In 2001, Iraq was exporting 2.7 million barrels of oil a day through the Oil for Food program which kept the price per barrel in the $25 range. In 2005 the amount has been chopped to 1.8 million barrels. That extra million barrels per day may not seem like a lot of oil, but with no excess-capacity in the system, it has pushed the price up into the stratosphere, at times tipping the $70 per barrel mark. These prices were unimaginable before the war and are largely the result of the failed occupation strategy.
Most experts dont believe that Iraq will be able to substantially increase its exports for at least the next 2 years. This is a dramatic contrast from the neocons predictions that Iraq would be pumping 3 million barrels per day by now. That would have kept the world awash in petroleum and America shielded from the impending recession.
For the most part, the western media has kept the details of Iraqs oil industry out of the headlines. In two years of conflict I cannot recall one time when a mainstream newspaper produced an in depth story about pipeline sabotage or the inability of the administration to meet their goals for oil production. Even the photos of black smoke rising from the desert floor have been erased from Americas newspapers. The media continues to limit itself to stories about the random acts of violence that now plague the capital on a daily basis. These stories create the justification for the ongoing occupation and the continuing violence against the Iraqi people. As always, the role of the corporate media is to shape public opinion not to provide the facts.
The antiwar movement has failed to focus on the issue of oil; missing a critical opportunity to undermine support for the occupation. Its not enough to regurgitate the mantra, No blood for oil. Oil is central to the US involvement in Iraq and the vulnerabilities of that commitment should be understood and exploited.
The resistance has been fairly effective in limiting the amount of oil that leaves Iraq. According to the Institute for the Analysis of Global Security, the resistance mounted more than 200 attacks on Iraqi gas or oil pipelines and refineries since June 2003. Attacks on pipelines, particularly the Kirkuk-Ceyhan pipeline that exports oil to Turkey, cost the government about 200,000 barrels a day, US officials said.
The attacks on oil facilities and pipelines are the most successful part of the resistances strategy. They also show us the future of asymmetrical guerilla warfare. In a world where energy shortages will decide the fate of entire economies, we can expect that dissident groups will focus less attention on attacking soldiers and more on disrupting vital supplies of fuel. This may explain why the media avoids covering the issue on the news; they dont want to empower disgruntled individuals who may choose to disable the system.
The attacks on the oil installations are the predictable outcome of the invasion. The administration had every opportunity to continue buying oil through the free market system, which they praise at every opportunity. Instead, they chose to extract that same oil at gunpoint after killing more than 100,000 Iraqis. Should we feel indignant that the Iraqis are fighting back? After all, whose oil is it?
Whose Oil, Indeed?
At present, Iraqs oil proceeds are under the control of the occupation. For the most part, the revenue is entirely unsupervised. Billions of dollars are spent out of the Iraqi Development Fund without oversight or review. It may well be the biggest rip-off in history. Even by the modest estimates of the GAO (Government Accounting Office) $20 billion of the Iraqi funds have mysteriously disappeared in waste, fraud, and abuse. If we add this amount to the $18 billion that the Congress provided for reconstruction, we get an idea of the magnitude of the larceny taking place under the auspices of Iraqi liberation.
Iraqs new constitution factors in heavily with the administrations plan to control Iraqi oil. The only way to attract foreign companies for long-term investment is to create the legal framework for a permanent government that has the authority to issue contracts. The new constitution establishes the context whereby American puppets will be able to transfer Iraqi assets into the hands of the multi-national oil giants.
Still, Bush and co. have a lot of heavy-lifting ahead. The constitution is just the first step towards elections which will take place next February. The mega-corporations want to see stability and legitimacy, neither of which appears likely in the near future. They need assurances in the form of Hydrocarbon laws before they will make a long term investment like Iraq. They need to see a restructuring of the Oil Ministry and all the necessary fiscal and legal obstacles ironed out. They also need a clear oil policy that outlines the basic principles and modes to be followed for development, production-sharing, buyback, development and production, service contracts etc. (Oil Matters by Imad Khadduri)
This explains why the constitution is so critical to the Bush administration. Progress has been slow in Iraq and the majority of the American people now believe that we should leave. The constitution provides another milestone that the media can point to as sign of success in the hopes of bolstering public support. At the same time, it creates the justification for dividing the country (federalism) and excluding the Sunnis from the mix. The hope is that by isolating the Sunnis, who are the main part of the resistance, the oil-rich regions dominated by the Shiites and the Kurds will become more manageable.
But, Iraq does not simply divide along religious or ethnic lines. This is another gross miscalculation made by the administration and their colleagues in the think-tanks (the Council on Foreign Relations and the Rand Corp) who conjured up this scheme. The plan is shortsighted in its generalization of Iraqi society and doesnt take account the growing sense of Iraqi nationalism that is sweeping through Basra and Mosul as well as the Sunni triangle. There is overwhelming support to end the occupation and the only people talking about civil war are in the American media.
As Robert Fisk said just days ago, There wont be a civil war. Its just another scheme to intensify hostilities against the Iraqi people following the balloting.
So, how does all this relate to Iraqi oil and the future of the occupation?
The Bush administration cannot succeed in Iraq unless it establishes the security necessary to attract long term commitments from the major oil companies. Despite the viciousness of the occupation and the continuous political wrangling, the administration is no closer to creating a secure environment now than they were 2 years ago.
The task before the resistance is equally clear. They must make sure that not one drop of oil leaves Iraq without a struggle. When Washington finally grasps that the attacks on facilities will never cease or, when the global need for oil becomes too great to ignore; then there will be negotiations with the resistance and a political solution will be possible.
Thats why Iraqs oil should interest the antiwar movement.