It’s All About Oil

17 September 2007

It’s All About Oil

By Gwynne Dyer

Australia’s defence minister, Brendan Nelson, is not the sharpest tool in the box, so people were not really surprised in July when he blurted out that the real motive for invading Iraq was oil: “Obviously the Middle East itself, not only Iraq but the entire region, is an important supplier of energy, oil in particular, to the rest of the world. Australians and all of us need to think what would happen if there was a premature withdrawal from Iraq.”

Silly old Brendan, off-message again. Didn’t he know that Australia invaded Iraq because of its weapons of mass destruction? No, wait a minute, it was because Saddam Hussein might help Islamist terrorists. Hang on, forget that, we really went there to bring the blessings of democracy to the Iraqi people, dead or alive. Brendan just mis-spoke himself about the oil.

Fast forward two months, and a rather sharper tool has just offered the same analysis. Alan Greenspan, chairman of the US Federal Reserve banking system for eighteen years and the high priest of capitalism, puts it quite brutally in his new book, “The Age of Turbulence.”

“Whatever their publicised angst over Saddam Hussein’s ‘weapons of mass destruction’,” Greenspan wrote, “American and British authorities were also concerned about violence in the area that harbours a resource indispensable for the functioning of the world economy. I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”

“What everyone knows”? No, what everyone has been encouraged to believe, by the protestors and the manipulators alike. And poor old Alan fell for it too.

In interviews following the publication of his book last week, Greenspan explained that Saddam Hussein had wanted to seize the Strait of Hormuz, and so control oil shipments through the only sea route out of the Gulf. It would have been “devastating for the West,” he said, if Saddam had done that. The Iraqi dictator could have shut off 5 million barrels a day and brought “the industrial world to its knees.”

Actually, more than twice that amount of oil leaves Saudi Arabia, Iraq, Iran, Kuwait, Bahrain, Qatar and the United Arab Emirates each day in tankers and passes through the Strait of Hormuz, so it really is a crucial waterway. But Saddam Hussein couldn’t close it.

Saddam Hussein was a bad man. He probably held the record in the modern Middle East for the number of citizens his army, secret police and torturers had killed. But control the Strait of Hormuz? He had about as much chance of doing that as he did of controlling the English Channel, and anybody with access to a map should have known it.

Iraq lies at the north-western end of the Gulf, one thousand kilometres (600 miles) from the Strait of Hormuz. It has only fifty km. (30 miles) of coastline, and most of its naval and air assets were destroyed in the Gulf War of 1991. It had NO strategic ability to reach that far east. Even if the US Navy had not been permanently present in the Gulf in overwhelming force, the notion of an Iraqi military threat to the Strait of Hormuz was sheer nonsense.

The only country in the region with the military ability to shut the Strait of Hormuz is Iran. Since it depends on oil income to support its domestic economy and feed its population, it won’t do that unless it is attacked. It may call the United States the “Great Satan,” but it has pumped oil as fast as it could and sold it at the world market price every year since the 1979 revolution. It can’t afford to care where the oil ends up.

That is true of all the major oil exporters, whatever their political convictions. They HAVE to sell their oil, so it does not really matter much to the West who rules these countries (although it obviously matters greatly to the local residents). You don’t need to invade countries to get oil from them. Just send them a cheque.

There’s no point in invading Iraq to control the oil price, either. The price is set by a very efficient global market, and not even all of Iraq’s oil will give you enough leverage to force the price down. Besides, why would an administration whose closest friends are in the American oil industry want to force the price of oil down?

Greenspan doubtless believed what he said, but it doesn’t make sense. He just fell for the cover story that “it’s all about oil,” which serves to distract Western electorates from the more complex and often even less defensible motives of their governments.

So why did they invade Iraq, in the end? One motive was certainly the desire for permanent American military bases in the Gulf from which the United States could, at need, stop oil flowing to China. The strategic community in Washington has identified China as America’s new strategic rival, and it is becoming more and more vulnerable to interference with its oil imports. (Those “enduring bases” are still being built in Iraq.) But that is not a big enough reason to explain what happened.

I have written tens of thousands of words on the Bush administration’s motives for invading Iraq, but in the end I do not know why they did it. I suspect that they don’t, either. It just seemed like a neat idea at the time.


To shorten to 725 words, omit paragraphs 2, 7, and 12. (“Silly…oil”;”Actually…it”; and “There’s no…down”)