The Spoils of War

Be the First on Your Block to Make a Buck off Iraq

However, it is well known that the majors, reeling from attacks on their environmental policies and with an invidious history of meddling in the third world, need stability to drill oil and protect the billion-dollar-plus investments in pipelines. Lucio Noto, former Exxon Mobil vice chairman, said in a recent interview, "I think in many cases [sanctions] do not achieve the intended objective. In many cases they hurt groups of people we are not intending to hurt. I believe they take us out of the ball game and leave the playing field to other people. And I think if you look at the track record, they have been singularly ineffective."

The prospect of a black-gold rush in Iraq means the United States can exchange oil futures for support for the war. But over the long haul, the war may produce unanticipated consequences for the oil companies—and thus for their native son George W. Bush. Robert Mabro, who heads the Oxford Institute for Energy Studies, a British think tank, argues there is no doubt that a new pro-American Iraqi government will initially seek to maximize the volume of production. "This output-maximization policy, particularly if pursued at a time when the market is oversupplied, could cause prices to collapse" and thus destabilize the region. "Bad seeds sowed now will inevitably produce in the end their poisonous flowers," warns Mabro.

SAUDI ROYALS

There's another potential monkey wrench in the rosy scenario for big business. If there's war, the one man Bush will need is Abdullah bin Abd al-Aziz, crown prince of Saudi Arabia. His kingdom is America's surrogate in the Middle East, providing the U.S. with a secure military base and acting as a stabilizing force within OPEC, absorbing the ups and downs of oil prices. More than anyone else in the royal family, the prince knows how to handle the quarrelsome local tribes—including the Wahhabi, whose religious fundamentalism influences Osama bin Laden and many of his followers—and how to stave off any fundamentalist revolt by doling out jobs in the Saudi National Guard.

But by all reports, al-Aziz is getting tired of being Our Man in Riyadh, taking in billions in oil dollars and then recirculating them back to the United States through defense contracts. He wants a more independent policy.

He also has close dealings with Syria's strongman, President Bashar al Asad, and has been trying to persuade the International Monetary Fund to help modernize Syria's economy with the understanding that Saudi Arabia stands behind any deal. Bush hawks who see Iraq as the starting point for a world war that takes out Syria will run hard up against the Saudis. The Saudis also are financiers of last resort if Lebanon goes down the drain.

Most important, the prince has reached out to Iran with the goal of forging a common oil policy. A report last month from the Petroleum Finance Company—a consulting firm in Washington which works with Aramco, the joint U.S.-Saudi oil company—pointed out that a united Saudi-Iranian oil front would become the heartbeat of OPEC, and would wield extraordinary power. Should either or both of these two nations decide they've had it with Bush, all they have to do is let the much-heralded free market take over, flooding the globe with crude and sending oil prices into a steep dive. Lower prices would wipe out not only smaller international companies that have been enticed into oil play by high prices, but could wipe out the domestic oil companies in the United States, causing sheer political hell for Bush in his little oil bastion of Houston. V


Additional research: Gabrielle Jackson, Rebecca Winsor, and Josh Saltzman

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