Adamant: Hardest metal
Friday, February 14, 2003

EDITORIAL: Maybe it is about oil

www.asahi.com

War on Iraq is sure to have an economic impact.

After the 1991 Persian Gulf War, the United States helped restore Kuwait's oil fields and U.S. oil companies thus gained influence there.

Tension is growing over the possibility of an attack on Iraq. In Europe, opposition to military action against Iraq probably stems from skepticism about the U.S. rush to war. Some skeptics suggest the war is intended to bring Iraq's oil interests under American control.

The U.S. line is that a war is necessary to get Iraq to give up its presumed weapons of mass destruction. We do not believe the United States would wage a war solely over oil interests. But it is also true that war would have a decisive impact on economic conditions that involve Middle East oil.

U.S. President George W. Bush's administration, which includes several people with ties to the oil industry, has begun to shift its diplomatic policy on natural resources. Especially striking has been the way the U.S. government has approached its relations with Saudi Arabia, long a central element of U.S. Middle East policy, since the Sept. 11, 2001, terrorist attack.

Since more than half the Sept. 11 hijackers hailed from Saudi Arabia, an anti-Saudi attitude has gained some ground in the United States. And Saudi Arabia's political regime is hardly a democracy. In the medium and long terms, there is no assurance of political stability in Saudi Arabia.

Iraq is a major oil producer, with the world's largest proven reserves after those of Saudi Arabia. If the United States could bring Iraq within its control, it could be less energy-dependent upon Saudi Arabia. After the 1991 Persian Gulf War, the United States helped restore Kuwait's oil fields and U.S. oil companies thus gained influence there. That could be another reason an attack on Iraq is assumed to be about oil.

The Council on Foreign relations, a New York-based think tank with considerable influence over U.S. foreign policy, recently published a report that points out Iraq's oil belongs to Iraqis and proposes a policy approach after Saddam Hussein that, among other things, advocates creation of an international organization with the Iraqis to restore and develop Iraq's oil fields.

One interpretation is that the authors of the council report, conscious of the suspicions the U.S. is intent on a war with Iraq over oil interests, specifically framed that proposal.

Countries with misgivings about war with Iraq also have oil interests in mind. Russia and China have oil-extraction contracts with Saddam Hussein's government. They are involved in dealing oil that Iraq exports under the United Nations economic sanctions. France is also negotiating with Iraq over oil-production rights.

Some critics go so far as to take the view that these countries would not continue to resist an attack if the United States were to promise to safeguard their oil interests in post-Saddam Hussein Iraq.

Such maneuvering over oil interests attracts world attention because of the volatility of the oil market. What had long been a buyer's market has become a seller's market. On the supplier's side, there are concerns about the political stability of such large-scale oil exporters as Saudi Arabia or Venezuela still under a general strike. On the buyer's side, China, with its rapid economic growth, has become a big oil importer.

Oil prices are already up. And if an attack upon Iraq is followed by a drawn-out war or the oil fields are destroyed, prices will inevitably soar dramatically, draining the world economy.

Does Japan, the world's largest oil importer, with dependence upon Middle East oil growing year after year, dare to sit on the sidelines over what to do about Iraq?

--The Asahi Shimbun, Feb. 13(IHT/Asahi: February 14,2003)

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