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From The Socialist newspaper, 13 September 2002

No War For Oil Profits

"WE'RE NOT talking about a war in Tora Bora here. We're talking about a war in the world's main petrol station." That's how New York Times journalist Thomas Friedman assessed the prospects for an imperialist invasion of Iraq.

Kevin Parslow

Whatever the need for US imperialism to restore its prestige or to enhance its strategic interests, the defence of oil supplies has been and will continue to be one of the major, if not the major, factor in deciding whether to intervene in the Middle East.

Intervention could not be isolated to Iraq itself but would have repercussions throughout the Middle East and Islamic world, including oil producers.

Oil, 'black gold', has been of huge consequence in past conflicts in the Middle East. In 1973, following the Yom Kippur War, Middle East oil states turned down the taps to the capitalist world. The price of oil shot up fourfold to $40 a barrel.

While not the major cause of the world recession of 1973-75, it brought it forward and deepened the crisis. But it wasn't all bad news for capitalism as the rise in price created huge wealth ('petrodollars') for the oil sheikhs, some of which was reinvested in the world's major capitalist economies.

Following the Islamic revolution in Iran in 1979, imperialism feared the spread of political Islam throughout the Middle East. This would have had dangerous consequences for pro-western regimes and their oil reserves. They were quite happy to fund and arm Saddam Hussein at that time, in his war against the regime of the ayatollahs.

The Iran-Iraq War lasted eight years; it was fought to a stalemate, but it prevented the downfall of pro-imperialist regimes for a time. But Saddam Hussein overestimated his value to imperialism. He thought the US had given him a green light for his invasion of Kuwait in August 1990.

This was immediately seen as a threat to imperialism's oil supplies, with Kuwait's reserves now in Iraqi hands and the danger of Saudi Arabia and other Gulf states falling to Iraq if imperialism did nothing.

Therefore, the US government, led by George Bush senior, organised the recapture of Kuwait from Iraq in early 1991. On this occasion, they gained the support of most Middle East states, fearful for their own future if nothing was done to check Saddam.

Punitive sanctions

AT THAT time, however, imperialism's leaders, including Colin Powell, concluded that it would be hazardous to continue into Iraq to overthrow Saddam. The risks outweighed the benefits. Nevertheless, imperialism imposed punitive sanctions and reparations on Iraq for its destruction of Kuwaiti oil fields, including limiting the amount of oil it could bring onto the market.

Now the security of oil supplies is again a factor. The US has been committed to defending the royal house of Saud ever since President Roosevelt visited the kingdom in 1945 following the Yalta conference of wartime leaders.

Despite the US's support for the creation of the state of Israel and its later expansionist policies, it has always maintained its role as defender of the Saudi feudal regime. In return, as the world's largest producer, the Saudis have regulated the world's oil supply.

But some US strategists are arguing that the reactionary Saudi theocratic regime is on the verge of collapse, to be replaced by an even more 'fundamentalist' one, which would be hostile to US interests. Saudi citizens were active in the destruction of the World Trade Center and are prominent in al-Qa'ida; such 'strategists' see no benefit in continuing to defend the regime.

But they would possibly need to replace its oil supplies; they have considered using Russian oil, even West Africa, where they suggest Nigeria could leave OPEC for economic gains, and they would like to drill in the Alaskan forests, to the protests of those defending the environment.

But they conclude that only Iraq's reserves of up to 200 billion barrels, the second largest in the world, could replace the loss of Saudi oil. 'Regime change' in Baghdad would put a compliant government in power and hopefully allow unfettered exploitation of the oil reserves.

But as more far-thinking strategists argue, the US has even less support now in the Middle East than in 1990-91, and the consequences of an invasion would not stop at Iraq's borders.

Risky strategy

THIS TIME Middle Eastern states are wary of supporting imperialism as the US continues to support Israel's oppression of the Palestinians, and they fear that an invasion would bring down their own regimes.

This would have its own effects on oil supplies for imperialism. As in 1973, the Gulf War in 1991 produced a large oil-price increase which worsened the world economic situation. The effects of the US recession that followed saw George Bush senior lose the 1992 elections to Clinton.

A war now would cause problems for the world economy as well. A $5 a barrel rise in oil prices over a year is estimated to knock 0.25% off world gross domestic product.

With the world's economies already sickly, the price of oil is already 36% higher than on 1 January rising towards $30 a barrel as the war drums beat.

The effects would be an increase in inflation as prices rise but at the same time job losses and lower production. In addition, the Saudis are starting to withdraw large amounts of the invested petrodollars from the US. This would have disastrous effects for the value of the dollar.

Energy interests were the big backers of the Bush/Cheney presidential campaign, This is 'their' government; both Bush and Cheney worked for oil and energy businesses. They hope to gain the lion's share of concessions in any post-Saddam regime.

But their methods are extremely risky for imperialism's oil supplies; Mo Mowlam wrote recently that Saddam "is now the distraction for the sleight of hand to protect the west's supply of oil".

But it will take more than magic for the US to pull off the trick of overthrowing Saddam without serious repercussions for the price or supply of 'black gold'.

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In The Socialist 13 September 2002:

"We won't pay the price": No To War On Iraq

Firefighters' pay: Strike Now For A Living Wage

A Rocky Road To War

Renationalise British Energy

No War For Oil Profits

Lifting The Lid On Poverty Pay

European Social Forum: A Socialist World Is Possible


 

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