US: master of Iraqi oil ceremonies

Written for and published in Asia Times, May 24, 2003.

US: New master of Iraqi oil ceremonies
By Christopher Fitz and Macabe Keliher

WASHINGTON – In the tradition of Napoleon, who planned to crown himself Emperor of the World after liberating Europe from the feudal monarchies, the United States has pushed through a United Nations Security Council resolution to lift economic sanctions on Iraq.

On Thursday, after countless calls to his counterparts and minor concessions to their governments, US Secretary of State Colin Powell brought to vote a resolution to end more than a decade of economic sanctions against Iraq. The vote passed 14-0 with only Syria abstaining. France, Germany and Russia, the key voices trying to thwart the US in lifting sanctions, all voted Yes because, according to French Foreign Minister Dominique de Villepin, it “opens the road” for a central UN role.

The US, it will be recalled, was the loudest, most obstinate and most overtly obnoxious voice throughout the 1990s for upholding economic sanctions against Iraq. While most of the world – especially three of the permanent members of the Security Council, France, Russia and China – called for an end to sanctions, successive US administrations led the charge to keep them in place.

Almost 13 years after the sanctions mandate began, the tables have suddenly turned. US vigor to declare sanctions irrelevant is matched by the caution of France, Russia and China in approaching the latest Security Council resolution. At first glance, this reversal appears to be simple profit motivation by all parties wanting a share of the spoils of Iraqi oil. A closer look, however, shows a deeper irony: double and triple standards by the most verbal actors – France, Russia and the United States.

Sanctions in transformation
Levied on Iraq days after its invasion of Kuwait in August 1990, the original intent of the sanctions (UN Security Council Resolution 661) was to remove the Iraqi army from the internationally recognized borders of Kuwait, and punish the Iraqi government for such territorial ambitions. To that effect, they were partially effective. Iraq’s economy tumbled as both oil and cash stopped flowing. The country’s economic crisis quickened and internal social unrest grew. Meanwhile, UN, Soviet and regional diplomatic efforts to convince Iraq to leave peacefully in December 1990 and January 1991, showed potential until they were cut short by US ultimatums and eventual military action.

After the US attacked and destroyed and the Gulf War ceasefire was effected, Security Council Resolution 687 (April 1991) linked sanctions to Iraqi disarmament, including all nuclear, chemical, biological and missile weapons technologies. Iraq’s early refusal to cooperate fully with the United Nations Special Commission (UNSCOM) team translated into an indefinite extension of a mandate originally designed for short-term political pressure. The sanctions became the primary front in a decade-long economic war between Iraq and the sanctions’ principal backer, the United States.

While sanctions were crucial in pressuring the Saddam Hussein government to withdraw its territorial ambitions, they did not significantly disable Iraqi society until combined with massive US-led bombing of Iraqi civilian infrastructure. Water, electricity, communication and transportation systems were all knocked out with limited means of repair – a deadly combination from which Iraqi society has still not recovered. The toll of this UN-forged weapon was felt immediately after the Gulf War – and continued to be for more than a decade, with more than half a million deaths of children, as reported by the United Nations Children’s Fund (UNICEF) in 1999. With such horrendous humanitarian conditions aggravated by sanctions, they became a moral issue on the world stage, thus the UN “Oil for Food Program” begun in 1996.

The economics of Iraq
Meanwhile US officials also linked sanctions rhetorically to Saddam Hussein’s ouster. US-declared no-fly zones soon made clear that in fact its policy had little do with disarmament and everything to do with regional containment.

The reason for this was economics. Nearly 50 percent of Iraqi oil goes to the United States, accounting for 9 percent of total US oil imports, according to a recent Brookings Institution report. The Pentagon’s landmark 1997 Strategic Assessment reviewed the potential threats of the coming decade and found, “US vital interests are and will continue to be engaged in the [Persian] Gulf because of the global need for access to the region’s energy resources. To protect these interests, the United States has an enhanced forward military presence in the region.” Further threatening to this “US vital interest” were Saddam’s ongoing promises to grant foreign oil contracts to Russian and French corporations, which would edge out US companies. This is to say, if Saddam Hussein posed any sort of threat to the United States, it was economic, not military.

To Europe, however, the Saddam government presented more opportunity than threat, especially to Russia. Russia’s biggest oil companies had negotiated multibillion-dollar contracts with the Iraqi government to pump oil, which would be honored in disregard of sanctions or when sanctions were lifted. The spokesman of one of Russia’s largest oil companies, Zarubezhneft, was quoted in the late 1990s saying, “We are working to develop our cooperation as far forward as possible while sanctions are still in place, so deals can be signed without delay and work start immediately as soon as they are lifted.”

At the same time, France’s giant oil conglomerate TotalFinaElf established pre-contracts as early as 1997 on the future development of the Majnun fields. TotalFinaElf had obtained permission to install oil derricks at two sites – Majnoun and Bin-Umar – and was authorized in the pre-contract to pump 1 million barrels of crude oil each day, nearly 65 percent of current French oil consumption, according to the respected French economic monthly Capital.

Nor was China exempt from the high-stakes bargaining. According to the US Department of Energy’s International Outlook, China National Petroleum Corp signed a pending agreement for the North Rumailah field in 1997. The same report forecast that China’s oil imports from the Persian Gulf would quintuple from 500,000 barrels per day in 1997 to 5.5 million barrels per day in 2020, making China an invaluable customer in the region.

These potential contracts and support of the Saddam government stood in direct opposition to US interests.

The real reasons for war
Such a contradiction across the Atlantic had hung over the United States for some time, but two major external events coincided to prompt the administration of President George W Bush to transform a sanctions/containment policy into a policy of forcible, unilateral regime replacement: 1) France and Russia threatened to make the sanctions irrelevant by closing oil deals with Iraq outside the Oil for Food Program; 2) Iraq’s production capacity was approaching pre-Gulf War levels, and cash from oil smuggling to Turkey, Syria and Jordan constituted a perceived threat to regional balance of power – economically, politically and eventually militarily.

On the eve of the US-led invasion of Iraq in March, Bush declared that “Operation Iraqi Freedom” was about to commence for the benefit of Iraqis and in the name of American values. Most Americans didn’t know that less than two months before, the United States had doubled its purchases of Iraqi crude oil to prepare for the coming offensive. So it was fitting that upon arrival in Baghdad, US forces headed straight for the Oil Ministry while hospitals, schools, nuclear storage facilities and the treasures of Iraq’s National Museum were all looted. If it wasn’t clear before what Bush meant by “American values”, it should be now.

Perhaps the grandest irony of all relates to the two principal losers in the sanctions debate – Iraqi people and American values. Iraqi people, the main victims of the Ba’ath regime, the Gulf War and UN sanctions, became the unwitting pawns with which Saddam Hussein and the Security Council fought over this regional gold mine for more than a dozen years. The incapacitating effects of the latest war and its aftermath, especially looting of most public facilities and incredibly slow restoration of basic public care, suggest that they will continue to be unfortunate victims.

Christopher Fitz works at the Education for Peace in Iraq Center. Macabe Keliher is an independent historian and journalist.

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