Was Iraq Invaded to boost Oil Prices

Value of Exxon Reserves rose by 666 Billion

by Sherwood Ross

Global Research, June 2, 2007
afterdowningstreet.org

Saddam Hussein may have been deposed in order to limit Iraq’s oil production and thus keep world oil prices artificially high. This could be the real reason behind the invasion of Iraq by the Anglo-American forces and their allies.

According to Greg Palast’s new book, “Armed Madhouse”(Plume), “When OPEC raises the price of crude, Big Oil makes out big time.” Palast makes the point Iraq’s output in the 2003-05 period following the invasion saw a decline in oil production. In fact, it dropped to below the level of the 1995-2003 Oil-for-Food arrangement that allowed Iraq to sell two million barrels per day to raise cash for humanitarian purposes.
“Whether by design or happenstance, this decline in (Iraqi) output has resulted in tripling the profits of the five U.S. oil majors to $89 billion for a single year, 2005, compared to pre-invasion 2002,” Palast writes.

He points out the oil majors are not simply passive resellers of OPEC production but have reserves of their own which rise in tandem with oil prices.

“The rise in the price of oil after the first three years of the (Iraq) war boosted the value of the reserves of ExxonMobil Oil alone by just over $666-billion,” Palast wrote. What’s more, Chevron Oil, “where (Secretary of State) Condoleezza Rice had served as a director, gained a quarter trillion dollars in value.”

Another big winner in the Iraq war is Saudi Arabia. The war-stoked jump in oil prices, Palast writes, put $120 billion in Saudi Arabia’s treasury in 2004, triple its normal take.

Among the big losers have been American motorists, now paying about $3.30 for a gallon of gas. What’s more, the oil price spike has punished U.S. industry, costing America an estimated 1.2-million jobs. “Higher borrowing costs for business since the beginning of the Iraq war are bleeding manufacturing investment,” Palast adds.

Rising oil prices are an anomaly. The world’s petroleum reserves have doubled from 648 billion to !.2 trillion barrels in the past 25 years, Palast reports. According to free market laws of supply and demand, discovery of these immense new pools should cause prices to drop.

Big Oil’s interest is in “suppressing production,” Palast writes, stating “An international industry policy of suppressing Iraqi oil production has been in place since 1927.”