Global Policy Forum

By Michael Renner

The Gulf region accounts for 30 percent of global oil production but has about 65 percent of the world's known reserves. It is the only region able to satisfy any substantial rise in world oil demand, an increase that U.S. energy officials say is inevitable. Saudi Arabia, with 262 billion barrels, has a quarter of the world's total oil reserves and is the single largest producer. But Iraq, despite its pariah status for the past 12 years, remains a key prize. At 112 billion barrels, its known reserves are second only to Saudi Arabia's. Given that substantial portions of Iraqi territory have not been fully explored, there is a good chance that actual reserves are far larger.

For half a century, the United States has made big investments to keep the Gulf region in its geopolitical orbit and maintain America's claim on a preponderant share of the world's oil. Investments have included direct and indirect intervention, massive arms transfers to allies and the acquisition of military bases.

The result has been shifting alliances and repeated conflict. In Washington's calculus, securing oil supplies has consistently trumped the pursuit of human rights and democracy.

This priority is unchanged now that the Bush administration prepares for a more openly imperial role in the region by perhaps invading Iraq on the pretext of eliminating weapons of mass destruction and establishing democracy.

There is no evidence that Saddam Hussein's regime was in any way linked to the terrorist attacks on the United States of Sept. 11, 2001. But those attacks created a far more belligerent, unilateralist mood in Washington and set the stage for the Bush doctrine of preemptive war.

Installing a U.S. client regime in Baghdad would give U.S. and British oil companies a good shot at direct access to Iraqi oil for the first time in 30 years - a windfall worth hundreds of billions of dollars. If a new Iraqi regime rolls out the red carpet for the oil multinationals to return, it is possible that a broader wave of denationalization could sweep through the world's oil industry, reversing the historic changes of the early 1970s.

Rival oil interests were a crucial behind-the-scenes factor as the permanent members of the UN Security Council jockeyed over the wording of a resolution intended to set the parameters for any action against Iraq.

The French oil company TotalFinaElf has cultivated a special relationship with Iraq since the early 1970s. Along with Russian and Chinese companies, it has for years positioned itself to develop additional oil fields once United Nations sanctions are lifted.

But there were thinly veiled threats that these firms would be excluded from any future oil concessions in Iraq unless Paris, Moscow and Beijing supported the Bush policy of regime change. While wanting to constrain U.S. power, France, Russia and China are eager to keep their options open in the event that a pro-U.S. regime is installed in Baghdad.

In November, the Security Council adopted Resolution 1441. It is likely that backroom understandings among the council's major powers about the future of Iraqi oil were part of the political minuet that finally led to unanimous adoption of the resolution.

The stakes in this maneuvering involve much more than the future of Iraq.

The Bush energy policy is predicated on growing consumption of oil, preferably cheap oil. Just last week the Department of Energy warned that America would have to increase its oil imports sharply in the next 25 years to meet rising domestic demand. It said net U.S. oil imports could account for as much as 70 percent of total domestic demand by 2025, up from 55 percent in 2001. U.S. oil deposits are increasingly depleted, and many other non-OPEC oil fields are beginning to run dry. The bulk of future supplies will have to come from the Gulf region.

The Iraqi oil industry is a mere shadow of its former self, run down by years of sanctions. Once the facilities are rehabilitated and additional war damage is repaired, the spigots could be opened wide. Controlling Iraqi oil would allow the United States to reduce Saudi influence over oil policy. Since the Sept. 11 attacks, rifts between Washington and Riyadh have appeared and they may well widen, given that Saudi Arabia's population, reeling from economic crisis, is increasingly restive.

The United States would also gain enormous leverage over the world oil market, fatally weaken OPEC and limit the influence of other suppliers such as Russia, Mexico and Venezuela.

The Bush administration's Iraq policy aims to reinforce the world economy's reliance on oil and on an energy system whose guarantor is the United States.

The writer is a senior researcher at the Worldwatch Institute in Washington.