Did the US invade Iraq to drive oil prices even higher?

(snip)

It began with a character known as "Mr. 5%"-- Calouste Gulbenkian -- who, in 1925, slicked King Faisal, neophyte ruler of the country recently created by Churchill, into giving Gulbenkian's "Iraq Petroleum Company" (IPC) exclusive rights to all of Iraq's oil. Gulbenkian flipped 95% of his concession to a combine of western oil giants: Anglo-Persian, Royal Dutch Shell, CFP of France, and the Standard Oil trust companies (now ExxonMobil and its "sisters.") The remaining slice Calouste kept for himself -- hence, "Mr. 5%."

The oil majors had a better use for Iraq's oil than drilling it -- not drilling it. The oil bigs had bought Iraq's concession to seal it up and keep it off the market. To please his buyers' wishes, Mr. 5% spread out a big map of the Middle East on the floor of a hotel room in Belgium and drew a thick red line around the gulf oil fields, centered on Iraq. All the oil company executives, gathered in the hotel room, signed their name on the red line -- vowing not to drill, except as a group, within the red-lined zone. No one, therefore, had an incentive to cheat and take red-lined oil. All of Iraq's oil, sequestered by all, was locked in, and all signers would enjoy a lift in worldwide prices. Anglo-Persian Company, now British Petroleum (BP), would pump almost all its oil, reasonably, from Persia (Iran). Later, the Standard Oil combine, renamed the Arabian-American Oil Company (Aramco), would limit almost all its drilling to Saudi Arabia. Anglo-Persian (BP) had begun pulling oil from Kirkuk, Iraq, in 1927 and, in accordance with the Red-Line Agreement, shared its Kirkuk and Basra fields with its IPC group -- and drilled no more.

The following was written three decades ago:

Although its original concession of March 14, 1925, cove- red all of Iraq, the Iraq Petroleum Co., under the owner- ship of BP (23.75%), Shell (23.75%), CFP (23.75%), Exxon (11.85%), Mobil (11.85%), and Gulbenkian (5.0%), limited its production to fields constituting only one-half of 1 percent of the country's total area. During the Great Depression, the world was awash with oil and greater output from Iraq would simply have driven the price down to even lower levels.

Plus ça change...

When the British Foreign Office fretted that locking up oil would stoke local nationalist anger, BP-IPC agreed privately to pretend to drill lots of wells, but make them absurdly shallow and place them where, wrote a company manager, "there was no danger of striking oil." This systematic suppression of Iraq's production, begun in 1927, has never ceased. In the early 1960s, Iraq's frustration with the British-led oil consortium's failure to pump pushed the nation to cancel the BP-Shell-Exxon concession and seize the oil fields. Britain was ready to strangle Baghdad, but a cooler, wiser man in the White House, John F. Kennedy, told the Brits to back off. President Kennedy refused to call Iraq's seizure an "expropriation" akin to Castro's seizure of U.S.-owned banana plantations. Kennedy's view was that Anglo-American companies had it coming to them because they had refused to honor their legal commitment to drill.

But the freedom Kennedy offered the Iraqis to drill their own oil to the maximum was swiftly taken away from them by their Arab brethren.

(snip)

http://www.alternet.org/waroniraq/37371/

With the invasion/occupation of Iraq, oil prices worldwide have skyrocketed. Who gains the windfall profits on that? You? Me? No. Exxon-Mobil and other oil companies do.

I believe that among other things. This whole horrible mess is about power and money for a few old men.

it's just one of the things in a long list of unintended consequences of putting fools in charge of the USA.

what mechanism has allowed the small minority of Republicans that profit from oil to become more powerful than the collection lobbying and vote buying of manufacturing, realestate and the service sectors?

The Republican money machine is not based solely on oil.

Service sector corporations and manufacturing corporations are rightfully upset if they are intentionally suppressing Iraq's oil fields, but at the present time, oil men control the White House, and oil companies tend to be the biggest corporations. If one references the top five corporations in terms of size, oil companies hold three of the five slots. CitiGroup, Bank of America, and others are smaller.

The only thing they agree on is being afraid of the people at large and of trying to keep the people from challenging their position of power in government and the economy, but aside from that, they fight each other.

Think about it - Iran is a rich source of petroleum. Bomb them, contaminate their supply, the price of oil skyrockets nearly tenfold of what the original prices are. This war is all about greed, plain and simple. There's no reason why we should be in Iraq or provoking Iran. None whatsoever.

market. They also want it traded in dollars only in the markets. It's all about control.

Did we invade to insure cheap plentiful oil and it went awry or did we invade to cause expensive volatile oil prices and everything went according to Bush's plan?

If the former, Bush is an idiot and everything has exploded in his face causing the loss of Congress and historically low poll ratings. If the latter, Bush is a genius and we are just now beginning to realize it, though you would have to ponder why he is willing to trade the inevitable political damage caused by high oil prices, to himself and his party, for the profits of his oil buddies. If they were thinking long term, they should prefer power and profits stretching into the future, to loss of power due to short term profits. Maybe he still as something up his sleeve.

but the oil is key, couldn't be more obvious since they protected the oil ministry and let the rest of Baghdad go to hell. That's history.

We can suspect Cheney and Big Oil et al of mapping out the conquest and dividing up the spoils in advance at the infamous "Energy Meeting" in 2002. But that remains classified so no record yet.

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Low oil prices. I'm really starting to think there may actually be another incentive to reducing the supply of available oil besides the obvious monetary considerations at hand. One would be to make oil and gas so expensive as to make it unaffordable for the vast majority of Americans to own vehicles with only the rich having access to them (with the excuse that it reduces global warming instead of making more fuel efficient cars that everyone can have access to) and secondary business considerations of reducing competition in the marketplace with high oil prices straining the budgets of smaller businesses thus allowing larger corps to take over and monopolize the markets.

oil companies making 30 billion dollar profits and gas prices higher than ever makes the bought men of Washington very happy. I wonder how reasonable gas prices would be if the oil industry only profitted say 10 billion? I mean does one guy really need 132 million dollar compensation plan(Exxon CEO i think). Nothing anyone can do is worth 132 mill. Except for find a cure for cancer or aids.

The war has detracted from national security because it has diverted us from our actual enemies.

Yes, it is about control of the Iraqi oilfields.

It's no coincidence that the Iraqi oilfields and oil ministry were the first things under control.

meetings. Iraq was probably part of the plan, but I do believe this all comes out of Cheney's task force.