Last Monday we posted concerning the geopolitical imperative of oil depletion behind the US invasion of Iraq (”Three Years on from “Operation Iraqi Freedom” - A Stable
Gulf?”). Having looked into the issue further it is apparent that the neo-conservative ambitions for the reshaping of the Middle East were far more ambitious than had first been supposed; but that the US ‘ultra establishment’ in alliance with Big Oil finally pulled the plug on them. Incredibly, the plan had the initial moniker “Operation Iraqi Liberation” which due to its unfortunate acronym was swiftly renamed “Operation Iraqi Freedom” (a semantic gaff only rivalled by Bush’s post 9/11 declaration of a ‘crusade’ against Islamic terrorism).

While Tony “45 minutes” Blair calls the idea that oil played a part in the invasion of Iraq a conspiracy theory, investigative journalist Greg Palast has uncovered a neocon planning document which details that the real aim of the invasion was to smash the OPEC cartel and institute a new world energy order.

The plan was to privatise the Iraqi oil industry along with the rest of the Iraqi infrastructure and use Western oil expertise to massively ramp up production for sale outside of the OPEC price cartel. A primary objective of the plan was to displace the Saudi’s position as producer of last resort thereby freeing the US being hostage to fortunes of the House of Saud. Flooding the market with cheap oil would have had enormous benefit to the US - significantly weakening the geopolitical positions of sworn enemies in Venezuela and Iran and hugely undermining the position of Russia.

The neocons, drunk on imperial hubris, had not factored into this equation two rather crucial constituencies - the Iraqi people and the Western oil companies. Realists, such as General Garner, the interim imperial governor of post war Iraq (and with hands on experience of dealing with the free Kurds) and the immensely powerful James Baker, regarded the wholesale privatisation as a likely harbringer of wide-spread insurrection. Garner was in favour of immediate elections and was soon replaced by Governor Bremer, whose agenda was to delay elections long enough to privatise the Iraqi infrastructure and implement the economic plan to enforce a radical free market straight jacket on any subsequent regime. This delay is widely seen as a major contributing factor to the subsequent development of violent insurgency.

The Western oil companies, unsurprisingly, had little interest in a planning to crash the price of oil. Perhaps more surprisingly, with a history of dealing with Middle Eastern dictators and their nationalised oil companies, and an earlier history in which their private investments in the Middle East were nationalised by those very same dictators, they were also lukewarm to the idea of whole-sale privatisation. In reality, as we reported on February 16th (”Crude Design’s on Iraq’s Oil”) while de jure Iraqi oil remains in government hands the contractual ‘booking’ arrangements with Western oil companies make for something far closer to privatisation than anything but a nominal notion of nationalisation.

Instrumental in spiking the neocon’s wilder ambitions was Former Secretary of State James Baker III who George W. Bush appointed Special Presidential Envoy to Iraq. Baker, who famously watched the September 11 attacks unfolding at the Ritz-Carlton with the Bin Laden family, had his own interests, and those of his clients, to pursue. His law firm represents the Bush family, the House of Saud and ExxonMobil.

Far from destroying OPEC and flooding the oil market with cheap oil the rival State Department plan for Iraq’s oil contains a directive to Iraqis to maintain a state oil company that will “enhance its relationship with OPEC” and the current status quo of oil quotas.

The neoconservative’s greater ambitions were thwarted and despite the de facto privatisation being foisted on Iraqi oil, events on the ground have forestalled any possibility of massive production increases in anything like the near future. Rather than being less dependent, the US, if anything, is now more dependent on Saudi oil - and rather than sidelined the House of Saud’s importance to US strategic interests, and to the global economy, of is greater sigificance than ever.

The Pentagon, cognizant of this situation, are fast drawing up emergency plans to keep the US war machine on the road in the face of oil depletion.