IRAQ WAR WAS TO DESTABILIZE OIL?

Tuesday, October 18, 2005 - FreeMarketNews.com

by staff reports
Why did George W. Bush's indicate to England's Prime Minister Tony Blair that he would consider military action in other Middle Eastern countries, including perhaps Saudi Arabia? The explanation may be a simple one, according to various free-market thinkers who have closely scrutinized the administration's behavior. While Bush may have been motivated by a number of factors when contemplating military action, the speculation grows that one of them would have been the potential for driving up the price of oil, a benefit to the administration뭩 oil-industry allies.

The story, reported by British newspapers such as the Independent, is based on a recently disclosed "top secret Downing Street memo," which shows that in a secret telephone conversation in January 2003, the president indicated that he "wanted to go beyond Iraq," and "implied that the military action against Saddam Hussein was only a first step." The disclosure of the memo actually comes from "Lawless World," a book by leading international lawyer Philippe Sands, who is quoted as saying, "The conversation seems to indicate that Iraq was not seen as an isolated issue but as a first step in relation to a broader project." He is also attributed with the statement that "the mention of Saudi Arabia indicates that the true objectives were not related exclusively to WMD," after noting that at that time the Saudis were not considered to be a WMD threat or source.

FMNN has reported in the past that one of Bush's closest relationships is with Houston-based oil-banker Matthew Simmons who may also have an office in the White House. Simmons & Company International (SCI) works in numerous areas of oil and gas, but its initial success was in investment banking in the 1970s and 1980s, and Simmons, a well-respected member of the internationalist Council on Foreign Relations has been a tireless promoter of the "peak oil" theory - that the world is running out of energy. He recently wrote a book suggesting that the gigantic Saudi Arabian oil fields were damaged from over-production, and, judging from Internet sites, he has spent a good deal of time traveling to foreign countries to repeat his message about impending oil shortages.

Attorney Sands is perhaps puzzled by Bush's notion of invading other oil rich countries in the Middle East, but seen in the context of driving up the price of oil, Bush's stated intentions make sense. In Iraq, Bush expected to control and dominate the region's energy resources "on the ground" as the result of a successful campaign. But the administration no doubt also expected higher oil prices. If the United States had gone on to military action elsewhere in the Middle East, oil prices no doubt would have moved even higher, even sooner. An invasion of Saudi Arabia would have had an extreme impact. -ST


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