Fill 'er up

September 19, 2007

Alan Greenspan became famous when he was chairman of the Federal Reserve for being largely indecipherable, but his comment about Iraq in a new memoir could hardly have been clearer. "I'm saddened," he wrote, "that it is politically inconvenient to acknowledge what everyone knows: The Iraq war is largely about oil."

Maybe that was too clear. Mr. Greenspan quickly began backpedaling in interviews after the book came out, reverting to his familiar sift-through-this-for-meaning style. Antiwar critics nevertheless treated it as a gotcha moment, while administration defenders, including Defense Secretary Robert M. Gates, poured cold water all over it. But honestly, hasn't anyone been paying attention all these years? Of course the war's about oil.

In August 2002, Vice President Dick Cheney pointed out that Iraq had the second-largest oil reserves in the world, and that the U.S. couldn't afford to let Saddam Hussein use that oil to pay for his nefarious undertakings. This July, President Bush said the U.S. can't afford to let the terrorists who are now in Iraq use all the oil that's there to pay for their nefarious undertakings. Granted, that implies a negative motive over the oil - keeping it out of someone else's hands - but that's still about oil, no matter how you look at it.

In January 2003, we argued that the biggest impact of the looming war in Iraq would be on the world oil business, and that it was simply unbelievable that the Bush administration, in particular, would be unmindful of that. We pointed out that the Saudis had become increasingly suspect as steadfast allies (see 9/11) and that the installation of a pliant regime in Baghdad would go a long way toward keeping the Saudis in line.

The Russians, too. Part of their opposition to the war was grounded in the fear that the U.S. would ramp up Iraqi oil production and push the price, then about $27 a barrel, below $18, which would be ruinous to their own oil business. An American delegation went to Moscow in early 2003 to try to reassure the Kremlin. As it turned out, the Russians needn't have worried.

When U.S. troops invaded Iraq, their first mission was to secure the southern oil fields. When looters swept through the National Museum in Baghdad, and through weapons depots around the country, American troops remained at their posts, protecting the oil fields.

Is that clear enough?

Here are some ways to measure the failure of this war: Anemic Iraqi oil production at 2.1 million barrels a day, less than before the fighting broke out; the global price of a barrel rising above $80; the Russian economy booming; the Saudis uncowed.

Back in the January before the war, we also argued that Iraq might be just a first step toward ensuring a steady flow of oil on the world market. Right next door is Iran, which because of discoveries made since 2003 now has the second-largest oil reserves, and which produces twice as much oil as Iraq. But there's more: Iran provides access to the Caspian Sea, and from there to Central Asia. That's a bonanza twice over, and it's a thumb in the eye to Moscow, as well.

So here's our question for Alan Greenspan: Is it politically inconvenient to acknowledge that the potential war in Iran is going to be about oil?

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