Oil, A Major Tool for Domination

The Arms Industry

Oil, A Weapon for World Hegemony & Source for Huge Profits

The United States’ current strategic agenda is of staggering proportions. The US plans a massive expansionist drive around the world (and indeed even in outer space). In this it plans to take full advantage of its overwhelming military supremacy, including hitherto impermissible means, with inevitably terrible effects on the targeted populations. Not only inconvenient regimes but even certain US client regimes (such as Saudi Arabia) may be targeted. These countries are slated for direct rule by the American military, or rule under close and detailed direction by US monitors — encompassing not only foreign policy and economic policy, but political, social and cultural institutions as well. Direct control of oil will pass into American hands. Importantly, this drive is also intended to prevent the emergence of rivals to American worldwide hegemony. Of course, its primary aim is colonial-style exploitation, in order to maximize the loot and widen its captive markets.

Months before George W. Bush assumed office in January 2001; a report was drawn up by a group called Project for the New American Century (PNAC). The driving force behind the group was Richard Perle, a member of the Reagan administration, a member of the board of extreme right-wing think tanks such as the American Enterprise Institute and the Hudson Institute, and currently the head of the Defence Policy Board (now out due to proof of fraud in his business dealings), an advisory group to the Pentagon. Other founders too of the PNAC now occupy leading positions in the Bush administration: Dick Cheney, now vice-president, Donald Rumsfeld, defence secretary, Paul Wolfowitz, deputy defence secretary, I. Lewis Libby, Cheney’s chief of staff, William J. Bennett, Reagan’s education secretary, and Zalmay Khalilzad, American special envoy to Afghanistan and imminently to the "free Iraqi people". (Governor Jeb Bush, George’s younger brother, was also among the founders.) Hence the report reflects the intentions of those now in office.

Titled "Rebuilding America’s Defences: Strategy, Forces and Resources for a New Century", the report spells out "American grand strategy" for "as far into the future as possible". Among its high-lights, as ountlined in the Aspects of India’s Economy Nos. 33 & 34, are the following:

1. The report says, "The United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein." Clearly, the American plan to invade Iraq has nothing to do with Saddam Hussein or any weapons of mass destruction. Invasion of Iraq was on the cards, and Saddam is the excuse. The report adds that "even should Saddam pass from the scene", bases in Saudi Arabia and Kuwait would remain permanently as "Iran may well prove as large a threat to US interests as Iraq has".

2. The US should be able to "fight and decisively win multiple, simultaneous major theatre wars", and increase military spending by $48 billion to ensure this.

3. The US should develop "bunker-buster" nuclear weapons. Whereas till now nuclear weapons were considered strategic weapons — a threat of massive retaliation to deter an attack — the development of such uses for smaller nuclear weapons would make them into tactical weapons, that could be used in the ordinary course of battle, as it were. The US, the report unmistakably implies, "should also develop biological weapons: New methods of attack — electronic, ‘non-lethal’, biological — will be more widely available.... combat likely will take place in new dimensions, in space, cyberspace and perhaps the world of microbes.... advanced forms of biological warfare that can ‘target’ specific genotypes (i.e., kill people selectively based on their race or ethnicity) may transform biological warfare from the realm of terror to a politically useful tool."

4. The US should create "US Space Forces" to dominate space. The ‘star wars’ programme, officially known as National Missile Defence, should be made a priority.

5. The report says that "it is time to increase the presence of American forces in southeast Asia". This may lead to "American and allied power providing the spur to the process of democratisation in China." In other words, the US should strive to replace the present Chinese regime with a clearly pro-American one, and for this South Asia could be used as the launching pad. .

6. Supposedly in order to check regimes such as North Korea, Libya, Syria and Iran the US military should set up a "worldwide command-and-control system".

7. The PNAC supports a "blueprint for maintaining global US pre-eminence, precluding the rise of a great power rival, and shaping the international security order in line with American principles and interests." Thus the document explicitly calls for preventing the "American century" becoming anyone else’s, even if peacefully. Close allies such as the UK are referred to as "the most effective and efficient means of exercising American global leadership" — that is, a mere mask for American hegemony. Peace-keeping missions are described as "demanding American political leadership rather than that of the United Nations".

Perhaps the most startling element of this plan is the targeting of Saudi Arabia, long considered the most faithful American ally among the Arab countries — the base for the American assault on Iraq in 1991, a continuing US military base thereafter, the US’s second largest market for weapons, the largest supplier of oil to the US (at a special discount to boot), and the source of up to $700 billion of investments in the US. On July 10, 2002 a researcher from the RAND Corporation (a prominent think-tank, created by the US Air Force but now quasi-independent, that regularly does projects for the American defence and foreign policy establishments) made a presentation to the Defence Policy Board — headed, by Perle. The briefing, titled "Taking Saudi out of Arabia", claimed that "The Arab world has been in a systemic crisis for the last 200 years" and that "Since independence, wars have been the principal output of the Arab world". It went on to describe Saudi Arabia in bizarre terms as an enemy of the US ("the kernel of evil, the prime mover, the most dangerous opponent", "The Saudis are active at every level of the terror chain, from planners to financiers, from cadre to foot-soldier, from ideologist to cheerleader"), and recommended that the US give it an ultimatum to prevent any anti-US activity in Arabia, failing which its oil fields could be seized by US troops and the House of Saud replaced by the Hashemite monarchy that now rules Jordan. The latest removal of the US base from Saudi Arabia may be a part of the process of implementation of the report.

Incidentally, a $3 trillion lawsuit has been filed in an American court accusing several Saudi institutions and charities and three members of the royal family, including the defence minister, of financing terrorism. Following the filing of this lawsuit, Saudi investors have withdrawn up to $200 billion from the US.

It says that the United States "enjoys a position of unparalleled military strength and great economic and political influence". "Today, the world’s great powers find ourselves on the same side" — that is, the US lacks any rival. This is "a time of opportunity for America.... the United States will use this moment of opportunity to extend the benefits of freedom across the globe". But, it goes on to add: "Despite its unrivalled supremacy, the US is faced by a new type of enemy: "shadowy networks of individuals.... organized to penetrate open societies.... To defeat this threat we must make use of every tool in our arsenal.... The war against terrorists of global reach is a global enterprise of uncertain duration....".

Casting its eye about the world, NSSUSA spells out America’s tasks in different regions.

Europe is to be kept subordinate to, and dependent on, American power. While the US supports the goal of European integration, it adds "we must seek to prevent the emergence of European-only security arrangements which would undermine NATO, particularly the alliance’s integrated command structures."

NSSUSA issues a blunt warning to China against "pursuing advanced military capabilities that can threaten its neighbours in the Asia-Pacific region." The US threatens China with interference in its internal affairs: "To make that nation truly accountable to its citizens’ needs and aspirations... much work remains to be done." US deployments in the region are to be beefed up, and in order to ensure that American troops are stationed as close as possible to China, South Korea is to be convinced to "maintain vigilance [ie hostility] towards the North while preparing our alliance to make contributions to the broader stability of the region over the longer term."

In contrast with China, India is presented as a pillar of American influence in Asia: "We (the US and India) are the two largest democracies, committed to political freedom protected by representative government. India is moving toward greater economic freedom as well. We have a common interest in the free flow of commerce, including through the vital sea lanes of the Indian Ocean. Finally, we share an interest in fighting terrorism and in creating a strategically stable Asia."

The document outright opposes the emergence of imperialist rivals. It crudely states: "Indeed American ‘national security’ lies in the absence of any other great power. We are attentive to the possible renewal of old patterns of great power competition.... our military must... dissuade future military competition.... Our forces will be strong enough to dissuade potential adversaries from pursuing a military build-up in hopes of surpassing, or equaling, the power of the United States."

The document openly demands that countries open up their economies to the US. It states: "Free markets and free trade are key priorities of our national security strategy." "Respect for private property" is among the "non-negotiable demands of human dignity." The economic policies of other countries — their legal and regulatory policies, tax policies ("particularly lower marginal tax rates"), financial systems, fiscal policies, and (what the US calls) "free trade" are considered part of the "national security" of the US. "Free trade" is put as "a moral principle". However, "free trade" refers to others opening their markets to the US.

The NSSUA is a veritable charter for a new style colonisation. It says that the US will now more directly than ever before intervene in and supervise all aspects of "governance" of the lands under its sway.

This then is now the official policy of the United States Government. It is horrific and terrifying, but clear, without any ambiguity. Iraq was the first victim of this policy.

The basic economic logic underlying the war — and the opposition of some countries to it — is the most obvious: oil. It is widely believed, by Iraqis and others in the Arab countries, and by a majority of people throughout the world, that this war has to do with American companies getting direct control over Iraqi oil. A look at some relevant data will make this clear. America consumes 19 million barrels of oil, i.e. three thousand million (3,000,000,000) litres of oil every day (1 barrel = 160 litres). Two-thirds of that is consumed by cars and private transport, the rest in heating houses, offices, and manufacturing. US oil production fell by 15 per cent in the 1990s, whereas its consumption of oil grew in the same decade by 11 per cent. That demand is only expected to grow in the foreseeable future. Currently, it imports at least half its oil, which will rise to over 60 per cent in the next few years: the world’s oil consumption is expected to grow from 77 million barrels per day to 120 million barrels over the next twenty years, and the highest increase in demand is expected from the US. This enormous American appetite for oil comes from two factors: public transport was dismantled by the powerful car industry in the 1920s and 1930s, and there exists virtually no public transport in most American towns. Most people use cars for their most basic daily needs. Americans currently own over 200 million cars; two cars per family on average! And two, the advanced capitalist, recklessly consumerist American way of life, all of which is sucking up a quarter of the oil that is consumed worldwide. Which is where the gigantic oil companies come in, and their interest in Iraq. Oil is the most dominant aspect of Iraq’s economy, and is responsible for 95 per cent of its foreign exchange earnings. Iraq’s known reserves have been estimated at 112 billion barrels, the second largest in the world, after Saudi Arabia. Besides, unexplored reserves are expected to be another 100 to 200 billion barrels more. However, oil is not a finished product. It needs to be extracted from the ground, processed, transported to the right markets and sold for profits to be generated. It is less known that the costs of extracting Iraqi oil are among the cheapest in the world: less than a dollar a barrel, compared to $ 2.50 in Saudi, at least 4 dollars a barrel in the North Sea area and upto $12-15 in the US and Russia. In addition, Iraqi oil is of exceedingly good quality — i.e. it has a very low sulphur content. Lesser costs obviously mean greater profits, and the profits on this vast quantity of oil, cheaply extracted, are huge: by one estimate, if oil prices were US$25 a barrel (they currently vary between $25 and $28 a barrel), and if the profits were equally shared by the companies and whatever Iraqi government is in place, the potential annual profits for the companies from Iraqi oil would be 29 billion dollars, i.e. 1,36,500 crore rupees every year, for fifty years!  (In case this seems an unreal figure, let us bear in mind that the profits of the five largest private companies in the world in 2001 were 44 billion dollars, i.e. 2,10,000 crore rupees.)

However, the problem for American and British oil companies — and for the American political elite, such as George Bush, vice-president Dick Cheney, George Bush Sr., many of whom were CEOs, directors of or connected to oil companies, and thus have a vested material interest in war — is that none of them have rights to Iraq’s oilfields. Control by western powers and companies over Iraq’s oil was loosened in 1972 when the Baathist government nationalized the Iraq Petroleum Corporation, owned at the time by oil companies from the US, France, Holland and Britain. In 1973, during the Arab-Israel War, the Iraqi government took over the Basrah Petroleum Company operating in southern Iraq from the Americans and the Dutch. Never since then have America or Britain managed to have a direct stake in Iraqi oil. The US wants a pliant regime in place, a regime favourable to American companies and interests, as they imposed earlier in Afghanistan.

What are China’s interests? The government-owned China National Petroleum Corporation has been awarded the Al Ahdab oil field, which can produce close to a lakh barrels (160 lakh litres) a day. China’s stakes are high in the medium term: its demand for oil is expected to grow the fastest after the United States in the next twenty years. But China does not have the oil to meet this demand; unlike Russia, it is a net importer of oil. From a low base of 25,000 barrels per day in 1993, China’s oil imports increased 18 times, to 4,50,000 barrels per day in 1996. As Chinese industry expands, oil supply will be China’s main concern. The US establishment seeks to establish its dominance over China in the long-term by keeping China out of West Asia, the largest source of oil in the world, and making it dependent on oil supplied by US companies. This was one of its strategic interests in invading Afghanistan as well, restricting China’s access to the oil and natural gas reserves in the Caspian region.

French, Chinese, and Russian governments and companies realize that their current contracts carry little weight with a new, pro-US regime. True, contracts are subject to international law, such as the UN Resolution 1813: Permanent Sovereignty over Natural Resources. Under international law, property rights awarded by a previous government must be respected by a new regime. New governments, representing sovereign nations, can change or cancel contracts, but would have to pay compensation. However, there are loopholes to avoid this: the new regime can show that the process by which contracts were awarded was not transparent; or there was corruption; or they were awarded on political considerations, either or all of which are likely.

It’s not just a question of existing contracts being under threat. Even bigger profits are to be made on as yet unexplored oil. Iraq is known to have 112 billion barrels of reserves, but potentially it may have twice that volume of oil, over 220 billion barrels. It has been reported that 417 new oil wells have been planned. Iraq’s output at about 3 million barrels per day is low relative to its potential, and could be easily doubled in a few years. It will require a lot of investment, but the profits, as mentioned earlier, are enormous. These nations opposing the war well realize that a pro-US regime will help American companies dominate current and future markets in Iraq. And current reports suggest that the Pentagon will have a big role in administering Iraq either directly or indirectly.

US companies will also corner reconstruction deals. When asked whether France would have a role in postwar Iraq, a US official said that given France¹s "anti-Americanism", it would be left to "pick up the garbage". Five corporations, all American ones, were asked to place bids for contracts worth $900 million. The contract is now given to the giant Bechtel, whose CEO, for a long period, was former Secretary of State (under Regan), George Schultz. A subsidiary of Halliburton, which vice-president Dick Cheney used to head until he joined the Bush team, got an initial contract for $500 million to repair seven oil wells in Rumeila. Reconstruction contracts will amount to billions of dollars in postwar Iraq. Even Britain is getting anxious at US arrogance, and the fact that reconstruction projects are already being awarded to American companies, none to any British ones. Which explains why Britain, as a pressure tactic, has recently been saying that the United Nations will have a hand in how postwar Iraq is run. The US response: nothing doing; the UN’s role would be restricted to humanitarian aid. In short, the US seeks to socialize the costs, and privatize (for US companies) the profits.

The Arms Industry

It’s not just oil and reconstruction, there’s also the lucrative arms industry. France and Iraq have had excellent trading ties in general. As far back as 1983, a thousand French companies, large and small, were active in Iraq. There were about six to seven thousand French specialists based in Iraq. Even today, about 21 per cent of Iraq’s trade is with France. Of those specialists mentioned above, some represented the largest French weapons companies. Forty per cent of French military exports during the decade of the eighties was to Iraq. Between1979-89, France was the second largest arms supplier to Iraq after the Soviet Union. In fact, Iraq owes France US$4.5 billion from arms sales in the past, which it is highly keen to recover. Russia, if anything, has even older military ties, going back to when the Soviet Union signed a Treaty of Friendship and Cooperation with Iraq in 1972. Iraq owes Russia US$ 8 billion for previous arms sales; impoverished Russia is even keener than France that its debts are repaid. Arms deals with some of these countries were negotiated in the 1990s, violating the UN embargo on arms sales to Iraq after the first Gulf War. For instance, Russian firms Livinvest, Mars Rotor and Niikhism supplied parts for military helicopters in 1995. Mars Rotor and Niikhism sold missile parts to a Palestinian who transported them to Baghdad. In 2001 and 2002, the Chinese firm Huawei Technologies sent supplies towards Iraqi air defence. Germany too violated the UN embargo. In fact, recent UN documents suggest that Germany is currently Iraq’s biggest arms-trading partner with eighty German companies, including Siemens, selling weapons technology and arms to the Iraqi regime. The German government reportedly "actively encouraged" the arms trade with Iraq.
Defence is a highly lucrative industry. The arms market after this war, not just in Iraq but also other countries of the region, is expected to be large, and these countries are keen that they do not get edged out by American arms giants. In 1993, after the first Gulf War, arms exports of American companies doubled from sales to Israel, Saudi, Egypt. This time too, Raytheon, Boeing, and General Dynamics, part of America¹s enormous military industrial complex, will stand to gain, at the cost of French, German and Russian suppliers.

There’s another economic factor as to why this war took place, and at this time: the euro’s challenge to the dollar as the world’s dominant currency. Currently that is of course the dollar: half of all global exports, two-thirds of the total foreign exchange reserves of governments, and four-fifths the value of foreign exchange transactions are carried out in dollars. This has many, huge, and interconnected advantages to the US economy and to American companies and banks. To be able to pay for your imports in dollars, you need to earn them in the first place by selling goods or services to the US, that too cheaply given the strength of the dollar. Rather than converting those earnings to your own currency and then re-convert to the dollar when you need to pay, it makes more sense to keep them in dollars in American banks. Given the importance of the dollar and the relative safety of the American economy, many foreign exchange earners would prefer to keep their surplus earnings in dollar accounts or buy American assets. For instance, Arab investors invest nearly 1,500 billion dollars every year in the US economy. Governments have to keep a portion of their foreign exchange reserves in dollars, which means having to invest in US government bonds, the stock market, or in real estate.

Most of all, it allows the US to sustain its enormous deficits. Hypnotized by the sharp rise in the value of their stockholdings, consumption by American households shot up in the second half of the 1990s. The US economy itself was and is consumption-driven, as Americans consumed, beyond their earnings, and beyond what America could produce. Imports therefore grew rapidly, at 11 per cent between 1995 and 1999 (even as exports declined, partly because of the high value of the dollar), leading to record trade and current account deficits. These deficits and America’s enormous debt can be sustained only because of the primacy of the dollar, as investors abroad are willing to lend and invest.

Till 1999 there was no currency to challenge to domination of the dollar. In the late 1980s the yen did arise as a potential threat, but with the decade-long collapse of the Japenese economy, this faded out. Today, the dollar’s primacy can be challenged only by the euro, and that can happen only if the trade in oil, at over one thousand billion dollars a year (10% of the world’s merchandise trade), moves from the dollar to the euro. On 6 November 2000, Saddam nudged it in that direction by telling the UN that Iraq’s oil earnings would henceforth be in euros, not dollars. Later, Iraq’s foreign exchange reserves of $10 billion were also converted to euros. Iraq was the first oil exporting country to do so. Others followed. Iran converted half its reserves into euros. Russia increased its share of reserves in euros from 10 to 20 per cent. Venezuela, North Korea, and many other countries began considering the euro as an alternative. All of this led to a rise in the value of the euro vis-à-vis the dollar, by as much as 20% in 2002. There was the fear that OPEC countries may move to the euro — partly because of the declining US stock market since January 2001. Were that to happen, the dollar would get a great shock. The problem for the US is that the harmful effects, like its advantages, are also interconnected. A move in oil trade to the euro would lead successively to a sharp fall in the value of the dollar, to a sale of dollars, to a further fall in value, to panic and loss of confidence, to a shift of investment to other economies, and the incapability by the US to support its enormous debts and cover its huge trade deficits of over $450 billion. And as the scramble for markets gets more desperate in the growing recessionary situation worldwide, the conflict between the Euro and the dollar, which represent the two largest markets in the world, are bound to intensify.

France and Germany knew that were the US to gain control over Iraqi oil, it would pressurize OPEC, Russia and China to stay with the dollar. Then, French and German banks and companies would have to give up any hopes of the euro becoming the dominant currency in the world, at least in the immediate future.

This war of currencies is part of imperialist rivalry, which is growing due to the deepening economic crisis throughout the world. After the ‘victory’ of the US adventure the more conciliatory statements from Russia and Germany, and the anxieties of French companies at being left out of the spoils, reflects this eventuality. Their conciliation has a vested economic interests, just as their opposition to the war had. But their rivalries will not be resolved by how Iraq’s tragedy unfolds. Iraq is only an initial battle in a long phase of growing inter-imperialist contention. The US will continue to use its enormous military dominance to try to get an economic edge over everybody else. That means repeated conflict and warfare.

Direct American control of oil would render potential challengers for world or regional supremacy (primarily Europe’s imperialist powers) dependent on the US. It is clear the US is following this policy.

Except for Russia and the UK all the major countries are dependent on imports for their oil. Therefore control of oil and oil routes, can help the US dictate terms to their rivals. The US imported, in 2000, 9.8 million barrels a day of its 19.5 million barrel requirement — that is, about half. By contrast, Japan imported 5.5 out of 5.6 million barrels; Germany 2.7 out of 2.8; France 2.0 out of 2.1; Italy 1.8 out of 2.0; and Spain 1.5 out of 1.5. In other words, these countries imported 90 to 100 per cent of their oil requirements. China too is a major importer of oil and gas: it is projected to import 10 million barrels a day by 2030 — more than eight per cent of world oil demand. They would therefore be very vulnerable to blackmail by a power, which is able to dictate the destination of oil. (Aspects of India’s Economy; Nos 33 & 34)

In order to push for its control over oil worldwide the US has adopted the following steps:

· French, Russian and Chinese firms will get evicted from Iran and Iraq once the US takes full control. Besides, Europe depends on Middle East oil for 50% of its needs. With US control over this, it can arm-twist European countries to dance to its tune.

· The US has gone to great lengths to frustrate alternatives to its Baku-Ceyhan pipeline (which is to run from the Caspian through Turkey to the Mediterranean). With the US invasion of Afghanistan, the US has set up a chain of military bases in Central and South Asia — Pakistan, Afghanistan, Kyrgystan, Tajikistan, and Uzbekistan, with military advisers in Georgia as well. Part of the US desire to reduce the Indo-Pak conflict is their plan to bring Central Asian gas to the huge market of India (and even beyond) through pipelines across Afghanistan and the Pakistan. Even in Bangladesh Unocol is seeking to control its huge gas reserves on the condition that the Indian market is opened out for that gas. It is then no wonder that it is the US that is also encouraging the Free Trade Area within SAARC countries.

· The US is about to send two battalions of Marines to help suppress the insurgency in Colombia; it is training a new brigade to protect Occidental Petroleum’s pipeline in that country. At the same time it is actively organising the overthrow of the elected Pro-Europe Chavez government in Venezuela.

· The Institute for Advanced Strategic and Political Studies, an Israeli lobby group that met President Obasanjo of Nigeria in July 2002, claims the US is on the verge of a "historic strategic alignment" with west Africa and that the region is "receptive to American presence". The institute has advocated the setting up of a US Gulf of Guinea military command: the island of Sao Tome, south of Nigeria and a possible site for a naval base, hosted a visit from a US general in the same month. The activity comes while the Nigerian government is considering leaving OPEC, and developing its oil trading relationship with the US instead. The US is also maneuvering to control the oil reserves of Angola, Gabon, Cameroon, and Equatorial Guinea. Africa already provides 15 per cent of US oil imports, and these are set to rise to 25 per cent by 2015. The British/Dutch Company, Shell, has also major interests in this region.

· A major consideration in the US’s great oil grab is its desire to check China. As China attempts to arrange its future oil supplies, it finds itself checked at each point by the US. China’s attempts in Kazakhstan did not get off the ground after the entry of US forces into Central Asia. In 2002, Chinese firms have bought two Indonesian fields for $585 million and $262 million, respectively. Indonesian president Megawati Sukarnoputri has visited China twice since becoming president in 2001, hoping to bag a $9 billion contract to supply liquid natural gas to power industries in southern China. No surprise then, that the US has stepped up its activities in the vicinity of Indonesia — forcing the Philippines to accept its "help" in the name of hunting fundamentalists, patrolling the Malacca straits in tandem with the Indian navy, and pressing Indonesia to accept US ‘cooperation’ in suppressing Al Qaeda elements in Indonesia itself. In addition, China has struck oil field development deals with the very countries in West Asia hit by US sanctions —Iraq, Iran, Libya and Sudan. With this entire region now to be targeted through the US occupation of Iraq, China’s deals are sure to meet the same fate as its Central Asian pipeline.

Besides oil being used as a weapon for world hegemony, it serves as a source of gigantic profits for the oil giants of the US and Britain — some of which are in the top 15 TNCs of the world. In fact in the Fortune 500 listing of 2002, five oil companies ranked amongst the top 15, all of which made gigantic profits. Exxon (USA) at No. 2 had a profit of $15 billion; British Petroleum at no.4 had a profit of $8 billion; Shell (a British/Dutch company) at no. 8 had a profit of $11 billion; ChevronTexaco (USA) at No. 14 had a profit of $3 billion; and TotalFinaElf (French) had a profit of $7 billion. Besides these there are the Russian oil giants Lukoil, and with the recent merger of Yukas (2nd largest) and Sibneft (5th largest), this merged company has become the 4th largest oil company in the world. Oil exports are crucial to Russia’s economy; with the taking over of Iraqi oil by the US and the likely fall in oil prices, the already fragile Russian economy will be badly hit.

Both in America and Britain oil magnates have been the most powerful houses in the country. Rockefeller, who founded the Standard Oil Company of the USA was the world’s richest person. Exxon (formerly Jersey Standard) has been one of the top 5 companies of the world for decades. But many of their oil fields in the US, Alaska, North Sea are getting depleted and extraction more expensive. Iraqi oil will come as a windfall, because of its huge reserves, high quality and very cheap costs. Chalabi and others have already stated they will hand over the fields to US firms on unbelievably good terms — this was even before the aggression began. While all the oil fields of the Middle East are nationalized, with governments getting good royalties from the extraction by TNCs, Chalabi and Co. wants to set the trend of de-nationalisation to enable the oil TNCs to maximize their profits. It is believed that after Iraq sets the trend Saudi Arabia will be put under pressure to de-nationalise ……… followed by Iran.