.S. Government declared a global war on terrorism (GWOT)1. Oil in Iraq The four big firms located in the US and the UK have been enthusiastic to get back into Iraq. From the time of foray and occupation of Iraq, in 2003, much has altered. In the new set-up, with the show being run by the Washington, "friendly" companies anticipate to achieve most of the productive oil deals that will result in hundreds of billions of dollars worth profits in the decades to come. The 2005 Iraqi constitution ensures a major participation of foreign companies. Iraq's future about politics is very much instable but oil remains the central feature of the political backdrop. In Addicted to Oil, while 2003 invasion of Iraq is explicable in terms of a number of oil related factors it was a one-off bid to plunder Iraq’s natural resources. "By 2010 we will need [a further] 50 million barrels a day. The Middle East, with two-thirds of the oil and the lowest cost, is still where the prize lies." - 2 Oil and War Oil and War in Iraq have been inextricably intertwined. Here is a statement from the The Age of Turbulence, "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil3. The Iraqi Ministry of Oil estimated in the mid-1990s that Iraq could produce six million barrels per day within seven years of ending the UN embargo, with $30 billion in foreign investment. In Iraq & International Oil System, Stephen adds significantly to the literature on both the international oil system and the Gulf War. Instead of making Iraq an open economy fueled by a booming oil sector, the war has failed to improve the flow of oil from Iraq's giant well-mapped reservoirs, which oil experts say could competitor Saudi Arabia's and generate 6 million barrels a day, if not more. In Blood & Oil Joanne quoted that It is one of the extraordinary paradoxes of this past century that oil, a resource that exists only in limited quantity, should be one of the major ingredients to fuel the global economy. In Blind Into Baghdad4, Fallows examines how the war in Iraq undercut the larger "war on terror" and why Iraq still had no army two years after the invasion. In Iraq, logic of withdrawl Anthony Arnove quoted that even three years after the start of the war in Iraq, violence and misery continue to plague the country, and conservatives and liberals alike are struggling5 A Background on the Iraq Crisis 1990s sanctions prevented major energy conglomerates from exploiting Iraq’s 115 billion barrels of proven petroleum reserves – second only to those of Saudi Arabia – despite the willingness of the Iraqi regime after mid-1991 to relax its control of the rigidly nationalized oil industry. Since no geological survey has been conducted in Iraq since the 1970s, experts believe that the proven reserves underestimate the country’s actual oil wealth, which could be as large as 250 billion barrels. Three decades of political instability and war have kept Iraq from developing of its 70 proven oilfields6. Eight of these untapped reservoirs could harbor more than a billion barrels each of “easy oil” which is close to the surface and inexpensive to extract. Sanctions and US law barred American firms completely from exploring Iraqi fields. Paris-based companies negotiated an agreement to develop the 18 billion-barrel Majnoon field, as well as the smaller Nahr bin Umar field, while a Russian consortium inked a deal to develop the West Qurna field, containing an estimated 15 billion barrels. In June 2001, France and Russia proposed removing restrictions on foreign investment in the Iraqi oil industry. In September 2002 Iraq was pumping at less than half its capacity. In The International Struggle David Malone7states that Iraq has dominated headlines in the recent few years; however, its controversial role in international affairs goes back much further. Current Situation Energy is an extremely high stake game. In Crude Awakenings Mr. Yetiv argues that High oil prices are becoming one of the big stories of the year, threatening to harm the global economic recovery, not to mention your pocketbook. They are so big that the outcome ultimately determines the course of history. It is believed that the oil prices are not higher than they were in 1981. In the meantime the real oil prices have not gone up. People are simply not crux of the problem. They are not accustomed to it8. Had oil been more expensive in the past, true to its market potential, people would not have been complaining today. Crude markets have been moving with the market movements. Gold and oil are going up together. This is a natural phenomenon. Increasing output would also not help the market. OPEC can not be inclined to increase output further until it is ensured it would be compensated for any idle capacity. Conclusion The progression of the oil industry in Iraq is definite to play a major role in leading towards or determining its future as a country on the whole9. However, the oil industry can only be promoted if the security concerns and the instability throughout the country can be resolved in a peaceful long-lasting manner. The protracted clashes since the start have restricted the possibility of any meaningful change. Even if security, a major hindrance, is restored, the oil industry has many more obstacles before it can resume its journey and movement towards normalcy. One of the foremost tasks ahead will be how to analyze and asses in a evocative and pragmatic manner the many ideas that have been moved on by Iraqi oil experts on how to restructure the country’s oil, its major resource, and admin and how to describe the terms of signs for the new oil policy, as well as the roles to be played by the INOC, the Iraqi private sector and IOCs10. There are severe suspicions that if this is done in the currently prevailing environment of political uncertainty, there will be neither ample study of all the possible possibilities nor the necessary authority and intelligibility. Even though there are many voices calling for the oil sector to be opened to international oil firms, it is going to take a good deal of arguments and directness to induce a greater part of public belief that the gradual privatization of the oil industry is for the good of the people and neither a war prize nor a way for carpet-baggers to get rich quickly11.  Bibliography Alhajji, A.F., 'The US Energy Policy & Invasion of Iraq: Does Oil Matter?', April 2003 Addicted to Oil: America's Relentless Drive for Energy Security.London I.B.Tauris, 2005. Crude Awakenings: Global Oil Security and American Foreign Policy. Ithaca, NY:, 2004. Clark, William R. Petrodollar Warfare: Oil, Iraq and the Future of the Dollar Chris J. Dolan, In War We Trust: The Bush Doctrine and the Pursuit of Just War Daniel Byman, “Scoring the War on Terrorism,” The National Interest,Summer 2003 David M. Malone, The International Struggle over Iraq: Politics in the UN Security Council 1980-2005. Oxford and New York: Oxford University Press, 2006 David M. Malone, The International Struggle over Iraq: Politics in the UN Security Council 1980-2005. Oxford and New York: Oxford University Press, 2006 Duffield, John S., 'Oil and the Iraq War: How the United States Could Have Expected to Benefit, and Might Still', Middle East Review of International Affairs, June 2005 Engdahl, William. A Century of War: Anglo-American Oil Politics & New World Order. Global Conflict. New York: Dreaming War: Blood for Oil and the Cheney-Bush Junta James Fallows, Blind into Baghdad: America’s War in Iraq. New York: Vintage, 2006 Klare, Michael T. Blood and Oil: The Dangers and Consequences of America's Growing Dependency on Imported Petroleum, London: Pluto Press, 2007. Michael T. For Oil and Empire? Rethinking War with Iraq. Petrodollar Warfare Oil, Iraq and the Future of the Dollar William R. Clark. Richard Falk, The Great Terror War, New York: Olive Branch Press, 2003 Stephen Pelletière, Iraq and the International Oil System: Why America Went to War in the Gulf. Greenwood, 2001. Maisonneuve Press, 2004 The Age of Turbulence, memoir of former Federal Reserve chief Alan Greenspan Anonymous (Jan 10 2007). International Responsibilities Task Force. Available on: http://www.pitt.edu/~ttwiss/irtf/iraq.html Accessed on: 28th May 2008 Read More