A History of US Intrigue over Iraq’s Oil

September 2nd, 2003 - by admin

by Ahmad Quni / Al Jazeera –


(August 10, 2003) — US policy towards Iraq has always been shaped by the country’s rich oil resources, its strategic location on the Gulf and its regional weight. Iraq ranks only second to Saudi Arabia for its oil resources, and was the world’s second largest oil exporter before the Iraq-Iran war broke out in 1980.

The US has always been a key importer of Iraqi oil. Even under the UN sanctions, US companies imported some 750,000 barrels per day (bpd) from Iraq until the end of 2002.

Based on current estimates, Iraq’s oil reserves stand at about 115 billion barrels, equivalent to the total oil reserves of the US, Canada, Mexico, Western Europe, Australia, New Zealand, China and the whole of Asia.

Now that the US has succeeded in ousting President Saddam Hussein, Iraqi oil is set to start flowing once again. US occupation administration hopes that Iraq would soon be able to export about 600-700,000 barrels a day, mostly to the US, in addition to 300-400,000 barrels produced for domestic consumption.

Exports could be back to the pre-war level of 2.5 million barrels a day, say US occupation officials. According to plans designed by the occupying powers, Iraqi oil revenues will be channeled into a trust fund controlled by the US and the UK.

Roots of Ambitions
The roots of US ambitions in Iraq go back to the aftermath of World War I (WWI) which put an end to Turkish presence in the region. Then the Sykes-Picot agreement, signed by the British and the French, re-carved the Middle East creating new entities ruled either directly by the colonialist powers or by puppet regimes. Despite the underlying differences, Britain and France agreed to divide the Fertile Crescent encompassing Iraq, Syria, Palestine, Lebanon and Jordan, between them as areas of influence.

France got Lebanon and Syria, while Palestine, Jordan, and the two southern provinces of Iraq-Baghdad and al-Basra went to Britain. However, the status of the province of Mosul, an integral part of Iraq for thousands of years, remained unresolved.

Though it was part of the French sphere of influence, as agreed, the British were determined to keep Mosul within their new Iraq colony. Immediately after Turkey was defeated, the British army occupied Mosul and the imperialist struggle between Britain and France over Mosul heralded the beginnings of US ambitions in Iraq.

The apparent cause of rivalry between Britain and France, and at a later stage the US, over Mosul was its known but largely undeveloped oil resources.

Though its effort in WWI was very limited, the US, emerging as a super power, was keen to ensure that its economic and political interests were taken into account in the post-war world of the Middle East, as it came to be called by the imperialist powers. Oil was at the top of these concerns as the importance of the Gulf Region was mounting in view of its huge oil reserves.

Open-door Policy
Faced with the British and French domination over the region’s huge resources, the US at first demanded an “open door” policy allowing US companies to freely negotiate oil contracts with the puppet monarchy of King Faisal whom the British had installed in Iraq.

In 1927, major oil explorations were undertaken and huge oil deposits were discovered in the Mosul province, which fuelled the rivalry among competing colonialist oil companies even further.

However, a settlement was arranged and Iraqi oil was divided up into five portions, 23.75% for each of several companies from Britain, France, Holland and the United States. The Iraqi people were left with virtually nothing of their oil wealth, and this unfair situation continued until 1958 when the Hashemite monarchy was toppled in a military coup.

The Iraqi petroleum company, shared by British Petroleum, Shell, Mobil and Standard Oil of New Jersey (Exxon) was established. Within a few years, this company had a total monopoly of Iraqi oil production. Yet, the US oil companies and their government in Washington, were not satisfied since their target was to achieve complete control of the Middle East oil by displacing the British.

Growing US Role
Following the end of WWI, the British Empire was greatly weakened by the war in which it lost key colonies in Asia. On the other hand, the US grew increasingly powerful throughout the world.

The administrations of Presidents Franklin Roosevelt and Harry Truman dominated by big banking, oil and other corporate interests, were determined to restructure the post-war world to ensure US domination. Thus, one of the key elements of the US domination strategy was aimed at controlling global resources, particularly oil.

Within this context, the US threw its full weight behind the Shah of Iran who was one of its closest allies in the region. By mid 1950, US influence in Iraq was almost as powerful as that of Britain which was the actual colonising force on the ground.

In 1955, the Baghdad Pact, including in addition to Iraq Turkey, Pakistan, Iran and the UK was set up to counter the rise of Arab and other liberation movements in the Middle East and Asia.

The 1958 Revolution
By July 1958, a military coup overthrew the Iraqi monarchy, a development that the US regarded as detrimental to its vital interests and immediately landed 20,000 marines in Lebanon in the context of what was known as the “Eisenhower doctrine.” In accordance with that doctrine, the US would intervene directly and even go to war to protect its interests in the Middle East.

The Eisenhower administration then considered the idea of invading Iraq, to overturn the new regime and to install a new puppet government in Iraq. But the US was forced to abandon that plan due to several regional and international factors including the support given by China and the Soviet Union to the revolutionary government in Iraq.

The US however, never stopped targeting Iraq as one of its adversaries in the region and rendered unlimited support to the rebel right-wing Kurdish insurgency in the north of the country.

In the eighties, when the US lost its main ally in Iran, its relations with the Saddam regime in Baghdad thawed to a considerable extent and it even supported Iraq in its war with Iran. However that honeymoon ended when Iraq invaded Kuwait in 1990 and the US hurried to protect and preserve its interests in the oil-rich region.