When the US-led coalition invaded Iraq in 2003, one of the most common perceptions was that the primary motive behind the war was the country’s significant oil reserves.
According to a 2002 Pew Poll, 44 per cent British, 75 per cent French, 54 per cent Germans, and 76 per cent Russians were greatly suspicious of US intentions in Iraq and bought into the “blood for oil” narrative. On the contrary, only 22 per cent of Americans believed that the Bush administration’s policy was driven by oil interests.
At the time, experts pointed out that this argument was deeply flawed and a lazy mantra of the war opponents.
While Iraq has the second largest oil reserves in the world, its output in the early 2000s was modest and accounted for only 3 per cent of total global productivity. Due to the geology of the oilfields and, above all, the poor infrastructure destroyed by years of war, Saddam’s negligence, and the sanctions regime, Iraq had the lowest yield of any major producer, amounting to just 0.8 per cent of its potential output.
The Economist cited a joint study by the Council on Foreign Relations and the James Baker Institute of Rice University, concluding that
it would take nearly a decade and up to $40 billion to revive Iraq’s oil sector. That could lift Iraqi output to 4.2m-6m barrels per day, up from around 2.5m bpd today. However, it would still fall far short of Saudi Arabia’s whopping output of over 8m bpd today.
By the end of 2011, the US had spent almost $802bn on funding the war and, as the Centre for Strategic and International Studies pointed out, Iraq had additional debts of over $100 billion.
On top of that, the US only imports 12.9 per cent of its oil from the Middle East. The vast majority, 8.1 per cent, is provided by Saudi Arabia.
In other words, invading Iraq was an extremely expensive undertaking for the US-led coalition with no guarantee or prospect of considerable profitability.
As Daniel Yergin argued at the time: “no US administration would launch so momentous a campaign just to facilitate a handful of oil development contracts and a moderate increase in supply-half a decade from now.”
The “blood for oil” thesis, at best, represents a small proportion of the truth.
10 years after the invasion of Iraq, who is profiting most from the country’s oil reserves? The US? The UK? No. PetroChina, Russian Lukoil, and Pakistan Petroleum – fierce opponents of the war.
On the other hand, as Germany’s leading weekly news magazine DER SPIEGEL reported this week, “America has not a single, significant oil deal with Baghdad” anymore.
EXXON is moving out of Iraq and PetroChina has taken the lead in the auction of West Qurna – one of the largest oil fields in the world – with Russian Lukoil as a potential competitor. If the Chinese bid is successful, the country will account for 32 per cent of total oil contracts in Iraq.
The “blood for oil” conspiracists owe President Bush an apology.
