By
Ismael Hossein-zadeh
Payvand.com - A most widely-cited factor behind the recent U.S. wars of choice is said to be
oil. "No Blood for Oil" has been a rallying cry for most of the opponents of the
war. While some of these opponents argue that the war is driven by the U.S.
desire for cheap oil, others claim that it is prompted by big oil's wish for
high oil prices and profits. Interestingly, most antiwar forces use both claims
interchangeably without paying attention to the fact that they are
diametrically-opposed assertions.
Not only do the two arguments contradict each other, but each argument is also
wanting and unconvincing on its own grounds; not because the U.S. does not wish
for cheap oil, or because Big Oil does not desire higher oil prices, but because
war is no longer the way to control or gain access to energy resources.
Colonial-type occupation or direct control of energy resources is no longer
efficient or economical and has, therefore, been abandoned for more than four
decades.
The view that recent U.S. military adventures in the Middle East and the broader
Central Asia are driven by energy considerations is further reinforced by the
dubious theory of Peak Oil, which maintains that, having peaked, world oil
resources are now dwindling and that, therefore, war power and military strength
are key to access or control of the shrinking energy resources.
In this study I will first argue that the Peak Oil theory is unscientific,
unrealistic, and perhaps even fraudulent. I will then show that war and military
force are no longer the necessary or appropriate means to gain access to sources
of energy, and that resorting to military measures can, indeed, lead to costly,
not cheap, oil. Next, I will demonstrate that, despite the lucrative spoils of
war resulting from high oil prices and profits, Big Oil prefers peace and
stability, not war and geopolitical turbulence, in global energy markets.
Finally, I will argue a case that behind the drive to war and military
adventures in the Middle East lie some powerful special interests (vested in
war, militarism, and geopolitical concerns of Israel) that use oil as an issue
of "national interest"—as a façade or pretext—in order to justify military
adventures to derive high dividends, both economic and geopolitical, from war.
Has Oil Really Peaked—and Is Running Out?
Peak oil thesis, as noted above, maintains that world oil reserves, having
reached their maximum capacity, are now dwindling—with grave consequences of oil
shortage and high energy prices. While this has led many to call for more
vigorous conservation, it has led others to argue in favor of unrestrained
exploration and extraction of oil reserves, especially those located in the
Alaskan Wildlife regions.
Significant policy and/or political implications follow from the view that oil
is running out. For one thing, this view provides fodder for the cannons of war
profiteering militarists who are constantly on the look out to invent new
enemies and find new pretexts for continued war and escalation of military
spending. For another, it tends to disarm many antiwar forces that accept this
thesis and, therefore, "internalize responsibility for U.S. foreign policy every
time they fill their gas tank. Thus they own the wars."[1]
The Peak Oil thesis serves as a powerful trap and a clever manipulation in that
it lets the real forces of war and militarism (the military-industrial complex
and the pro-Israel lobby) "off the hook; it is a fabulous redirection. All evils
are blamed on a commodity upon which we are all utterly dependent."[2]
The fact, however, is that there is no hard evidence that oil has peaked, or
that global oil reserves are shrinking, or that the current skyrocketing price
of oil is due to a supply shortage. (As shown below, there is actually an oil
surplus, no shortage.)
Peak oil theory is not altogether new. It was originally floated around in the
1940s, arguing that world oil reserves would be exhausted within the next two
decades or so. It then resurfaced in the 1970s and early 1980s in reaction to
the oil price hikes of those years—which were, incidentally, precipitated not by
oil shortages but by international political convulsions, revolutions and wars.
But it died down once the price of oil fell back to pre-crises levels.
As recent geopolitical convulsions in the Middle East (especially the U.S. war
on Iraq, and the resultant booming speculation in oil markets) have triggered a
new round of oil price hikes, Peak Oil theory has once again become fashionable.
The theory is being promoted not only by war profiteers and proponents of an
unbridled domestic oil exploration and extraction, especially in Alaska, but
also by some apparently antiwar liberals such as Michael T. Klare and James H.
Kunstler.[3]
Peak oil theory is based on a number of assumptions and omissions that make it
less than reliable. To begin with, it discounts or disregards the fact that
energy-saving technologies have drastically improved (and will continue to
further improve) the efficiency of oil consumption. Evidence shows that, for
example, "over a period of five years (1994-99), U.S. GDP expanded over 20
percent while oil usage rose by only nine percent. Before the 1973 oil shock,
the ratio was about one to one."[4]
Second, Peak Oil theory pays scant attention to the drastically enabling new
technologies that have made (and will continue to make) possible discovery and
extraction of oil reserves that were inaccessible only a short time ago. One of
the results of the more efficient means of research and development has been a
far higher success rate in finding new oil fields. The success rate has risen in
twenty years from less than 70 percent to over 80 percent. Computers have helped
to reduce the number of dry holes. Horizontal drilling has boosted extraction.
Another important development has been deep-water offshore drilling, which the
new technologies now permit. Good examples are the North Sea, the Gulf of
Mexico, and more recently, the promising offshore oil fields of West Africa.[5]
Third, Peak Oil theory also pays short shrift to what is sometimes called
non-conventional oil. These include Canada's giant reserves of extra-heavy
bitumen that can be processed to produce conventional oil. Although this was
originally considered cost inefficient, experts working in this area now claim
that they have brought down the cost from over $20 a barrel to $8 per barrel.
Similar developments are taking place in Venezuela. It is thanks to developments
like these that since 1970, world oil reserves have more than doubled, despite
the extraction of hundreds of millions of barrels.[6]
Fourth, Peak Oil thesis pays insufficient attention to energy sources other than
oil. These include solar, wind, non-food bio-fuel, and nuclear energies. They
also include natural gas. Gas is now about 25 percent of energy demand
worldwide. It is estimated that by 2050 it will be the main source of energy in
the world. A number of American, European, and Japanese firms have and are
investing heavily in developing fuel cells for cars and other vehicles that
would significantly reduce gasoline consumption.[7]
Fifth, proponents of Peak Oil tend to exaggerate the impact of the increased oil
demand coming from China and India on both the amount and the price of oil in
global markets. The alleged disparity between supply and demand is said to be
due to the rapidly growing demand coming from China and India. But that rapid
growth in demand is largely offset by a number of counterbalancing factors.
These include slower growth in U.S. demand due to its slower economic growth,
efficient energy utilization in industrially advanced countries, and increases
in oil production by OPEC, Russia, and other oil producing countries.
Finally, and perhaps more importantly, claims of "peaked and dwindling" oil are
refuted by the available facts and figures on global oil supply. Statistical
evidence shows that there is absolutely no supply-demand imbalance in global oil
markets. Contrary to the claims of the proponents of Peak Oil and champions of
war and militarism, the current oil price shocks are a direct consequence of the
destabilizing wars and geopolitical insecurity in the Middle East, not oil
shortages. These include not only the raging wars in Iraq and Afghanistan, but
also the threat of a looming war against Iran. The record of soaring oil prices
shows that anytime there is a renewed U.S. military threat against Iran, fuel
prices move up several notches.
The war also contributes to the escalation of fuel prices in indirect ways—for
example, by plunging the U.S. ever deeper into debt and depreciating the dollar,
or by creating favorable grounds for speculation. As oil is priced largely in
U.S. dollars, oil exporting countries ask for more dollars per barrel of oil as
the dollar loses value. Perhaps more importantly, an atmosphere of war and
geopolitical instability in global oil markets serves as an auspicious ground
for hoarding and speculation in commodity markets, especially oil, which is
heavily contributing to the recently soaring oil prices.
As much as 60% of
today's crude oil price is pure speculation driven by large trader banks and
hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has
to do with control of oil and its price. . . .
Since the advent of
oil futures trading and the two major London and New York oil futures contracts,
control of oil prices has left OPEC and gone to Wall Street. It is a classic
case of the 'tail that wags the dog.'[8]
Wall Street financial giants that created the Third World debt crisis in the
late 1970s and early 1980s, the tech bubble in the 1990s, and the housing bubble
in the 2000s are now hard at work creating the oil bubble. By purchasing large
numbers of futures contracts, and thereby pushing up futures prices to even
higher levels than current prices, speculators have provided a financial
incentive for oil companies to buy even more oil and place it in storage. A
refiner will purchase extra oil today, even if it costs $115 per barrel, if the
futures price is even higher.[9]
This has led to a steady rise in crude oil inventories over the last two years,
"resulting in US crude oil inventories that are now higher than at any time in
the previous eight years. The large influx of speculative investment into oil
futures has led to a situation where we have both high supplies of crude oil and
high crude oil prices. . . . In fact, during this period global supplies have
exceeded demand, according to the US Department of Energy."[10]
The fact that the skyrocketing oil prices of late have been accompanied by a
surplus in global oil markets was also brought to the attention of President
George W. Bush by Saudi officials when he asked them during a recent trip to the
kingdom to increase production in order to stem the rising prices. Saudi
officials reminded the President that "there is plenty of oil on the market.
Iran has put some 30 million barrels of oil that it can't sell into floating
storage. 'If we produced more oil, it wouldn't find buyers,' says the Saudi
source. It wouldn't affect the price at all."[11]
And why producing more oil "wouldn't affect the price at all"? Well, because
what is driving the soaring oil prices is not shortage but speculation: "with so
much investment money sloshing around in the commodities markets, the Saudis
calculate they have no hope of controlling short-term price fluctuations. They
blame the recent price run-ups on speculation and fear of shortages [not real
shortages], factors they say are beyond their control."[12]
War for Cheap Oil?
The widely-shared view that the U.S. desire for access to abundant and cheap oil
lurks behind the Bush administration's drive to war in the Middle East rests on
the implicit but dubious assumption that access to energy resources requires
direct control of oil fields and/or oil producing countries. There are at least
three problems with this postulation.
First, if control of or influence over oil producing countries in the Middle
East is a requirement for access to cheap oil, the United States already enjoys
significant influence over some of the major oil producers in the region—Saudi
Arabia, Kuwait, and a number of other smaller producers. Why, then, would the
U.S. want to bring about war and political turmoil in the region that might
undermine that long and firmly-established influence?
Let us assume for a moment that the neoconservative militarists are sincere in
their alleged desire to bring about democratic rule and representational
government in the Middle East. Let us further assume that they succeed in
realizing this purported objective. Would, then, the thus-emerging democratic
governments, representing the wishes of the majority of their citizens, be as
accommodating to U.S. economic and geopolitical objectives, including its oil
needs, as are its currently friendly rulers in the region? Most probably not.
Secondly, and more importantly, access to oil no longer requires control of oil
fields or oil producers—as was the case in times past. For more than a century,
that is, from the early days of oil extraction in the United States in the 1870s
until the mid-1970s, the price of oil was determined administratively, that is,
by independent producers operating in different parts of the world without
having to compete with each other. Under those circumstances, colonial or
imperial wars of conquest and occupation were crucial to the control of oil (and
other) resources.
Beginning with the 1950s, however, that pattern of local, non-competitive price
determination began to gradually change in favor of regional and/or
international markets. By the mid 1970s, an internationally competitive oil
market emerged that effectively ended the century-old pattern of local,
administrative pricing. Today, oil prices (like most other commodity prices) are
determined largely by the forces of supply and demand in competitive global
energy markets; and any country or company can have as much oil as they wish if
they pay the going market (or spot) price.[13]
To the extent that competitive oil markets and/or prices are occasionally
manipulated, such subversions of competitive market forces are often brought
about not so much by OPEC or other oil producing countries as by manipulative
speculations of financial giants in New York and London. As was discussed
earlier, gigantic Wall Street financial institutions have accomplished this feat
through "innovative" financial instruments such as establishment of energy hedge
funds and speculative oil futures markets in New York and London.[14]
It is true that collective supply decisions of oil producing countries can, and
sometimes does, affect the competitively determined market price. But a number
of important issues need to be considered here.
To begin with, although such supply manipulations obviously affect or influence
market-determined prices, they do not determine those prices. In other words,
competitive international oil markets determine its price with or without oil
producers' supply manipulations. Such supply managements are, however, designed
not to create volatility in energy markets, or chronic oil price hikes. Instead,
they are designed to stabilize global oil prices because oil exporting countries
prefer stability, predictability and long-term planning for their economic
development and industrialization projects. Here is how Cyrus Bina and Minh Vo
describe this relationship:
As a result, we conclude
that the global oil market is the prime mover [i.e., prime determinant of oil
price] and OPEC indeed follows its trajectory accordingly and consistently. . .
. When market price (both spot and futures) is falling, OPEC decreases its
output; when market price is rising, OPEC attempts to increase its output; and
when market price is steady, OPEC keeps its output unchanged. . . . And, this is
a kind of oil market we have experienced after the dust settled following the
crisis of de-cartelization and globalization of oil industry in the 1970s.[15]
Producers' policy to sometimes curtail or limit the supply of oil, the so-called
"limited flow" policy, is designed to raise the actual trading price above the
market-determined price in order to keep high-cost U.S. producers in business
while leaving low-cost Middle East producers with an above average, or "super,"
profit. While for low-cost producers this limited flow policy is largely a
matter of making more or less profits, for high-cost U.S. producers it is a
matter of survival, of being able to stay in or go out of business—an important
but rarely mentioned or acknowledged fact.
A hypothetical numerical example might be helpful here. Suppose that the
market-determined, or free-flow, price of oil is $30 per barrel. Further,
suppose this price entails an average rate of profit of 10 percent, or $3 per
barrel. The word "average" in this context refers to average conditions of
production, that is, producers who produce under average conditions of
production in terms of productivity and cost of production. This means that
producers who produce under better-than-average conditions, that is, low-cost,
high productivity producers, will make a profit higher than $3 per barrel while
high-cost, low efficiency producers will end up making less than $3 per barrel.
This also means that some of the high-cost producers may end up going out of
business altogether. Now, if the limited flow policy raises the actual trading
price to $35 per barrel, it will raise the profits of all producers accordingly,
thereby also keeping in business some high-cost producers that might otherwise
have gone out of business.
Furthermore, supply manipulation (in pursuit of price manipulation) is not
limited to the oil industry. In today's economic environment of giant
corporations and big businesses, many of the major industries try, and often
succeed in controlling supply in order to control price. Take, for example, the
automobile industry. Theoretically, automobile producers could flood the market
with a huge supply of cars. But that would not be good business as it would
lower prices and profits. So, they control supply, just as do oil producers, in
order to manipulate price. During the past several decades, the price of
automobiles, in real terms, has been going up every year, at least to the tune
of inflation. During this period, the industry (and the economy in general) has
enjoyed a many-fold increase in labor productivity. Increased labor productivity
is supposed to translate into lower costs and, therefore, lower prices. Yet,
that has not materialized in the case of this industry—as it has in the case of,
for example, pocket calculators or computers.
Another example of price control through supply manipulation is the case of U.S.
grain producers. The so-called "set aside" policy that pays farmers not to
cultivate part of their land in order to curtail supply and prop up price is not
different—nay, it is worse— than OPEC's policy of supply and/or price
manipulation.
It is also necessary to keep in mind that OPEC's desire to sometimes limit the
supply of oil in order to shore up its price is limited by a number of factors.
For one thing, the share, and hence the influence, of Middle Eastern oil
producers as a percentage of world oil production has steadily declined over
time, from almost 40 percent when OPEC was established to about 30 percent
today.[16] For another, OPEC members are not unmindful of the fact that
inordinately high oil prices can hurt their own long-term interests as this
might prompt oil importers to economize on oil consumption and search for
alternative sources of energy, thereby limiting producers' export markets.
OPEC members also know that inordinately high oil prices could precipitate
economic recessions in oil importing countries that would, once again, lower
demand for their oil. In addition, high oil prices tend to raise the cost of oil
producers' imports of manufactured products as high energy costs are bound to
affect production costs of those manufactured products.
War for Expensive Oil?
Now let us consider the widely-shared view that attributes the Bush
administration's drive to war to the influence of big oil companies in pursuit
of higher oil prices and profits. As noted, this is obviously the opposite of
the "war for cheap oil" argument, as it claims that Big Oil tends to instigate
war and political tension in the Middle East in order to cause an oil price hike
and increase its profits. Like the "war for cheap oil" theory, this claim is not
supported by facts. Although the claim has an element of a prima facie
reasonableness, that apparently facile credibility rests more on precedent and
perception than reality. Part of the perception is due to the exaggerated notion
that both President Bush and Vice President Cheney were "oil men" before coming
to the White House. But the fact is that George W. Bush was never more than an
unsuccessful petty oil prospector and Dick Cheney headed a company, the
notorious Halliburton, that sold (and still sells) services to oil companies and
the Pentagon.
The larger part of the perception, however, stems from the fact that oil
companies do benefit from oil price hikes that result from war and political
turbulence in the Middle East. Such benefits are, however, largely incidental.
Surely, American oil companies would welcome the spoils of the war (that result
from oil price hikes) in Iraq or anywhere else in the world. From the largely
incidental oil price hikes that follow war and political convulsion, some
observers automatically conclude that, therefore, Big Oil must have been behind
the war.[17] But there is no evidence that, at least in the case of the current
invasion of Iraq, oil companies pushed for or supported the war.
On the contrary, there is strong evidence that, in fact, oil companies did not
welcome the war because they prefer stability and predictability to periodic oil
spikes that follow war and political convulsion: "Looking back over the last 20
years, there is plenty of evidence showing the industry's push for stability and
cooperation with Middle Eastern countries and leaders, and the U.S. government's
drive for hegemony works against the oil industry."[18] As Thierry Desmarest,
Chairman and Chief Executive Officer of France's giant oil company, TotalFinaElf,
put it, "A few months of cash generation is not a big deal. Stable, not
volatile, prices and a $25 price (per barrel) would be convenient for
everyone."[19]
It is true that for a long time, from the beginning of Middle Eastern oil
exploration and discovery in the early twentieth century until the mid-1970s,
colonial and/or imperial powers controlled oil either directly or through
control of oil producing countries—at times, even by military force. But that
pattern of colonial or imperialist exploitation of global markets and resources
has changed now. Most of the current theories of imperialism and hegemony that
continue invoking that old pattern of Big Oil behavior tend to suffer from an
ahistorical perspective. Today, as discussed earlier, even physically occupying
and controlling another country's oil fields will not necessarily be beneficial
to oil interests. Not only will military adventures place the operations of
current energy projects at jeopardy, but they will also make the future plans
precarious and unpredictable. Big Oil interests, of course, know this; and
that's why they did not countenance the war on Iraq: "The big oil companies were
not enthusiastic about the Iraqi war," says Fareed Mohamedi of PFC Energy, an
energy consultancy firm based in Washington D.C. that advises petroleum firms.
"Corporations like Exxon-Mobil and Chevron-Texaco want stability, and this is
not what Bush is providing in Iraq and the Gulf region," adds Mohamedi.[20]
Big Oil interests also know that not only is war no longer the way to gain
access to oil, it is in fact an obstacle to gaining that access. Exclusion of
U.S. oil companies from vast oil resources in countries such as Russia, Iran,
Venezuela, and a number of central Asian countries due to militaristic U.S.
foreign policy is a clear testament to this fact. Many of these countries
(including, yes, Iran) would be glad to have major U.S. oil companies invest,
explore and extract oil from their rich reserves. Needless to say that U.S. oil
companies would be delighted to have access to those oil resources. But U.S.
champions of war and militarism have successfully torpedoed such opportunities
through their unilateral wars of aggression and their penchant for a Cold
War-like international atmosphere.
When
Vladimir Putin first became president of Russia he was willing to allow American
energy companies to continue with the one-sided contracts they had drawn up
during Boris Yeltsin's presidency. Putin built a seemingly trusting relationship
with George Bush who looked into Putin's soul and liked what he saw. The two
leaders grew even closer in the aftermath of the 9/11 attacks on World Trade
Centre and the Pentagon—when Russia provided "help for America's invasion of
Afghanistan." Soon after this generous cooperation, however, "Bush repudiated
the anti-ballistic missile treaty in the belief that America could develop the
technology for winning a nuclear war. This posed a huge strategic threat to
Russia."[21]
Describing the heavy-handed, imperial U.S. policy toward Russia, Stephen F.
Cohen writes: "The real US policy has been very different—a relentless,
winner-take-all exploitation of Russia's post-1991 weakness. Accompanied by
broken American promises, condescending lectures and demands for unilateral
concessions, it has been even more aggressive and uncompromising than was
Washington's approach to Soviet Communist Russia."[22]
Bush's withdrawal from the ABM treaty not merely posed an existential threat to
Russia but was almost a betrayal of the trust that Putin had put in him. This
led to Putin's disenchantment with America. "Eventually he seems to have decided
that every time America transgressed against Russian interests he would
retaliate by stopping another American company from exploiting Russian
resources."[23]
During the past few decades, major oil companies have consistently opposed U.S.
policies and military threats against countries like Iran, Iraq, and Libya. They
have, indeed, time and again, lobbied U.S. foreign policy makers for the
establishment of peaceful relations and diplomatic rapprochement with those
countries. The Iran-Libya Sanction Act of 1996 (ILSA) is a strong testament to
the fact that oil companies nowadays view wars, economic sanctions, and
international political tensions as harmful to their long-term business
interests and, accordingly, strive for peace, not war, in international
relations.
On March 15, 1995 President Clinton issued Executive Order 12957 which banned
all U.S. contributions to the development of Iran's petroleum resources, a
crushing blow to the oil industry, especially to the Conoco oil company that had
just signed a $1 billion contract to develop fields in Iran. The deal marked a
strong indication that Iran was willing to improve its relationship with the
United States, only to have President Clinton effectively nullify it. Two months
later, sighting "an extraordinary threat to the national security, foreign
policy and economy of the U.S.," President Clinton issued another order, 1259,
that expanded the sanctions to become a total trade and investment embargo
against Iran. Then a year later came ILSA which extended the sanctions imposed
on Iran to Libya as well.
It is no secret that the major force behind the Iran-Libya Sanction Act was the
America Israel Public Affairs Committee (AIPAC), the main Zionist lobby in
Washington. The success of AIPAC in passing ILSA through both the Congress and
the White House over the opposition of the major U.S. oil companies is testament
to the fact that, in the context of U.S. policy in the Middle East, even the
influence of the oil industry pales vis-à-vis the influence of the Zionist
lobby.[24]
ILSA was originally to be imposed on both U.S. and foreign companies. However,
in the end it was the U.S. companies that suffered the most due to waivers that
were given to European companies after pressure from the European Union. In 1996
the EU pursued its distaste of ILSA by lodging complaints with the World Trade
Organization (WTO) against the U.S. and through adopting "blocking legislation"
that would prevent EU companies from complying with ILSA. Meanwhile, the
contract that Iran had originally signed with Conoco was awarded to TotalFinaElf
of France for $760 million; the deal also left the door open for Total to sign
an additional contract with Iran for $2 billion in 1997 with their partners
Gazprom and Petronas.
In May of 1997 major U.S. oil companies such as Conoco, Exxon, Atlantic
Richfield, and Occidental Petroleum joined other (non-military) U.S. companies
to create an anti-sanction coalition. Earlier that same year Conoco's Chief
Executive Archie Dunham publicly took a stance against unilateral U.S. sanctions
by stating that "U.S. companies, not rogue regimes, are the ones that suffer
when the United States imposes economic sanctions." Texaco officials have also
argued that the U.S. can be more effective in bringing about change in other
countries by allowing U.S. companies to do business with those countries instead
of imposing economic sanctions that tend to be counterproductive.
Alas, Washington's perverse, misguided and ineffectual policy of economic
sanctions for political purposes—often in compliance with the wishes of some
powerful special interests—continues unabated. "Even with the increased
pro-trade lobbying efforts of the oil industry and groups like USAEngage, whose
membership ranges from farmers and small business owners to Wall Street
executives and oilmen, the lack of support from Washington and the Bush
administration could not allow them [major oil companies and other non-military
transnational companies] to overtake or counteract the already rolling momentum
of AIPAC's influence on Middle East policy or the renewal of ISLA."[25]
Despite the fact that oil companies nowadays view war and political turmoil in
the Middle East as detrimental to their long-term interests and, therefore, do
not support policies that are conducive to war and militarism, and despite the
fact that war is no longer the way to gain access to oil, the widespread
perception that every U.S. military engagement in the region, including the
current invasion of Iraq, is prompted by oil considerations continues. The
question is why?
Behind the Myth of War for Oil
The widely-shared but erroneous view that recent U.S. wars of choice are driven
by oil concerns is partly due to precedence: the fact that for a long time
military force was key to colonial or imperialist control and exploitation of
foreign markets and resources, including oil. It is also partly due to
perception: the exaggerated notion that both President Bush and Vice President
Cheney were "oil men" before coming to the White House. But, as noted earlier,
George W. Bush was never more than an ineffective minor oil prospector and Dick
Cheney was never really an oil man; he headed the notorious Halliburton company
that sold (and still sells) services to oil companies and the Pentagon.
But the major reason for the persistence of this pervasive myth seems to stem
from certain deliberate efforts that are designed to perpetuate the legend in
order to camouflage some real economic and geopolitical special interests that
drive U.S. military adventures in the Middle East. There is evidence that both
the military-industrial complex and hard-line Zionist proponents of "greater
Israel" disingenuously use oil (as an issue of national interest) in order to
disguise their own nefarious special interests and objectives: justification of
continued expansion of military spending, extension of sales markets for
military hardware, and recasting the geopolitical map of the Middle East in
favor of Israel.
There is also evidence that for every dollar's worth of oil imported from the
Persian Gulf region the Pentagon takes five dollars out of the Federal budget to
"secure" the flow of that oil! This is a clear indication that the claim that
the U.S. military presence in the Middle East is due to oil consideration is a
fraud
.[26]
While anecdotal, an example of how partisans of war and militarism use oil as a
pretext to cover up the real forces behind war and militarism can be
instructive. In the early stages of the invasion of Iraq, when the
anti-occupation resistance in Iraq had not yet taken shape and the invasion
seemed to be proceeding smoothly, two of the leading champions of the invasion,
Secretary of Defense Donald Rumsfeld and his deputy Paul Wolfowitz, often
boasting of the apparent or pre-mature success of the invasion at those early
stages, gave frequent news conferences and press reports. During one of those
press reports (at the end of an address to delegates at an Asian security summit
in Singapore in early June 2003), Wolfowitz was asked why North Korea was being
treated differently from Iraq, where hardly any weapons of mass destruction had
been found. Wolfowitz's response was: "Let's look at it simply. The most
important difference between North Korea and Iraq is that economically, we just
had no choice in Iraq. The country swims on a sea of oil."[27]
Many opponents of the war jumped on this statement, so to speak, as
corroboration of what they had been saying or suspecting all along: that the war
on Iraq was prompted by oil interests. Yet, there is strong evidence—some of
which presented in the preceding pages—that for the last several decades oil
interests have not favored war and turbulence in the Middle East, including the
current invasion of Iraq. Nor is war any longer the way to gain access to oil.
Major oil companies, along with many other non-military transnational
corporations, have lobbied both the Clinton and Bush administrations in support
of changing the aggressive, militaristic U.S. policy toward countries like Iran,
Iraq and Libya in favor of establishing normal, non-confrontational trade and
diplomatic relations. Such efforts at normalization of trade and diplomatic
relations, however, have failed time and again precisely because Wolfowitz and
his cohorts, working through AIPAC and other war-mongering think tanks such as
the American Enterprise Institute (AEI), Project for the New American Century (PNAC),
and Jewish Institute for National Security Affairs (JINSA) oppose them.
These think tanks, in collaboration with a whole host of similar militaristic
lobbying entities like Center for Security Affairs (CSA) and
National Institute for Public Policy (NIPP), working
largely as institutional façades to serve the defacto alliance of the
military-industrial complex and the pro-Israel lobby, have repeatedly thwarted
efforts at peace and reconciliation in the Middle East—often over the objections
and frustrations of major U.S. oil companies. It is a well established fact that
Wolfowitz has been a devoted champion of these jingoistic think tanks and their
aggressive unilateral policies in the Middle East. In light of his professional
record and political loyalties, his claim that he championed the war on Iraq
because of oil considerations can be characterized only as demagogic: it
contradicts his political record and defies the policies he has been advocating
for the last several decades; it is designed to divert attention from the main
forces behind the war, the armaments lobby and the pro-Israel lobby.
These powerful interests are careful not to draw attention to the fact that they
are the prime instigators of war and militarism in the Middle East. Therefore,
they tend to deliberately perpetuate the popular perception that oil is the
driving force behind the war in the region. They even do not mind having their
aggressive foreign policies labeled as imperialistic as long as imperialism
implies some vague or general connotations of hegemony and domination, that is,
as long as it thus camouflages the real, special interests behind the war and
political turbulence in the Middle East.
The oil and other non-military transnational corporations' aversion to war and
military adventures in the Middle East stem, of course, from the logical
behavior of global or transnational capital in the era of integrated world
markets, which tends to be loath to war and international political convulsions.
Considering the fact that both importers and exporters of oil prefer peace and
stability to war and militarism, why would, then, the flow of oil be in jeopardy
if the powerful beneficiaries of war and political tension in the Middle East
stopped their aggressive policies in the region?
Partisans of war in the Middle East tend to portray U.S. military operations in
the region as reactions to terrorism and political turbulence in order to
"safeguard the interests of the United States and its allies." Yet, a close
scrutiny of action-reaction or cause-effect relationship between U.S. military
adventures and socio-political turbulence in the region reveals that perhaps the
causality is the other way around. That is, social upheavals and political
convulsions in the Middle East are more likely to be the result, not the cause,
of U.S. foreign policy in the region, especially its one-sided, prejudicial
Israeli-Palestinian policy. The U.S. policy of war and militarism in the region
seems to resemble the behavior of a corrupt cop, or a mafia godfather, who would
instigate fights and frictions in the neighborhood or community in order to,
then, portray his parasitic role as necessary for the safety and security of the
community and, in the process, fill out his deep pockets.
No matter how crucial oil is to the world economy, the fact remains that it is,
after all, a commodity. As such, international trade in oil is as important to
its importers as it is to its exporters. There is absolutely no reason that, in
a world free of the influence of the beneficiaries of war and militarism and
their powerful lobbies (the armaments and the pro-Israel lobbies), the flow of
oil could not be guaranteed by international trade conventions and commercial
treaties.
___________________________
References
[1] Ron Andreas, reporter/researcher, e-mail correspondence with
the author.
[2] Ibid.
[3] Michael T. Klare, Resource Wars: The New Landscape of Global Conflict
(New York: Holt paperbacks 2002); James Howard Kunstler,
The
Long Emergency: Surviving the Converging Catastrophes of the Twenty-first
Century
(Grove/Atlantic, 2005).
[4]
Eliyahu Kanovsky, "Oil:
Who's Really Over a Barrel?" Middle East Quarterly (Spring 2003), http://www.meforum.org/article/527
[5] Ibid.
[6]
The Wall
Street Journal
(17 May 2001); cited in Eliyahu Kantovsky, Ibid.
[7] The Wall Street Journal (10 March 1998); cited in
Eliyahu Kantovsky, Ibid.
[8]
F. William Engdahl, "Perhaps 60% of Today's Oil Price Is Pure
Speculation," financialsense.com (2 May 2008), http://www.financialsense.com/editorials/engdahl/2008/0502.html
[9] Ibid.
[10] Ibid.
[11] Stanley Reed, "Help
from the House of Saud: Why the leading oil producer wants to cool off the
market," Business Week (29 May 2008),
[12] Ibid.
[13] Cyrus Bina and Minh Vo, "OPEC in the Epoch of Globalization:
An Event Study of Global Oil Prices," Global Economy Journal, Vol. 7,
Issue 1 (2007); for a discussion of the theory and history of oil price
determination see also, Cyrus Bina, "The Rhetoric of Oil and the Dilemma of War
and American Hegemony," Arab Studies Quarterly 15, no. 3 (Summer 1993);
also Cyrus Bina, "Limits of OPEC Pricing: OPEC Profits and the Nature of Global
Oil Accumulation," OPEC Review 14, no. 1 (Spring 1990).
[14] F. William Engdahl, "Perhaps
60% of Today's Oil Price Is Pure Speculation," financialsense.com (2
May 2008)
[15] Cyrus Bina and Minh Vo, "OPEC in the Epoch of Globalization:
An Event Study of Global Oil Prices," Global Economy Journal, Vol. 7,
Issue 1 (2007).
[16] Gary S. Becker, "Why War with Iraq Is Not about Oil,"
Business Week (17 March 2003): 30.
[17] Johnathan Nitzan and Shimshon Bichler. The Global
Political Economy of Israel (London and Sterling, Virginia: Pluto Press,
2002).
[18] Melinda K. Ruby, "Is Oil the Driving Force to War?"
unpublished Senior thesis, Dept. of Economics and Finance, Drake University, Des
Moines, Iowa (spring 2004), 10.
[19] As quoted in Ruby, Ibid., P. 13.
[20] As cited by Roger Burbach, "Bush
Ideologues vs. Big Oil: The Iraq Game Gets Even Stranger," Counterpunch.
[21] Israel Shamir,
The
Writings of Israel Shamir, Contributor 45
[22]
Stephen
F. Cohen "The New American
Cold War," The Nation (10 July 2006), as quoted in Shamir, Ibid.
[23]
Shamir, Ibid.
[24] Ruby, "Is Oil the Driving Force to War?" pp. 14-15; see also
Herman Franssen and Elaine Morton, "A Review of U.S. Unilateral Sanctions
Against Iran," Middle East Economic Survey 45, no. 34 (26 August 2002),
pp. D1-D5 (D section contains op eds. as opposed to staff-written articles).
[25] Ruby, "Is Oil the Driving Force to War?" pp. 16-17; see also
David Ivanovich, "Conoco's Chief Blasts Sanctions," Houston Chronicle (12
February 1997).
[27] The statement was widely reported by many news papers and
other media outlets. See, for example, The
Guardian (4
June 2003).
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