Uncle Alan: Oil, Oh No I Didn't Mean the War Was An Oil Grab!

Alan Greenspan backpedals from his statement that the war was about oil:

Greenspan, who was the country’s top voice on monetary policy at the time Bush decided to go to war in Iraq, has refrained from extensive public comment on it until now, but he made the striking comment in a new memoir out today that “the Iraq War is largely about oil.” In the interview, he clarified that sentence in his 531-page book, saying that while securing global oil supplies was “not the administration’s motive,” he had presented the White House with the case for why removing Hussein was important for the global economy.

Go to the link to watch Greenspan spinning furiously backwards. Guess he got some phone calls. Iraq would not have been invaded if it didn’t have oil. Here’s the deal – while oil prices were still relatively low when the invasion happened, supplies were tightening. The only easily accessible cheap light sweet crude available in large amounts which wasn’t already being pumped was in Iraq. The problem was that if you removed the sanctions without removing Saddam, the feeling was he’d spend the money in ways that were unacceptable. But sanctions were already cracking and so was the consensus for sanctions. So, under that view of the world, Saddam had to go.

Unfortunately for the Bush administration they were too incompetent to even get oil out of Iraq. But while certainly the war was about more than oil — many different constituencies wanted many different things out of the war, which was one of the reasons it was prosecuted so badly — anyone who says it had nothing to do with oil needs to answer this question: “If Iraq had no oil, would it have been invaded?”

It’s very hard to argue the answer is anything but no, and thus Greenspan’s original assertion is basically correct. The Iraq war was about oil. Not only about oil, but oil was a big deal — which is why the oil ministry got protected when the US conquered Baghdad, and nothing else; including munitions depots that were prime suspects for the WMD that was the supposed causus belli, which didn’t.

For a humourous ending let’s go back to Uncle Alan contradicting himself:

Greenspan said disruption of even 3 to 4 million barrels a day could translate into oil prices as high as $120 a barrel — far above even the recent highs of $80 set last week — and the loss of anything more would mean “chaos” to the global economy.

Given that, “I’m saying taking Saddam out was essential,” he said. But he added that he was not implying that the war was an oil grab.

“No, no, no,” he said. Getting rid of Hussein achieved the purpose of “making certain that the existing system [of oil markets] continues to work, frankly, until we find other [energy supplies], which ultimately we will.”

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Ian Welsh

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  • “…which is why the oil ministry got protected when the US conquered Baghdad, and nothing else;”
    Well, one other….
    “The Americans have, though, put hundreds of troops inside two Iraqi ministries that remain untouched – and untouchable – because tanks and armoured personnel carriers and Humvees have been placed inside and outside both institutions. And which ministries proved to be so important for the Americans? Why, the Ministry of Interior, of course – with its vast wealth of intelligence information on Iraq – and the Ministry of Oil. The archives and files of Iraq’s most valuable asset – its oilfields and, even more important, its massive reserves – are safe and sound, sealed off from the mobs and looters, and safe to be shared, as Washington almost certainly intends, with American oil companies.”
    Thank Ian, great post!

  • that it’s absurd to say the war was about oil. That it all goes into one pipe and that we pay the world price, no matter what.

    Wrong George.

    Remember the embargo? Empty gas pumps, long lines?

    The past isn’t always a model for the future. Simply put, we are approaching a time when there won’t be enough oil to go around and he that controls the spigot, controls the world.

    It wasn’t we that stopped the Germans in WWII. It was a lack of fuel. Tanks, planes and other weapons of war are worthless without it.

    Control of the Middle Eastern oil fields has become a national security issue. Can’t maintain the empire without their oil.

    People that claim otherwise are like those that say they go to titty bars for the food.

    I did inhale.

  • Control of the Middle Eastern oil fields has become a national security issue. Can’t maintain the empire without their oil.

    People that claim otherwise are like those that say they go to titty bars for the food.

    What makes me think there’s an awful lot of overlap between those two groups?

  • it goes into all one pipe, which will eventually change as you note, increase the supply in that one pipe still reduces prices for the US.

  • In a world where tight supply is the norm, even a nominal reduction, that of one major producer, could put the world economy into a tail-spin.

    And diverting oil exports is more difficult than just sending money. Logistics come into play. Why do you think Venezuela still sells us oil? Cerainly not for any love of the US. Getting oil to China is a major hurdle, requiring new ships, refineries etc.

    The movie Syriana dealt with some of this. One Saudi prince, (successor to the throne) wanted to make a deal with China for a better price and ate a hell-fire missle, while the other brother decided he would rather stay alive and be rich personally, even if it wasn’t in his nation’s best interest.

    If Peak oil theorists are right and I have reason to believe they are, we are now on a world-wide production plateau. It’s not that the world is running out of oil, it’s that the amount of oil being produced per day is as high as it’s going to get. New discoveries serve only to make up for depletion losses on older fields. Demand has maintained pace with supply, but demand will soon outstrip supply. But you can’t consume something that isn’t produced.

    So competition for oil will soon be fierce. We’ve been buying oil with what may turn out to be worthless paper (dollars).

    That’s where guns come into play.

    Another thing. Somewhere around 85% of the world’s oil reserves are now controlled by state-owned companies. Private oil companies (big oil, we call them) actually are minor players. Exxon is the world’s largest private oil company but comes in 9th on the reserves list.

    Iraq is the one place left on the planet (that we know of) that these private companies have a chance of securing large reserves of good quality oil.

    I did inhale.

  • I’m sorry but I haven’t read the conspiracy theory that suggests this, but it sure seems plausible. Drive out Saddam, mess up production, yet secure one of the world’s largest stashes of great oil.

    I know, I know. It’s kind of *expensive* to do this, but Bush never managed a business well, did he?

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