Speaking at the London Institute of Petroleum in 1999, the soon to be Vice-President of the United States Dick Cheney made the following assertion:
“By some estimates there will be an average of 2% annual growth in global oil demand over the years ahead along with conservatively a 3% natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional 50 million barrels a day. So where is the oil going to come from? Governments and the national oil companies are obviously in control of about 90% of the assets. Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies...” [Emphasis Added].
As the new century dawned George Bush and Dick Cheney assumed office in Washington, along with Donald Rumsfeld as the new Secretary of Defence. These were the years when the neocons were on the ascendant in Washington. The neocons firmly promoted policies that advocated US military ‘activism’ to the point of using overwhelming ‘force’ to secure US strategic goals in the Middle East. Included in this was the belief that the US must effectively ‘demonstrate’ its overwhelming military and economic superiority. To maintain such a policy it would be imperative to ‘secure’ the oilfields of the Middle East, particularly those of Iraq, for without secure supplies of oil no major power projection could be sustained. The overthrow of Saddam Hussein would also mean the completion of ‘the job’ that had been left half done earlier. Also any threat to Israel, even if it was remote, had to be neutralised. It was to be the new American dominated century! But why single out Iraq and why was Iraqi oil so important?
Of the four major countries in the Arab World, Iraq is the only country that has huge oil assets, a sizeable population and sufficient water resources for sustainable agriculture. Egypt has the Nile, is over populated and has no substantial exportable surplus in oil. Saudi Arabia has huge quantities of oil but no water resources nor an indigenous population sufficient to fuel its great power ambitions. Syria is bereft of both.
As for Iraq its massive oil wealth has been both a boon as well as its nemesis. Usually three reasons are advanced for this. Firstly, Iraq’s oil is of very high quality and has attractive chemical properties such as high carbon content, lightness and low sulphur content that make it especially suitable for refining for high value products. For this reason Iraqi oil commands a high premium in the oil market. Secondly, Iraq’s oil is plentiful. Its proven reserves are estimated at 115 billion barrels.1 There are many promising areas in Iraq that still remain unexplored. The US Energy Department has estimated Iraqi reserves at 400 billion barrels. Pre- US Invasion, oil was being pumped out of only 15 of the proven 74 oil wells. Thus even with present estimated reserves, Iraq’s oil reserves are the second largest in the world, constituting some 11 per cent of the World’s total. These reserves are equal to those of the US, Canada, Mexico, Western Europe, Australia and New Zealand combined. By any account Iraq’s oil reserves are huge! Thirdly, the costs of producing oil in Iraq are probably the lowest in the world. More than a third of Iraq’s oil lies in wells that are just 600 metres from the surface. They can be tapped relatively easily. It costs about US$1.5 or about a dollar per barrel to produce oil in Iraq, as against $5 in countries such as Malaysia and Oman (in 2000 prices]. In countries such as Mexico and Russia, the costs are significantly higher. Offshore production areas like the North Sea with expensive platforms can cost even much more. In Texas and other North American areas, production costs are also prohibitively expensive. This is of course subject to security concerns being met. Given its combination of oil and water resources, is it any wonder that the land between the Euphrates and the Tigris has been coveted by many throughout the centuries.
On 15 August 2002, Brent Scowcroft, the former National Security Advisor to the elder Bush, wrote a perceptive piece in the Wall Street Journal, which was seen by many as the sage advice of the father [the first President Bush] to the son, President George W Bush. Advising against intervention in Iraq, Scowcroft wrote that: “this would divert for some indefinite period from our war on terrorism and that any military campaign would have to be followed by large scale long term military occupation.”
The then policy makers in the US did not pay heed to Brent Scowcroft’s words of wisdom with disastrous consequences both for the US as well as for the hapless people of Iraq. Occupation is never easy even if it is disguised as ‘liberation’; and no matter how odious the former rulers are. No one seriously doubted that Saddam would be easily overthrown. The question really was what do you do afterwards? And what have been the results in the last 10 years?
When the US decided to pull out in December 2011, it had suffered about 4500 dead and 25,000 soldiers injured. About 100,000 Iraqis had died and 1.5 million had fled abroad while about 1.7 million were internally displaced.2 The US has spent over a trillion and a half dollars and this huge expenditure has nearly unhinged its domestic economic equilibrium. The US is still counting the costs of its foreign military adventure.
Strategically, the results for the US have been even more disconcerting. With the overthrow of the Sunni-led Saddam government it was a foregone conclusion that any future dispensation would of necessity have a large Shiite component. This is because the Shiites are the largest community in Iraq and in any democratic set-up they were bound to win even though voting has largely been on tribal and sectarian lines. The shrewd Shiite clerics based near the holy cities of Najaf and Karbala waited for their opportunity and watched with obvious satisfaction while the US got rid of Saddam and his Sunni dominated government [which they had failed to achieve during the Iran-Iraq War of 1980-88]. They realised that the Sunni leadership was bound to get decimated at the hands of the US and they knew that the time would soon arrive for the clerical leadership of the Shiites to play the dominant role. The Shiite seminaries in Iraq have close links with their fellow Shiites in Iran. These ties are most evident in the network of ayatollahs, their representatives and organizations. The British and before them the Ottomans feared such links and therefore always encouraged Sunni domination of Iraq’s political space. All rulers of Iraq right up to Saddam were Sunnis.
With the Sunni leadership decimated it was but natural that a Shiite-led government would take its place. This Shiite-led government not only refused to let US troops stay on in Iraq, but has been fairly active in supporting its fellow Shiites in Syria. That Iran has utilised the space provided by Iraq to reinforce its alliance with Syria’s Assad is there for all to see. Politically, the Sunni Arab bloc led by Saudi Arabia, Jordan and the Gulf States finds itself in a bind for there is no Iraq to bolster their strength as in the past. Iraq would pride itself as the eastern gateway of the Arabs [al-bawwabeh al-sharqiyah], the cradle of Arab civilization and had always played a major role in Arab affairs. The loss of Iraq is indeed a tipping point in the history of Inter-Arab relations. Conversely, the strategic gain for Iran has been enormous.
To be fair to the US, however, Iraqi oil has begun to flow to world markets. It is because of this that the embargo imposed against Iranian oil by the western powers has had little adverse effect on the economy of the world; for Iraqi oil has simply replaced Iranian oil supplies. Iraq is today the second largest oil supplier from the Middle-East after Saudi Arabia. Therefore, it has been possible for the western powers to continue to tighten the sanctions against Iran without any ill-effects. To that limited extent the US can claim vindication of its Middle-East policies!
The Author is a Former Indian Ambassador to Iraq.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India
1. Lawrence Kumins, “Iraq Oil: Reserves, Production and Potential Revenues, CRS Report for US Congress, 13 April 2005.
2. AP Report from Baghdad, 13 March 2013, published in The Independent.
Iraq: Ten Years after the US-Led Invasion
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Speaking at the London Institute of Petroleum in 1999, the soon to be Vice-President of the United States Dick Cheney made the following assertion:
As the new century dawned George Bush and Dick Cheney assumed office in Washington, along with Donald Rumsfeld as the new Secretary of Defence. These were the years when the neocons were on the ascendant in Washington. The neocons firmly promoted policies that advocated US military ‘activism’ to the point of using overwhelming ‘force’ to secure US strategic goals in the Middle East. Included in this was the belief that the US must effectively ‘demonstrate’ its overwhelming military and economic superiority. To maintain such a policy it would be imperative to ‘secure’ the oilfields of the Middle East, particularly those of Iraq, for without secure supplies of oil no major power projection could be sustained. The overthrow of Saddam Hussein would also mean the completion of ‘the job’ that had been left half done earlier. Also any threat to Israel, even if it was remote, had to be neutralised. It was to be the new American dominated century! But why single out Iraq and why was Iraqi oil so important?
Of the four major countries in the Arab World, Iraq is the only country that has huge oil assets, a sizeable population and sufficient water resources for sustainable agriculture. Egypt has the Nile, is over populated and has no substantial exportable surplus in oil. Saudi Arabia has huge quantities of oil but no water resources nor an indigenous population sufficient to fuel its great power ambitions. Syria is bereft of both.
As for Iraq its massive oil wealth has been both a boon as well as its nemesis. Usually three reasons are advanced for this. Firstly, Iraq’s oil is of very high quality and has attractive chemical properties such as high carbon content, lightness and low sulphur content that make it especially suitable for refining for high value products. For this reason Iraqi oil commands a high premium in the oil market. Secondly, Iraq’s oil is plentiful. Its proven reserves are estimated at 115 billion barrels.1 There are many promising areas in Iraq that still remain unexplored. The US Energy Department has estimated Iraqi reserves at 400 billion barrels. Pre- US Invasion, oil was being pumped out of only 15 of the proven 74 oil wells. Thus even with present estimated reserves, Iraq’s oil reserves are the second largest in the world, constituting some 11 per cent of the World’s total. These reserves are equal to those of the US, Canada, Mexico, Western Europe, Australia and New Zealand combined. By any account Iraq’s oil reserves are huge! Thirdly, the costs of producing oil in Iraq are probably the lowest in the world. More than a third of Iraq’s oil lies in wells that are just 600 metres from the surface. They can be tapped relatively easily. It costs about US$1.5 or about a dollar per barrel to produce oil in Iraq, as against $5 in countries such as Malaysia and Oman (in 2000 prices]. In countries such as Mexico and Russia, the costs are significantly higher. Offshore production areas like the North Sea with expensive platforms can cost even much more. In Texas and other North American areas, production costs are also prohibitively expensive. This is of course subject to security concerns being met. Given its combination of oil and water resources, is it any wonder that the land between the Euphrates and the Tigris has been coveted by many throughout the centuries.
On 15 August 2002, Brent Scowcroft, the former National Security Advisor to the elder Bush, wrote a perceptive piece in the Wall Street Journal, which was seen by many as the sage advice of the father [the first President Bush] to the son, President George W Bush. Advising against intervention in Iraq, Scowcroft wrote that: “this would divert for some indefinite period from our war on terrorism and that any military campaign would have to be followed by large scale long term military occupation.”
The then policy makers in the US did not pay heed to Brent Scowcroft’s words of wisdom with disastrous consequences both for the US as well as for the hapless people of Iraq. Occupation is never easy even if it is disguised as ‘liberation’; and no matter how odious the former rulers are. No one seriously doubted that Saddam would be easily overthrown. The question really was what do you do afterwards? And what have been the results in the last 10 years?
When the US decided to pull out in December 2011, it had suffered about 4500 dead and 25,000 soldiers injured. About 100,000 Iraqis had died and 1.5 million had fled abroad while about 1.7 million were internally displaced.2 The US has spent over a trillion and a half dollars and this huge expenditure has nearly unhinged its domestic economic equilibrium. The US is still counting the costs of its foreign military adventure.
Strategically, the results for the US have been even more disconcerting. With the overthrow of the Sunni-led Saddam government it was a foregone conclusion that any future dispensation would of necessity have a large Shiite component. This is because the Shiites are the largest community in Iraq and in any democratic set-up they were bound to win even though voting has largely been on tribal and sectarian lines. The shrewd Shiite clerics based near the holy cities of Najaf and Karbala waited for their opportunity and watched with obvious satisfaction while the US got rid of Saddam and his Sunni dominated government [which they had failed to achieve during the Iran-Iraq War of 1980-88]. They realised that the Sunni leadership was bound to get decimated at the hands of the US and they knew that the time would soon arrive for the clerical leadership of the Shiites to play the dominant role. The Shiite seminaries in Iraq have close links with their fellow Shiites in Iran. These ties are most evident in the network of ayatollahs, their representatives and organizations. The British and before them the Ottomans feared such links and therefore always encouraged Sunni domination of Iraq’s political space. All rulers of Iraq right up to Saddam were Sunnis.
With the Sunni leadership decimated it was but natural that a Shiite-led government would take its place. This Shiite-led government not only refused to let US troops stay on in Iraq, but has been fairly active in supporting its fellow Shiites in Syria. That Iran has utilised the space provided by Iraq to reinforce its alliance with Syria’s Assad is there for all to see. Politically, the Sunni Arab bloc led by Saudi Arabia, Jordan and the Gulf States finds itself in a bind for there is no Iraq to bolster their strength as in the past. Iraq would pride itself as the eastern gateway of the Arabs [al-bawwabeh al-sharqiyah], the cradle of Arab civilization and had always played a major role in Arab affairs. The loss of Iraq is indeed a tipping point in the history of Inter-Arab relations. Conversely, the strategic gain for Iran has been enormous.
To be fair to the US, however, Iraqi oil has begun to flow to world markets. It is because of this that the embargo imposed against Iranian oil by the western powers has had little adverse effect on the economy of the world; for Iraqi oil has simply replaced Iranian oil supplies. Iraq is today the second largest oil supplier from the Middle-East after Saudi Arabia. Therefore, it has been possible for the western powers to continue to tighten the sanctions against Iran without any ill-effects. To that limited extent the US can claim vindication of its Middle-East policies!
The Author is a Former Indian Ambassador to Iraq.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India
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