Fuel play
There are, writes
Medhat El-Zahed* finds that oil, once again, is at the eye of the storm
The Gulf is approaching its third oil- powered war in just over two decades. First, there was the Iran-Iraq War (1979- 87), then the Gulf War (1990-91), with its ensuing saga of sanctions and intimidation, and now the US is meticulously planning a massive offensive against Iraq. Oil is the code word for all these wars.
The Gulf region contains two-thirds of world oil reserves, with Iraq (home to 11 per cent) and Saudi Arabia (possessing 25 per cent) being the world's top owners of the precious fuel. This is the key motive for US policies in the region. US strategists are aware that the international reserves of most major countries will run out within this, or at most the next decade. The Gulf oil, in contrast, is likely to last for another seven.
There is no alternative to Gulf oil, despite all the talk about Caspian Sea reserves, with the latter estimated at a meagre four per cent of world reserves, and they are subject to ownership rivalry among the five Caspian littoral states. The commercial use of Caspian Sea oil also hinged upon the completion of pipelines passing through turbulent regions. Hence the Afghanistan war, but even the new political arrangements in the area do not provide enough of a solution to the oil problems of the United States.
US oil reserves are estimated at 21 billion barrels. Americans consume 17 million barrels per day, of which 11 million are imported. The US is expected to run out of oil within three to four years if it has to depend on its own reserves, and in 10 years if it maintains its current patterns of consumption and importation.
According to US reports, an increase of $1 a barrel in oil world prices would raise US spending on oil imports by $4-6 billion annually. This explains US eagerness to invade Iraq. The US government wants oil prices at $15-18 a barrel, as opposed to OPEC's goal of $28 a barrel. The difference means an annual saving of $42- 50 billion for the US economy. If the United States manages to have its way, Gulf states would be faced with a loss of income amounting to $79 billion a year -- a matter that could undermine their social and political stability. Saudi Arabia's attempts to stabilise oil prices within OPEC has put it on a collision course with Washington, although the Saudis are fully committed to the continued flow of oil at moderate prices -- even in times of crisis.
Tension between Saudi Arabia and the United States over oil has taken a political form. Reports leaked by US intelligence speak of plans to occupy Saudi oil fields and replace the Saudi monarchy with a republic. Families of the victims of 11 September have been encouraged to file lawsuits against Saudi officials. If successful, these lawsuits could be used as an excuse to freeze the assets and perhaps occupy the oil fields of Saudi Arabia.
Obviously, Iraq is the weakest link in this oil-soaked political saga. With the world's second largest reserves, and with the human and technical capabilities to pose a threat to Israel, Iraq is an obvious target. If it comes under US control, Washington is likely to boost Iraq's oil production (currently at one million to two million barrels a day) by a margin of five to tenfold. This accomplished, the United States would be able to cut back its own oil production by three million barrels a day without risking a change in its consumption patterns.
Iraq may not have the weaponry to justify the military campaign against it, but it has oil -- an invaluable asset in any future world rivalry. America's possible rivals (Europe, Japan and China) are likely to face medium-term problems with their oil supplies. If the United States is in control of Gulf oil, it will be in a position to keep the political ambitions of these powerful contenders at bay.
* The writer is a journalist with Al-Ahali newspaper.
