Did the US really steal Iraq's Oil?

[WildCat]

So, have the reparations in oil paid for the war?

There's reparations being paid to Kuwait for the 1991 war.

 

[BStrong]

As one who was deployed over there, I can at least confirm that in my when and where over there, nowhere did I see anyone stuffing gobs of oil in backpacks and trouser pockets.

The hand is quicker than the eye - me and my guys cleared the joint out in '04.

 

[WildCat]

Donald Rumsfeld and Paul Wolfowitz are "Dem Congresscritters"?

That was to rerconstruct Iraq, not pay for US involvement. And certainly Iraq is using much of its money building infrastructure, though the USA also kicked in a huge amount.

 

[BenBurch]

It was GOP who floated that malarky, WC.

 

[Praktik]

I see this claim tossed around a lot, but what actual evidence is there that the US stole Iraq's oil?

Looking at the figures, the US imports less Iraqi oil now than it did prior to the 2003 invasion, nearly 50% less. Only in 2004 and 2008 did it even come close to the levels it was importing from 1999-2001.

Not only that but I have seen no evidence that the US doesn't pay for the Iraqi Oil it does import.

So did they really steal Iraqi Oil? What evidence of the claim is there or is it just a nice slogan for the anti-US crowd with no real basis in reality?

There are a few errors at play in these discusions:

#1) That you can place a singular motivation at the center of a nation state's decision to go to war

#2) That the strategic importance of Iraq's oil is commensurate with America's specific demand for that resource for it's own consumption

Taking these in reverse order, America's interest in Iraq's oil is not because it wants the oil to buy for itself, nor is it interested in Iraq's oil in any particular way - the fact is that America is interested in ensuring the Middle East, in general, remains sufficiently predisposed to its geostrategic interests which would mean that oil flows not just to the United States, but to US allies. It means not that middle east oil is SOLD to the US, or makes up X% of its imports, but that the oil flow is done in such a way that is commensurate with a fertile ground for US oil producers to compete in, hopefully with a leg or two up from helpful client states and the odd bit of diplomatic cajoling here or there. On the other side of the equation America has also had an interest in preventing rivals from achieving that happy state of ME hegemony it hopes to enjoy for itself.

Overall the middle east is a "stupendous prize" for geostrategic power, not so much for America's interest in the oil, but for everybody else's interest in it. This is why the talk of "energy independence" is a bit of a mirage of a false-dawn: it's not gonna happen quickly and even if it does, as long as everybody else wants ME oil then there will be strategic advantage to having influence over that gateway. In this context even a 100% energy independent America would have the geostrategic incentive to remain enmeshed in the region.

Recall that the idea wasn't really just to remove Saddam, this was always conceived of as the first step in an overall regional makeover that America could leverage in a broader, longer term strategy to entrench its influence there more meaningfully. The toppling of Saddam was going to start a kind of reverse-domino effect (to flip the cold war understanding of the term to a "friendly" domino) that would see intransigent states turn to western-friendly ones as part of a kind of regional makeover.

It is for these reasons that discussions of the exact % of oil flowing from Iraq to America are irrelevant because they are missing the strategic forest for the trees.

Finally, even if we were to modify our understanding and add this geostrategic view of the importance of ME oil reserves and Iraq's part of that to our calculations, America did not go to war in Iraq ONLY for this obvious geostrategic benefit it thought would accrue, other reasons include:

• A need to be seen "reacting" to 9/11, driven both by domestic politics and the feeling that America must "do something" or else be seen as passive and therefore invite more attacks. More crassly, one could formulate this as the "revenge motivation" (though this is ironic given Iraq's lack of connection to 9/11, it certainly was in the American psychology of the time).
• The need to use all the awesome toys the MIC keeps coming up with
• Actual, though now proven silly, fears about Saddam's threat level. While the lie here is obvious now it is a mistake to assume that pro-Iraq war officials and politicians lied consciously - in fact I would bet that nearly all of them truly believed this... (what is the road to hell paved with again??). I grant that others might have but I bet even these likely lied in an Ollie North kind of way "this is the best thing for America and therefore ends justify the means".
• Saddam's relative power: for all the talk of his potential "threat", its funny that his relative weakness made him an excellent target - but clearly the war was enabled by the fact America could quickly win (what happened after would be the easy part, right??)
• The Bogeyman Effect: luckily Saddam was a very odious man so there was a lot of genuine concern for the Iraqi people that was leveraged to buy support for the war - and I don't doubt that this was a very real feeling especially amongst decision makers who would have all the incentives in the world to think of themselves as heroically battling against a demon and to cast America's role in such a Manichaean way. Very easy to slip into this kind of thinking...

Any nation going to war will always be doing so because the mix of elements is conducive to it. There may be a historical example of a leader or government who went to war for only ONE reason, but I bet even that historical anomaly (if it exists) would have a serious domestic stakeholder who had a different interest and whose buy-in was critical to smoothing the path to war.

People who jingoistically invoke "war for oil" are simplifying the real motivations around oil in the Middle East. Opponents then argue against that simplistic claim and can then offer stats like the % of oil from Iraq in America's imports as rebuttal - fact is they are both arguing around an error and might as well be arguing about how many angels can dance on the head of a pin for all the value in such discussions. Then underneath it all both sides often imply that a singular motivation can explain the war when it is really hard to even conceive of a situation in history where that might have ever been true.

 

[PhantomWolf]

STRATEGIC ENERGY POLICY CHALLENGES FOR THE 21ST CENTURY
Commissioned by Dick Cheney in April 2001
Guess what the 'other means' turned out to be?

But it wasn't stealing. Oh no. We paid market rates!

Bully: Hey dude, that's a nice jacket you got there. Sell it to me for a dollar!

Victim: Er, I don't think so - it's worth more to me than tha...

Bully: <BOOT>

Victim: <doubles over in pain, drops jacket>

Bully: Thanks for the jacket dude, here's your dollar (might help to pay your medical bills, hah hah!).

...and all the oil companies lived happily ever after.

The funny thing is that your interpretation of the quote is in exact opposition to what could have been done to achieve the goal, and what actually happened.

In fact the US was buying MORE oil from Iraq prior to the war and had they wanted even more, could have just lifted the sanctions. At the time oil was $20 a barrel. They now buy less, at around 5x the price.

far from...

quickly add[ing] capacity to world oil markets and inject[ing] a more competitive tenor to oil trade.

it caused a spike in oil prices that hasn't receeded anywhere near pre-2003 prices.

You analogy should be...

Customer: Hey dude, those a nice jackets you're selling there, how much you selling them for?

Shop-keeper: They are currently $20 each.

Customer: Okay I'll take ten, here's $200.

Customer: Hey didn't you once try and kill my Dad? <Boots Shop-Keeper through Front Window>

Shop-keeper: <Lands, picks himself up in pain, shuffles off, and is replaced by new shop-keeper>

Customer: Well that's taken care of, now how much do you sell those nice jackets you're selling for?

Shop-keeper: Well since you beat on the last guy and threw him out the window, everyone in the neighbourhood raised their prices to $100 a jacket.

Customer: Fine I'll take five, here's $500, and I'll throw in another $1,000 so you can fix that window I just broke.

 

[Skeptic Ginger]

The narrative, no one stole Iraqi oil, is a tad more complex than that.

Who Really Owns the Oil Companies?

As it turns out, oil and gas companies, like most large American corporations, are not owned by a few wealthy individuals. Instead, they are owned by millions of ordinary Americans and foreigners, often through their retirement savings. Contrary to popular belief, only about one percent of the shares of the five major oil companies are held by officers and directors of these companies. The rest is held by institutional investors and individual Americans, mostly in retirement accounts.

The real questions should be:

• How many Iraqi citizens own stock in those companies?
• How much capital taken out of the country in the form of oil reserves has been/will be returned to be used within the country?
• And what did these proportions look like before and after the US invaded?

 

[bruto]

You mean to say that there was a difference between intentions and results in Iraq? I'm shocked, shocked I tell you!

 

[WildCat]

The narrative, no one stole Iraqi oil, is a tad more complex than that.

Who Really Owns the Oil Companies?








The real questions should be:

• How many Iraqi citizens own stock in those companies?

Why does it matter?

How much capital taken out of the country in the form of oil reserves has been/will be returned to be used within the country?

Iraq sold the rights to the highest bidder, ddin't they? What they do with the money is their own business. And nobody forced them to sell the oil rights, they figured that was their best option. Apparently Iraqi companies don't have the expertise and the capital to exploit their oil resources.

And what did these proportions look like before and after the US invaded?

Again, why is this even relevant?

And that's not even getting into how US oil companies didn't even win the oil auctions.

 

[PhantomWolf]

Currently the contracts are:

Majnoon oil field - Shell (Dutch), Petronas (Malaysian)
Halfaya Field - CNPC (Chinese), Total S.A (French), Petronas (Malaysian)
West Qurna Field Phase I - ExxonMobil (US), Shell (Dutch)
West Qurna Field Phase II - Lukoil (Russian), SOMO (Iraqi)
Rumaila oil field - BP (British), CNPC (Chinese), SOMO (Iraqi)

Just one US contract among them, and they get paid $0.95 a barrel (based on a 50/50 split with Shell) while the current price is around $100 a barrel. ExxonMobil is also doing project work that will provide the Iraqi oil industry water for well injection.

 

[Skeptic Ginger]

Why does it matter?


Iraq sold the rights to the highest bidder, ddin't they? What they do with the money is their own business. And nobody forced them to sell the oil rights, they figured that was their best option. Apparently Iraqi companies don't have the expertise and the capital to exploit their oil resources.

So no oil was being pumped when Saddam was in power?

As for Iraq sold the rights? Are you serious? The government we helped install sold the rights, not the Iraqi people.

If you would just get off your high horse for a short time and actually look into what happened with the Iraqi oil contracts after Bush/Cheney invaded the country, you might actually learn something about how this kind of corporate corruption works.

Let's start with Saddam pissing Bush off before we invaded, he probably shouldn't have done that.

April 2002 Iraq halts oil shipments

Iraq exports about 1.5 million barrels of oil a day, nearly a million of which go to the United States.

Imagine that, even after the WTC attack, and after all the sanctions because of Saddam's not cooperating or whatever, we were getting a million barrels a day from Iraq. Can't have that, Iraq actually had Bush over a barrel. How dare the Iraqi's act like they own their own oil.

And look at that, in 1978, Iraq produced more oil than they do now. Guess they didn't need us after all.


As for just how those Iraqis felt about the contracts for 'their' oil:

Iraq oil law (2007)

The Iraqi oil industry had been completely nationalized by 1972.[3][4] The government in the 1990s, under the presidency of Saddam Hussein, gave production share agreements (PSAs) to Russian and Chinese companies which gave a profit percentage of less than 10 percent.[3]

The Bush administration hired the consulting firm BearingPoint to help write the law in 2004.[5][6] The bill was approved by the Iraqi cabinet in February 2007.[7] The Bush administration considers the passage of the law a benchmark for the government of Prime Minister Nuri Kamal al-Maliki.[8][9] One stumbling block was the unpopularity of the law, as it is perceived by the Iraqi people. An opinion poll conducted in 2007 by Oil Change International and other groups shows 63% of Iraqis surveyed would "prefer Iraq's oil to be developed and produced by Iraqi state-owned companies [than] by foreign companies". This explains why the law had stalled in the Iraqi parliament.[10]

[edit]Profit sharing

The new law authorizes production share agreements (PSAs) which guarantees a profit for foreign oil companies.[3]

The central government distributes remaining oil revenues throughout the nation on a per capita basis.[11] The draft law allows Iraq's provinces freedom from the central government in giving exploration and production contracts.[3] Iraq's constitution allows governorates to form a semi-independent regions, fully controlling their own natural resources.[3]

[edit]Criticism of the new law

Some critics have claimed that the new Iraqi Oil law was not needed since Iraq has the cheapest oil to extract.[12] Also Iraq's oil refineries did not maintain any heavy damages during the Iraq war so the country is not in need for any serious development at the time. Other analysts have claimed that the no-bid contracts to U.S oil companies constitutes as exploitation since many non U.S companies would give the same service for shorter contracts and lower percentage of revenue.[13]

It was all very corrupt. Many Iraqis in the Parliament held up the approval of the Constitution because of the oil contract giveaway. In the end, the US ran the show.

 

[WildCat]

So no oil was being pumped when Saddam was in power?

Yes, what is your point?

As for Iraq sold the rights? Are you serious? The government we helped install sold the rights, not the Iraqi people.

The Iraqi people elected their governemnt.

There's very good reasons to have private companies drilling for oil, mainly because they do it for non-political reasons. Venezuela nationalized their oil production, and siphoned off the money away from basic maintenance and infrastructure for bread and circuses. The end result is their oil production has fallen sharply, accidents have increased, and revenue has fallen. Mexico's national oil company is also a disaster, rife with cronyism and corruption and inability to maintain the infrastructure in peak condition. And do we even need to talk about Russia and Gazprom? A lot of that money ends up not being used by the people of Russia, but in politician's and their cronies Swiss and Cypriot bank accounts. About the only country that has managed it well is Norway, and Iraq sure as hell isn't Norway.

The bottom line is Iraq gets more money by selling oil rights to the highest bidder than they do by letting corrupt pols and their cronies handle it.

 

[PhantomWolf]

So no oil was being pumped when Saddam was in power?

Did you miss the fact the US was getting more Iraqi Oil before the Invasion that after it?

As for Iraq sold the rights? Are you serious? The government we helped install sold the rights, not the Iraqi people.

Funny thing, Governments are representatives of the people. True it doesn't mean that they do what the people want, but regardles, they are the people reps. The contracts were sold in 2009, that was after free elections in Iraq.

If you would just get off your high horse for a short time and actually look into what happened with the Iraqi oil contracts after Bush/Cheney invaded the country, you might actually learn something about how this kind of corporate corruption works.

I did look, the US didn't get very much, and in fact no companies are making huge percentages. Most of the contracts are in the $1.50-$2.00 range per barrel. The barrels are sold at around $100 each currently, that means that the companies are getting around 2% and the Iraqi Government is getting 98%, more in some cases because 3 of the 5 fields have the Iraqi State Oil as either a partner or exclusive access. Only one field has a US company, who is getting $0.95 a barrel.

Let's start with Saddam pissing Bush off before we invaded, he probably shouldn't have done that.

April 2002 Iraq halts oil shipments Imagine that, even after the WTC attack, and after all the sanctions because of Saddam's not cooperating or whatever, we were getting a million barrels a day from Iraq. Can't have that, Iraq actually had Bush over a barrel. How dare the Iraqi's act like they own their own oil.

Seriously? You think that Bush invaded over a "possible" hike to $30 a barrel, a hike that OPEC stated they would prevent by openning their own taps up to keep the price down. With the war prices spiked to over $200 a barrel!

And look at that, in 1978, Iraq produced more oil than they do now. Guess they didn't need us after all.

I don't really know what your point here is. If the US had been interested in oil prices, then all they had to do was lift sanctions. Even is Saddam hadn't sold to them, selling elsewhere would take pressure off other sources and lower the price anyway.

As for just how those Iraqis felt about the contracts for 'their' oil:

Iraq oil law (2007)It was all very corrupt. Many Iraqis in the Parliament held up the approval of the Constitution because of the oil contract giveaway. In the end, the US ran the show.

And strange that the US with their supposed running of the show and non-bid contracts ended up missing out on all but one contract which they share with the Dutch.

 

[angrysoba]

You analogy should be...

Customer: Hey dude, those a nice jackets you're selling there, how much you selling them for?

Shop-keeper: They are currently $20 each.

Customer: Okay I'll take ten, here's $200.

Customer: Hey didn't you once try and kill my Dad? <Boots Shop-Keeper through Front Window>

Shop-keeper: <Lands, picks himself up in pain, shuffles off, and is replaced by new shop-keeper>

Customer: Well that's taken care of, now how much do you sell those nice jackets you're selling for?

Shop-keeper: Well since you beat on the last guy and threw him out the window, everyone in the neighbourhood raised their prices to $100 a jacket.

Customer: Fine I'll take five, here's $500, and I'll throw in another $1,000 so you can fix that window I just broke.

That customer sure is one cool dude!

 

[Roger Ramjets]

But Roger,Iraq was already selling it's oil on the world market, and did all through the embargo.

Iraq was selling oil to Europe and Russia. But that wasn't the problem. Saddam wanted to change the 'oil' currency from US dollars to Euros, and that was a big problem for US companies.

It doesn't matter whther they sell to use or the Chinese, it's a fungible commodity- the more ANYBODY sells, the better for us.

Nice theory. Problem is the 'us' that we are part of is different from the 'us' that global oil companies are part of. They don't care whether something's better for us, so long as it is more profitable for them.

Having a rogue producer upsetting the applecart and getting in the way of your 'arrangements' is not good for business. And with the full military might of the World's most powerful nation at your fingertips, why hold back? Sure, full scale war will be an enormous strain on the country and might precipitate economic collapse. Sure, a staggering number of people will probably be hurt or killed. But that's not important when you have a chance to be rich!

A few might see through the propaganda and ask why they should be paying in blood and treasure for the benefit of your oil company, but you have an answer to that. Just tell them that 'oil is fungible' and everybody's paying the same price, so you couldn't possibly be getting any pecuniary advantage.

Since Iraq I, no country has attacked another country ANYWHERE.

So Iraq I was the last time any country attacked any other country anywhere? And that's your argument for why it was a good war? WWI was called the "War to End All Wars". How well did that turn out?

You mean to say that there was a difference between intentions and results in Iraq? I'm shocked, shocked I tell you!

Don't be silly, everything turned out exactly how we intended!

All the fighting was over in a week and the Iraqi people welcomed us with open arms. Alarmist fears that we would would be embroiled in sectarian violence and a bloody occupation that might last 10 years were completely unfounded.

Upon liberating Baghdad we made it a priority to secure public works and prevent looting of museums and power stations etc. Protecting oil fields was unnecessary (not that we were interested in them anyway) since we had already captured/killed all the bad guys and everybody loved us.

We quickly crushed the Al-Qaeda terrorist network that Saddam was funding, saving Iraqis from a decade of fear and making their country much safer to live in. Huge caches of WMD's were found, including a well advanced secret nuclear weapons program proving that Saddam really was only 20 minutes away from being able to nuke the US!

A new government was quickly formed which had overwhelming support from the Iraqi people, and the US received universal praise for introducing a shining beacon of democracy to the middle-east. The country willingly adopted a free-market economy with no regulations - which was a huge success, proving that Libertarianism works. This allowed US companies to work in harmony with Iraqis to make everybody rich, safe and happy!

If that's what we intended, then it must be what happened! Or if it actually turned out differently, we must have intended that instead!

 

[a_unique_person]

I see this claim tossed around a lot, but what actual evidence is there that the US stole Iraq's oil?

Looking at the figures, the US imports less Iraqi oil now than it did prior to the 2003 invasion, nearly 50% less. Only in 2004 and 2008 did it even come close to the levels it was importing from 1999-2001.

Not only that but I have seen no evidence that the US doesn't pay for the Iraqi Oil it does import.

So did they really steal Iraqi Oil? What evidence of the claim is there or is it just a nice slogan for the anti-US crowd with no real basis in reality?

I don't know if it was for the oil, but it wasn't for the WMD. If you are going to tell a lie that big, that everyone knew was a lie from the start, you do open yourself up to alternative explanations. As it is, coal seam gas has relieved US demand for energy for a few more years.

 

[Praktik]

But that doesn't matter. US can be energy independent, getting absolutely nothing imported from Iraq, yet still have the strategic interest to have favourable conditions in the ME suited to American geopolitical interests and to the competition of its oil industry. ME oil is not about America's particular demand, but everybody else's demand for it. There is still huge strategic value for big players to jockey over this strategic chokepoint for a critical resource.

America would be in the ME even if it had a fusion reactor that took care of all its domestic energy needs. This is the lie behind "energy independence", which is crafted more for domestic political reasons to help smooth the path to more exploration at home - not for any real strategic gain, cause there is none to be had that compares to the gain of being an important player in the ME - but rather more for the balance sheets of domestic oil and energy producers.

But carry on arguing about what % of America's oil imports are Iraqi - then tell us how many angels can dance on the head of a pin once you sorted that one out... There's about the same value in both discussions...

 

[Natan]

The bottom line is Iraq gets more money by selling oil rights to the highest bidder than they do by letting corrupt pols and their cronies handle it.

I'm sure Iraq is not letting corrupt pols and their cronies handle their oil. Anyway, while I do not believe that the US is stealing/has stolen Iraq's oil, it sure is beneficial if a few of those billions of dollars Iraq is now spending on military equipment (for what?) and training is ending up at US military contractors.

 

[WildCat]

Iraq was selling oil to Europe and Russia. But that wasn't the problem. Saddam wanted to change the 'oil' currency from US dollars to Euros, and that was a big problem for US companies.

Why don't you start a thread about it in Conspiracy theories where such nonsense belongs?

 

[WildCat]

But that doesn't matter. US can be energy independent, getting absolutely nothing imported from Iraq, yet still have the strategic interest to have favourable conditions in the ME suited to American geopolitical interests and to the competition of its oil industry. ME oil is not about America's particular demand, but everybody else's demand for it. There is still huge strategic value for big players to jockey over this strategic chokepoint for a critical resource.

America would be in the ME even if it had a fusion reactor that took care of all its domestic energy needs. This is the lie behind "energy independence", which is crafted more for domestic political reasons to help smooth the path to more exploration at home - not for any real strategic gain, cause there is none to be had that compares to the gain of being an important player in the ME - but rather more for the balance sheets of domestic oil and energy producers.

But carry on arguing about what % of America's oil imports are Iraqi - then tell us how many angels can dance on the head of a pin once you sorted that one out... There's about the same value in both discussions...

Wouldn't all of that had been better served by propping up Saddam and lifting the sanctions?