Control of Oil Revenues

While widespread ransacking was happening in Iraq after Baghdad fell, the U.S. moved swiftly to secure the country’s oil facilities. But in the months since the official end of the war, general looting and sabotage have impeded even the oil industry, frustrating efforts to quickly return oil production to prewar levels.

As of early July, the future of Iraq’s oil is still a matter of speculation. Rehabilitating oil facilities and preparing the ground for an expansion of output will take time. Current projections are that because of widespread looting, it will take 18 months just to return to prewar production levels of 3 million barrels per day. [Neela Banerjee, “Barrels of Oil Exported for the First Time Since the War,” New York Times, June 23, 2003]

The U.S. will has broad control over the Iraqi oil industry, principally by means of a Development Fund for Iraq, into which all of Iraq’s oil export revenues, all funds left over from the UN’s “oil for food” program, and all assets of the former Iraqi government located anywhere in the world are to be transferred. With such broad control, U.S. corporations are well posed to reap enormous profits and control of the oil industry.

Pre-War Promises

“American oil companies will have a big shot at Iraqi oil,” says Ahmad Chalabi, leader of the Iraqi National Congress (and current member of the Iraqi Governing Council)
[Dan Morgan and David B. Ottaway, “In Iraqi War Scenario, Oil Is Key Issue,” Washington Post, September 15, 2002.] “The American undersecretary of commerce, Grant Aldonas, told a business forum hungry for good economic news that a war in Iraq ‘would open up this spigot on Iraqi oil, which certainly would have a profound effect in terms of the performance of the world economy for those countries that are manufacturers and oil consumers.’”
[Michael Moran and Alex Johnson, “Oil after Saddam: All bets are in,” MSNBC, November 7, 2002.] “We will make sure that Iraq’s natural resources are used for the benefit of their owners, the Iraqi people”

— President George W. Bush [Speech at the Azores Islands, 16 March 2003.] Head of the Coalition Provisional Authority, Paul Bremer, commented “As Iraq began shipping crude oil today for the first time since the start of the war, the U.S. administrator of the country broached the politically sensitive issue of how oil revenue should be spent, proposing that some of the money be shared with Iraqis through a system of dividend payments or a national trust fund to finance public pensions.
“Iraq’s resources cannot be restricted to a lucky or powerful few,” Bremer said. “Iraq’s natural resources should be shared by all Iraqis.”