A-Infos (en) UK, AF, Organise #60 - Oil

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The US Department of Energy announced at the
beginning of this month that by 2025, US oil imports
will account for perhaps 70% of total US domestic
demand (1). US oil deposits are becoming
progressively depleted and many other non-OPEC
fields are beginning to run dry. 'This really means that
the bulk of future supplies will have to come from the
Gulf region' (2). Since Iraq has the second largest
reserves of oil in the world after Saudi Arabia, it
seems sensible to seize them particularly now that
Bush and Cheney are in the White House; both are
former oil company executives while Bush Snr. was
founder, in 1954, of the Zapata Offshore Oil Company.
Cheney, when president of the Halliburton Company
of Houston, sold Saddam $23 billion dollars of oil field
equipment. "In last April's New Yorker, the
investigative reporter Nicholas Lemann wrote that
Bush's most senior adviser, Condoleeza Rice, told
him she had called together senior members of the
National Security Council and asked them "to think
about how to capitalise on these opportunities", which
she compared with those of 1945-1947: the start of the
Cold War." (John Pilger) "The Bush administration,
intimately entwined with the global oil industry, is
keen to pounce on Iraq's massive untapped reserves,
the second biggest in the world after Saudi Arabia's.
But France and Russia, who hold a power of veto on
the UN Security Council, have billion-dollar contracts
with Baghdad, which they fear will disappear in 'an oil
grab by Washington', if America installs a successor
to Saddam." (The Observer)

There are a number of interrelated issues here: Firstly
the profits of individual corporations are dependent
on relations with the oil producing states. A
diversification of oil production - opening up new
sources of supply (such as that in Central Asia or by
re-bringing Iraqi oil on to the open market) weakens
the power of OPEC, the consortium of oil producing
states, thereby strengthening the bargaining position
of the corporations who purchase from them.
Furthermore an increase in American military power
in the area will naturally be used to benefit
American-based corporations as opposed to, say,
French ones. However, if it was just a matter of the
interests of individual corporations or sectors of the
economy, then market competition would compel
them to, for short term reasons, do business with Iraq,
irrespective of what regime is in power there; so
secondly, and most importantly, the question is where
does the profits which have been creamed off the
backs of the working class in oil-producing areas end
up. It can be re-invested in the world economic
system dominated by elites in the West as we can see
in this extract on Saudi Arabia from the Washington
Post: "Since the 1970s, Saudi Arabia has shifted from
its role as a large oil supplier to becoming the
principal US ally and economic partner in the region.
In the 1970s and 1980s, it bolstered the international
banking system with its oil revenue..... Since 1981, US
construction companies and arms suppliers have
earned more than $50 billion in Saudi Arabia,
according to the Congressional Research Service.
......US investments in the country reached $4.8 billion
in 2000, according to the Commerce Department. The
US oil giant Exxon Mobil Corp. recently was chosen
by the Saudi government to lead two of three
consortiums developing gas projects worth
$20bn-$26bn." (Washington Post 21/9/01) However a
nationalist government in power in an oil producing
area, aiming to build up a native industrial base, as
did most of the rouges in the Middle East "the West"
has fought against, from Nasser to Hussein, would
make for lost profits as the wealth which could go to
the coffers of the banks, arms companies,
construction companies and what have you of the
West, instead is invested developing local industry.
This is bad news, not just because of that lost profit,
but even more fundamentally given that we are
talking about areas where lies one of the most
valuable commodities in the world - a resource which
could form the building block for the development of
an imperialist rival to "the West".

The oil industry, as well as being a source of capital,
also produces an important resource. While "America"
is certainly not dependent upon imports of it from the
Middle East, large parts of the world, included Europe
and Japan, are, and thus the more power Washington
has in the Middle East the more influence it has over
these potential rivals. Thus in the second two cases
the American state is representing the interests of not
just oil corporations, but the overall interests of the
corporate elite. Furthermore, while today there is no
American reliance on Middle Eastern oil, in the future
this may be radically different; the US Department of
Energy recently announced that by 2025 70% of the
oil consumed in the US will be imported. It could be
argued that this would place the US at a strategic
disadvantage, there is of course a way around this,
not to mention the slightly more pressing problem of
global warming, and the rise in asthma due to exhaust
fumes - the development of sustainable transport
alternatives to the petrol driven motor car. But I
wouldn't hold my breath waiting for that from a
government of ex-oil executives whose election
campaign was funded by big oil.

(1) The Looming war isn't about Chemical
Warheads...Robert Fisk Jan 18/03

(2)Michael Renner: Worldwatch Institute 01/03

The USA's Earnings From The Oil Trade

In 1992, the US control of the world's oil economy
brought in revenue of $4500 billion a year. This was
simply a charge for using dollars to trade. Any
country wanting to buy or sell oil did so in dollars.
These had to be purchased from US banks, and the
banks being businesses charged them for the
privilege. This "commission charge" helps the US
finance its huge balance of trade deficit year on year.
The emergence of any alternative currency is a threat
to this nice little earner. So, the emergence of the
Euro as a potential trading currency adds another
imperative for the US to wage this war now. It also
helps explain the opposition of France and Germany
to the war.



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