Quotation It is narrated by 'Abdullah ibn 'Amr that the Messenger of Allah said, "It is not allowed that three be in the open (during a journey) and that they do not make one of them their leader." - Abdullah ibn 'Amr   KCom Journal

<a href=www.khilafah.com>www.khilafah.com 01 Apr 2003

Although much of Dreyfuss’ analysis is grounded in sound information, we believe that his focus on America’s intervention in the Middle-East without considering the war against Islam and the pre-emptive strike on political Islam means it is only an explanation of a part of the entire political jigsaw. Despite this we feel it overall to be a good piece in exposing the age old US desire to colonise directly the region.

The Thirty-Year Itch

Three decades ago, in the throes of the energy crisis, Washington's hawks conceived of a strategy for US control of the Persian Gulf's oil. Now, with the same strategists firmly in control of the White House, the Bush administration is playing out their script for global dominance.

Robert Dreyfuss, Mother Jones Magazine, March/April 2003

If you were to spin the globe and look for real estate critical to building an American empire, your first stop would have to be the Persian Gulf. The desert sands of this region hold two of every three barrels of oil in the world -- Iraq's reserves alone are equal, by some estimates, to those of Russia, the United States, China, and Mexico combined. For the past 30 years, the Gulf has been in the crosshairs of an influential group of Washington foreign-policy strategists, who believe that in order to ensure its global dominance, the United States must seize control of the region and its oil. Born during the energy crisis of the 1970s and refined since then by a generation of policymakers, this approach is finding its boldest expression yet in the Bush administration -- which, with its plan to invade Iraq and install a regime beholden to Washington, has moved closer than any of its predecessors to transforming the Gulf into an American protectorate.

In the geopolitical vision driving current U.S. policy toward Iraq, the key to national security is global hegemony -- dominance over any and all potential rivals. To that end, the United States must not only be able to project its military forces anywhere, at any time. It must also control key resources, chief among them oil -- and especially Gulf oil. To the hawks who now set the tone at the White House and the Pentagon, the region is crucial not simply for its share of the U.S. oil supply (other sources have become more important over the years), but because it would allow the United States to maintain a lock on the world's energy lifeline and potentially deny access to its global competitors. The administration "believes you have to control resources in order to have access to them," says Chas Freeman, who served as U.S. ambassador to Saudi Arabia under the first President Bush. "They are taken with the idea that the end of the Cold War left the United States able to impose its will globally -- and that those who have the ability to shape events with power have the duty to do so. It's ideology."

Iraq, in this view, is a strategic prize of unparalleled importance. Unlike the oil beneath Alaska's frozen tundra, locked away in the steppes of central Asia, or buried under stormy seas, Iraq's crude is readily accessible and, at less than $1.50 a barrel, some of the cheapest in the world to produce. Already, over the past several months, Western companies have been meeting with Iraqi exiles to try to stake a claim to that bonanza.

But while the companies hope to cash in on an American-controlled Iraq, the push to remove Saddam Hussein hasn't been driven by oil executives, many of whom are worried about the consequences of war. Nor are Vice President Cheney and President Bush, both former oilmen, looking at the Gulf simply for the profits that can be earned there. The administration is thinking bigger, much bigger, than that.

"Controlling Iraq is about oil as power, rather than oil as fuel," says Michael Klare, professor of peace and world security studies at Hampshire College and author of Resource Wars. "Control over the Persian Gulf translates into control over Europe, Japan, and China. It's having our hand on the spigot."

Ever since the oil shocks of the 1970s, the United States has steadily been accumulating military muscle in the Gulf by building bases, selling weaponry, and forging military partnerships. Now, it is poised to consolidate its might in a place that will be a fulcrum of the world's balance of power for decades to come. At a stroke, by taking control of Iraq, the Bush administration can solidify a long-running strategic design. "It's the Kissinger plan," says James Akins, a former U.S. diplomat. "I thought it had been killed, but it's back."

Akins learned a hard lesson about the politics of oil when he served as a U.S. envoy in Kuwait and Iraq, and ultimately as ambassador to Saudi Arabia during the oil crisis of 1973 and '74. At his home in Washington, D.C., shelves filled with Middle Eastern pottery and other memorabilia cover the walls, souvenirs of his years in the Foreign Service. Nearly three decades later, he still gets worked up while recalling his first encounter with the idea that the United States should be prepared to occupy Arab oil-producing countries.

In 1975, while Akins was ambassador in Saudi Arabia, an article headlined "Seizing Arab Oil" appeared in Harper's. The author, who used the pseudonym Miles Ignotus, was identified as "a Washington-based professor and defense consultant with intimate links to high-level U.S. policymakers." The article outlined, as Akins puts it, "how we could solve all our economic and political problems by taking over the Arab oil fields [and] bringing in Texans and Oklahomans to operate them." Simultaneously, a rash of similar stories appeared in other magazines and newspapers. "I knew that it had to have been the result of a deep background briefing," Akins says. "You don't have eight people coming up with the same screwy idea at the same time, independently.

"Then I made a fatal mistake," Akins continues. "I said on television that anyone who would propose that is either a madman, a criminal, or an agent of the Soviet Union." Soon afterward, he says, he learned that the background briefing had been conducted by his boss, then-Secretary of State Henry Kissinger. Akins was fired later that year.

Kissinger has never acknowledged having planted the seeds for the article. But in an interview with Business Week that same year, he delivered a thinly veiled threat to the Saudis, musing about bringing oil prices down through "massive political warfare against countries like Saudi Arabia and Iran to make them risk their political stability and maybe their security if they did not cooperate."

In the 1970s, America's military presence in the Gulf was virtually nil, so the idea of seizing control of its oil was a pipe dream. Still, starting with the Miles Ignotus article, and a parallel one by conservative strategist and Johns Hopkins University professor Robert W. Tucker in Commentary, the idea began to gain favor among a feisty group of hardline, pro-Israeli thinkers, especially the hawkish circle aligned with Democratic senators Henry Jackson of Washington and Daniel Patrick Moynihan of New York.

Eventually, this amalgam of strategists came to be known as "neoconservatives," and they played important roles in President Reagan's Defense Department and at think tanks and academic policy centers in the 1980s. Led by Richard Perle, chairman of the Pentagon's influential Defense Policy Board, and Deputy Secretary of Defense Paul Wolfowitz, they now occupy several dozen key posts in the White House, the Pentagon, and the State Department. At the top, they are closest to Vice President Cheney and Defense Secretary Donald Rumsfeld, who have been closely aligned since both men served in the White House under President Ford in the mid-1970s. They also clustered around Cheney when he served as secretary of defense during the Gulf War in 1991.

Throughout those years, and especially after the Gulf War, U.S. forces have steadily encroached on the Gulf and the surrounding region, from the Horn of Africa to Central Asia. In preparing for an invasion and occupation of Iraq, the administration has been building on the steps taken by military and policy planners over the past quarter century.

Step one: The Rapid Deployment Force

In 1973 and '74, and again in 1979, political upheavals in the Middle East led to huge spikes in oil prices, which rose fifteenfold over the decade and focused new attention on the Persian Gulf. In January 1980, President Carter effectively declared the Gulf a zone of U.S. influence, especially against encroachment from the Soviet Union. "Let our position be absolutely clear," he said, announcing what came to be known as the Carter Doctrine. "An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force." To back up this doctrine, Carter created the Rapid Deployment Force, an "over-the-horizon" military unit capable of rushing several thousand U.S. troops to the Gulf in a crisis.

Step two: The Central Command

In the 1980s, under President Reagan, the United States began pressing countries in the Gulf for access to bases and support facilities. The Rapid Deployment Force was transformed into the Central Command, a new U.S. military command authority with responsibility for the Gulf and the surrounding region from eastern Africa to Afghanistan. Reagan tried to organize a "strategic consensus" of anti-Soviet allies, including Turkey, Israel, and Saudi Arabia. The United States sold billions of dollars' worth of arms to the Saudis in the early '80s, from AWACS surveillance aircraft to F-15 fighters. And in 1987, at the height of the war between Iraq and Iran, the U.S. Navy created the Joint Task Force-Middle East to protect oil tankers plying the waters of the Gulf, thus expanding a U.S. naval presence of just three or four warships into a flotilla of 40-plus aircraft carriers, battleships, and cruisers.

Step three: The Gulf War

Until 1991, the United States was unable to persuade the Arab Gulf states to allow a permanent American presence on their soil. Meanwhile, Saudi Arabia, while maintaining its close relationship with the United States, began to diversify its commercial and military ties; by the time U.S. Ambassador Chas Freeman arrived there in the late ‘80s, the United States had fallen to fourth place among arms suppliers to the kingdom. "The United States was being supplanted even in commercial terms by the British, the French, even the Chinese," Freeman notes.

All that changed with the Gulf War. Saudi Arabia and other Gulf states no longer opposed a direct U.S. military presence, and American troops, construction squads, arms salesmen, and military assistance teams rushed in. "The Gulf War put Saudi Arabia back on the map and revived a relationship that had been severely attrited," says Freeman.

In the decade after the war, the United States sold more than $43 billion worth of weapons, equipment, and military construction projects to Saudi Arabia, and $16 billion more to Kuwait, Qatar, Bahrain, and the United Arab Emirates, according to data compiled by the Federation of American Scientists. Before Operation Desert Storm, the U.S. military enjoyed the right to stockpile, or "pre-position," military supplies only in the comparatively remote Gulf state of Oman on the Indian Ocean. After the war, nearly every country in the region began conducting joint military exercises, hosting U.S. naval units and Air Force squadrons, and granting the United States pre-positioning rights. "Our military presence in the Middle East has increased dramatically," then-Defense Secretary William Cohen boasted in 1995.

Another boost to the U.S. presence was the unilateral imposition, in 1991, of no-fly zones in northern and southern Iraq, enforced mostly by U.S. aircraft from bases in Turkey and Saudi Arabia. "There was a massive buildup, especially around Incirlik in Turkey, to police the northern no-fly zone, and around [the Saudi capital of] Riyadh, to police the southern no-fly zone," says Colin Robinson of the Center for Defense Information, a Washington think tank. A billion-dollar, high-tech command center was built by Saudi Arabia near Riyadh, and over the past two years the United States has secretly been completing another one in Qatar. The Saudi facilities "were built with capacities far beyond the ability of Saudi Arabia to use them," Robinson says. "And that's exactly what Qatar is doing now."

Step four: Afghanistan

The war in Afghanistan -- and the open-ended war on terrorism, which has led to U.S strikes in Yemen, Pakistan, and elsewhere -- further boosted America's strength in the region. The administration has won large increases in the defense budget -- which now stands at about $400 billion, up from just over $300 billion in 2000 -- and a huge chunk of that budget, perhaps as much as $60 billion, is slated to support U.S. forces in and around the Persian Gulf. Military facilities on the perimeter of the Gulf, from Djibouti in the Horn of Africa to the island of Diego Garcia in the Indian Ocean, have been expanded, and a web of bases and training missions has extended the U.S. presence deep into central Asia. From Afghanistan to the landlocked former Soviet republics of Uzbekistan and Kyrgyzstan, U.S. forces have established themselves in an area that had long been in Russia's sphere of influence. Oil-rich in its own right, and strategically vital, central Asia is now the eastern link in a nearly continuous chain of U.S. bases, facilities, and allies stretching from the Mediterranean and the Red Sea far into the Asian hinterland.

Step five: Iraq

Removing Saddam Hussein could be the final piece of the puzzle, cementing an American imperial presence. It is "highly possible" that the United States will maintain military bases in Iraq, Robert Kagan, a leading neoconservative strategist, recently told the Atlanta Journal-Constitution. "We will probably need a major concentration of forces in the Middle East over a long period of time," he said. "When we have economic problems, it's been caused by disruptions in our oil supply. If we have a force in Iraq, there will be no disruption in oil supplies."

Kagan, along with William Kristol of the Weekly Standard, is a founder of the think tank Project for the New American Century, an assembly of foreign-policy hawks whose supporters include the Pentagon’s Perle (since resigned), New Republic publisher Martin Peretz, and former Central Intelligence Agency director James Woolsey. Among the group's affiliates in the Bush administration are Cheney, Rumsfeld, and Wolfowitz; I. Lewis Libby, the vice president's chief of staff; Elliott Abrams, the Middle East director at the National Security Council; and Zalmay Khalilzad, the White House liaison to the Iraqi opposition groups. Kagan's group, tied to a web of similar neoconservative, pro-Israeli organizations, represents the constellation of thinkers whose ideological affinity was forged in the Nixon and Ford administrations.

To Akins, who has just returned from Saudi Arabia, it's a team that looks all too familiar, seeking to implement the plan first outlined back in 1975. "It'll be easier once we have Iraq," he says. "Kuwait, we already have. Qatar and Bahrain, too. So it's only Saudi Arabia we're talking about, and the United Arab Emirates falls into place."

LAST SUMMER, Perle provided a brief glimpse into his circle's thinking when he invited rand Corporation strategist Laurent Murawiec to make a presentation to his Defense Policy Board, a committee of former senior officials and generals that advises the Pentagon on big-picture policy ideas. Murawiec's closed-door briefing provoked a storm of criticism when it was leaked to the media; he described Saudi Arabia as the "kernel of evil," suggested that the Saudi royal family should be replaced or overthrown, and raised the idea of a U.S. occupation of Saudi oil fields. He ultimately lost his job when rand decided he was too controversial.

Murawiec is part of a Washington school of thought that views virtually all of the nations in the Gulf as unstable "failed states" and maintains that only the United States has the power to forcibly reorganize and rebuild them. In this view, the arms systems and bases that were put in place to defend the region also provide a ready-made infrastructure for taking over countries and their oil fields in the event of a crisis.

The Defense Department likely has contingency plans to occupy Saudi Arabia, says Robert E. Ebel, director of the energy program at the Center for Strategic and International Studies (CSIS), a Washington think tank whose advisers include Kissinger; former Defense Secretary and CIA director James Schlesinger; and Zbigniew Brzezinski, Carter's national security adviser. "If something happens in Saudi Arabia," Ebel says, "if the ruling family is ousted, if they decide to shut off the oil supply, we have to go in."

Two years ago, Ebel, a former mid-level CIA official, oversaw a CSIS task force that included several members of Congress as well as representatives from industry including ExxonMobil, Arco, BP, Shell, Texaco, and the American Petroleum Institute. Its report, "The Geopolitics of Energy Into the 21st Century," concluded that the world will find itself dependent for many years on unstable oil-producing nations, around which conflicts and wars are bound to swirl. "Oil is high-profile stuff," Ebel says. "Oil fuels military power, national treasuries, and international politics. It is no longer a commodity to be bought and sold within the confines of traditional energy supply and demand balances. Rather, it has been transformed into a determinant of well-being, of national security, and of international power."

As vital as the Persian Gulf is now, its strategic importance is likely to grow exponentially in the next 20 years. Nearly one out of every three barrels of oil reserves in the world lie under just two countries: Saudi Arabia (with 259 billion barrels of proven reserves) and Iraq (112 billion). Those figures may understate Iraq's largely unexplored reserves, which according to U.S. government estimates may hold as many as 432 billion barrels.

With supplies in many other regions, especially the United States and the North Sea, nearly exhausted, oil from Saudi Arabia and Iraq is becoming ever more critical -- a fact duly noted in the administration's National Energy Policy, released in 2001 by a White House task force. By 2020, the Gulf will supply between 54 percent and 67 percent of the world's crude, the document said, making the region "vital to U.S. interests." According to G. Daniel Butler, an oil-markets analyst at the U.S. Energy Information Administration (EIA), Saudi Arabia's production capacity will rise from its current 9.4 million barrels a day to 22.1 million over the next 17 years. Iraq, which in 2002 produced a mere 2 million barrels a day, "could easily be a double-digit producer by 2020," says Butler.

U.S. strategists aren't worried primarily about America's own oil supplies; for decades, the United States has worked to diversify its sources of oil, with Venezuela, Nigeria, Mexico, and other countries growing in importance. But for Western Europe and Japan, as well as the developing industrial powers of eastern Asia, the Gulf is all-important. Whoever controls it will maintain crucial global leverage for decades to come.

Today, notes the EIA's Butler, two-thirds of Gulf oil goes to Western industrial nations. By 2015, according to a study by the CIA's National Intelligence Council, three-quarters of the Gulf's oil will go to Asia, chiefly to China. China's growing dependence on the Gulf could cause it to develop closer military and political ties with countries such as Iran and Iraq, according to the report produced by Ebel's CSIS task force. "They have different political interests in the Gulf than we do," Ebel says. "Is it to our advantage to have another competitor for oil in the Persian Gulf?"

David Long, who served as a U.S. diplomat in Saudi Arabia and as chief of the Near East division in the State Department's Bureau of Intelligence and Research during the Reagan administration, likens the Bush administration's approach to the philosophy of Admiral Mahan, the 19th-century military strategist who advocated the use of naval power to create a global American empire. "They want to be the world's enforcer," he says. "It's a worldview, a geopolitical position. They say, 'We need hegemony in the region.'"

UNTIL THE 1970s, the face of American power in the Gulf was the U.S. oil industry, led by Exxon, Mobil, Chevron, Texaco, and Gulf, all of whom competed fiercely with Britain's BP and Anglo-Dutch Shell. But in the early '70s, Iraq, Saudi Arabia, and the other Gulf states nationalized their oil industries, setting up state-run companies to run wells, pipelines, and production facilities. Not only did that enhance the power of opec, enabling that organization to force a series of sharp price increases, but it alarmed U.S. policymakers.

Today, a growing number of Washington strategists are advocating a direct U.S. challenge to state-owned petroleum industries in oil-producing countries, especially the Persian Gulf. Think tanks such as the American Enterprise Institute, the Heritage Foundation, and CSIS are conducting discussions about privatizing Iraq's oil industry. Some of them have put forward detailed plans outlining how Iraq, Saudi Arabia, and other nations could be forced to open up their oil and gas industries to foreign investment. The Bush administration itself has been careful not to say much about what might happen to Iraq's oil. But State Department officials have had preliminary talks about the oil industry with Iraqi exiles, and there have been reports that the U.S. military wants to use at least part of the country's oil revenue to pay for the cost of military occupation.

"One of the major problems with the Persian Gulf is that the means of production are in the hands of the state," Rob Sobhani, an oil-industry consultant, told an American Enterprise Institute conference last fall in Washington. Already, he noted, several U.S. oil companies are studying the possibility of privatization in the Gulf. Dismantling government-owned oil companies, Sobhani argued, could also force political changes in the region. "The beginning of liberal democracy can be achieved if you take the means of production out of the hands of the state," he said, acknowledging that Arabs would resist that idea. "It's going to take a lot of selling, a lot of marketing," he concluded.

Just which companies would get to claim Iraq's oil has been a subject of much debate. After a war, the contracts that Iraq's state-owned oil company has signed with European, Russian, and Chinese oil firms might well be abrogated, leaving the field to U.S. oil companies. "What they have in mind is denationalization, and then parceling Iraqi oil out to American oil companies," says Akins. "The American oil companies are going to be the main beneficiaries of this war."

The would-be rulers of a post-Saddam Iraq have been thinking along the same lines. "American oil companies will have a big shot at Iraqi oil," says Ahmad Chalabi, leader of the Iraqi National Congress, a group of aristocrats and wealthy Iraqis who fled the country when its repressive monarchy was overthrown in 1958. During a visit to Washington last fall, Chalabi held meetings with at least three major U.S. oil companies, trying to enlist their support. Similar meetings between Iraqi exiles and U.S. companies have also been taking place in Europe.

"Iraqi exiles have approached us, saying, 'You can have our oil if we can get back in there,'" says R. Gerald Bailey, who headed Exxon's Middle East operations until 1997. "All the major American companies have met with them in Paris, London, Brussels, all over. They're all jockeying for position. You can't ignore it, but you've got to do it on the QT. And you can't wait till it gets too far along."

But the companies are also anxious about the consequences of war, according to many experts, oil-company executives, and former State Department officials. "The oil companies are caught in the middle," says Bailey. Executives fear that war could create havoc in the region, turning Arab states against the United States and Western oil companies. On the other hand, should a U.S. invasion of Iraq be successful, they want to be there when the oil is divvied up. Says David Long, the former U.S. diplomat, "It's greed versus fear."

<a href=www.menafn.com>NewsStand - Monday, March 31, 2003 Agence France-Presse LONDON, March 31 (AFP)

LONDON, March 31 (AFP) - Stock markets slumped in Asia and Europe on Monday, while the dollar tumbled and oil and bond prices rose on growing concerns about how the war in Iraq is unfolding.

Markets shuddered at a warning from US Secretary of Defense Donald Rumsfeld over the weekend that "the most dangerous and difficult days are still ahead of us," in stark contrast to the upbeat US comments heard at the start of the war.

Dealers also took fright at a boast by authorities in Baghdad that thousands of Arab volunteers were primed for suicide missions against coalition forces, after a suicide bomber killed four US soldiers over the weekend.

"With the Iraq campaign likely to be longer, and more expensive, than some initially hoped, equity investors have adopted a more sombre attitude," said Nomura Securities strategist Anais Faraj.

"The rally since March 12 looks to be from the same stable as the other squeezes that have punctuated the three-year bear market," he added.

On European markets, the British FTSE 100 index dropped 2.3 percent to 3, 624.7 points, the German DAX 30 lost 2.9 percent to 2,447.5 points and the French CAC 40 gave up 3.3 percent to 2,642.7 points in early trading.

The stock market rout started in Asia, where some major markets, including Hong Kong and Singapore, were also laid low by the rapid spread of the deadly virus Severe Acute Respiratory Syndrome (SARS), which hit aviation and tourism stocks.

Stocks in Japan and South Korea both plunged 3.71 percent, with Tokyo's Nikkei 225 down 307.45 points at 7,972.71 points and Seoul's composite index down 20.63 points at 535.70.

"The war does not seem to be developing as planned," said Masafumi Okamoto, a dealer at Jyujiya Securities in Tokyo.

"There are growing fears that the war will last longer than expected. Investors cannot buy stocks actively amid such fears," he said.

Rising concerns about the progress of the war in Iraq also pounded the dollar, allowing the single European currency to rally to a two-week high of 1. 0898 dollars from 1.0783 late on Friday in New York.

The dollar fell to 118.90 yen from 119.75 on Friday.

"The dollar has been undermined against the euro and the yen by the belief that war in Iraq will be prolonged and complicated," said Derek Halpenny, economist at Bank of Tokyo-Mitsubishi.

"The suicide attack that killed four US soldiers with a promise of more to come and the news that an attack (by ground forces) on Baghdad may not take place for weeks has fuelled this belief," he added.

Oil prices edged up slightly here on concerns about disruption to supplies from Iraq and Nigeria, which has been shaken by civil unrest.

The price of reference Brent North Sea crude oil for May delivery rose 20 cents per barrel from the previous closing to 26.55 dollars in early trading.

"There is still enough oil coming from Saudi Arabia and even Venezuela to keep the market supplied, but with Iraq out and the conflict in Nigeria still continuing the market is tightly balanced," said Deutsche Bank analyst Adam Sieminski.

Gold prices rose, with the spot price on the London Bullion Market up 3.7 dollars from the previous closing price at 335.55 dollars.

Bond prices gained. The yield on the 10-year German government bond dropped six basis points, or 0.06 percentage points, to 4.06 percent. Bond yields and prices move in opposite directions.

Reuters, 03.30.03, 11:28 PM ET By Tanya Pang

SINGAPORE, March 31 (Reuters) - Oil prices ticked higher on Monday as missiles pounded Baghdad for the 12th day and renewed violence at the weekend continued to keep about 40 percent of Nigeria's crude production off the market.

U.S. light crude climbed 30 cents to $30.46 a barrel, while London's Brent crude rose one cent to $26.36 a barrel.

Dealers said prices were expected to head higher in the near term as uncertainty remained on how long the U.S. campaign to oust Iraqi President Saddam Hussein would last and when Iraq would be able to resume exporting crude oil.

Also clouding the picture was a new bout of political violence at the weekend in the oil city of Port Harcourt in Nigeria's Niger Delta, where clashes between tribal factions has shut in more than 800,000 barrels of the country's daily output of a little over two million barrels per day.

"We are expecting a range of $33 to $36 for U.S. crude for this week and next week. War is looking like it will take one to two months, maybe even longer, and there's the Nigerian problem," said Tetsu Emori at Mitsui Bussan Futures in Tokyo.

"I don't see any bearish factors right now, we cannot be bearish in this market," he said.

Sydney-based oil analyst Simon Games-Thomas said U.S. crude was likely to test $34 a barrel.

"The market is trying to stabilise as the war unfolds. On balance, I remain tentatively bullish at this stage... I think that we should again test $34," Games-Thomas said in a note.

Oil has been rising since December when an anti-government strike disrupted supplies from the world's fifth-biggest exporter, Venezuela, and Washington stepped up a campaign to disarm Iraq of weapons of mass destruction, threatening to use force if necessary.

U.S. crude, which hit a 12-year peak at $39.99 in late February, has averaged $33.79 in the first three months this year, more than $12 or 56 percent higher than in the first quarter of 2002 and 29 percent above the 2002 average of $26.15.

A fresh wave of missiles hit Baghdad on Monday as U.S. and British forces intensified the air war on the Iraqi capital and mounted a sustained series of bombings on the city's outskirts where Republic Guard units are believed to be dug in.

Early expectations of a quick and easy war in Iraq, which denies that it possesses illegal weapons, have faded as U.S. and British forces have met firm Iraqi resistance leading to a rise in the casualty tally.

Washington last week ordered another 100,000 troops to move to the Gulf region.

NIGERIA UNION SHORTENS STRIKE

The OPEC producers' cartel has ramped up production to counter shortfalls in supplies from Venezuela earlier this year and more recently Iraq.

Baghdad's exports of about 1.7 million bpd ground to a halt in the run up to the U.S.-led war on March 20. It continues to send small volumes of oil via pipeline from its northern fields to the Turkey's Mediterranean port Ceyhan, but no tankers are loading the crude.

Nigeria's main trade union, Nigeria Labour Congress (NLC), said on Saturday it had modified a previous call for an indefinite strike beginning on Tuesday and would limit the walkout to three days.

Output in Africa's biggest producer has already been cut by almost 40 percent as foreign companies shut operations in the Niger Delta because of bloody clashes between rival tribes.

An indefinite strike by the NLC over pay would have likely reduced production further as many public sector workers from the blue-collar oil union NUPENG would be included in the action.

John Odah, NLC secretary-general, said the strike would run for three days, Tuesday until Thursday, and also be limited to public sector workers.

He said the strike might resume after presidential and local elections scheduled to be held from April 12 to May 13 if the government did not implement a promised 12.5 percent pay increase for civil servants.

Web

How does Scotland feel about the Iraq conflict? To find out, Alan Crawford sampled public opinion in one of the capital's streets

Venture beyond the hubbub of the High Street to the far end of South Bridge. There, with Old College on your right and a sex shop to your left, your journey into the capital's views on Iraq can begin.

Nicolson Street, leading into Clerk Street and its neighbour South Clerk Street, is rich in ethnic diversity, with a large transient student population. It is one of the capital's most vibrant thoroughfares, if fairly down-at-heel. And it's probably the best place to start when you're looking for a sample of opinions from across our near multi-racial society.

In Black Medicine Caf?, Manuela Mancini, a student from Rome, was more than willing to condemn the US and UK for their actions in Iraq.

'It's just bringing more death. They're masquerading as a noble war but they're just out to get more power,' she said.

Behind her, Lisa McIlwraith, a doctor from New Zealand working in Edinburgh, thought the allies' stated motives for invading Iraq, to rid the country of weapons of mass destruction and topple Saddam's regime, were disingenuous.

'It's to do with control of oil and not humanitarian issues, although that might be a positive outcome of the war,' she said. She believed Tony Blair was supporting Bush to try and bring a moderating influence to bear. 'Bush is essentially quite a dangerous man,' she said. 'While I don't agree with Blair, I do feel he's more concerned about people, the UN and the world.'

Up the street, near the Royal College of Surgeons, Dr Pyare Lal was unconvinced by the prime minister's arguments.

'This is an unneccessary war. It's not justified because it's not backed by a United Nations resolution. I think President Bush had already decided a long time ago he was going for Iraq, ' he said.

Lal, a surgeon originally from India, who trained in Edinburgh and now lives in London, said the military action looked like becoming a 'messy war'. 'The consequences will be more terrorists and more instability in the world.'

Adrian Stalker, principal solicitor with Shelter, remained undecided on the morality of waging war on Iraq, but added: 'I think it's going to get worse before it gets better.'

He did have a degree of trust in Blair's judgement, arguing that Tony Blair must have information suggesting British lives would be at risk without military action.

'That's certainly not the view of the people I work with,' he added.

Further south, outside the Empire Bingo hall, a couple of tattooed workmen had plainly not spent much time deliberating the conflict. 'I'm no bothered as long as it stays in Iraq,' one shrugged.

Across the street, in the RB Food Store, Mahmood Shahid had a stack of Stop the War leaflets by the till. 'I feel war is no solution. The proper way is to sit down and talk because this war is no good for anyone.'

Into Clerk Street, charity shops dominate and the street seems dirtier. John Raeburn, of Edinburgh, emerged from the Southside Community Centre and pronounced the war 'terrible'. 'They shouldn't be there. In the end Bush'll not give it over to the UN. He'll run it for a few years and fill tankers and tankers of oil.'

In De Niro's restaurant, chef Pedro Tang, from Venezuela, was angry at the anti-war protestors: 'People in this country should support the troops. If someone would ask me, I would fight against Saddam Hussein.' He pointed out that some 70% of Venezuelans live in poverty but the country is the fifth largest oil producer. 'We've got a guy there now, he's like a bloody communist.'

The road widens again in South Clerk Street and the shops become smarter. Doing up a shopfront are Edinburgh boys -- 'born and bred, like' -- Wayne Shennan, James Cameron and Nicky Sullivan.

'I'm all for it,' said Shennan. 'They should have been in there straightaway.'

'They've got to be up to something,' added Sullivan. 'But it was all sold to him by the British. I think the Arab league of nations should have more to do with it.'

<a href=www.sfgate.com>Verne Kopytoff, Chronicle Staff Writer Saturday, March 29, 2003

Exports of crude oil from Iraq's southern oil fields are expected to begin by June after crews remove booby traps, extinguish well fires and fix outdated equipment, according to a British commander.

The remarks by Air Marshal Brian Burridge, who leads British forces in Iraq, are the most detailed yet about restarting Iraq's oil industry under a U. S.-led coalition.

He said that getting the fields to produce at full capacity of 1.8 million barrels a day will cost $1 billion in equipment upgrades. He did not elaborate on where those funds would come from.

Since the Persian Gulf War ended in 1991, Iraq's oil infrastructure has been only marginally maintained and needs extensive repairs.

"These oil fields are critical to the future reconstruction and prosperity of Iraq," Burridge said Thursday in a statement from U.S. Central Command headquarters in Qatar.

Plans call for using money generated by Iraq's vast oil reserves to rebuild the country after the war and feed its people. Burridge said that future crude exports will be made under the U.N. oil-for-food program.

Under the program, the United Nations oversees Iraqi oil sales and holds the proceeds in an escrow account to buy products such as food and medicine. The system, implemented in 1996, ground to a halt just before the current war began.

On Friday, the U.N. Security Council voted to allow Kofi Annan, the organization's secretary-general, to manage the humanitarian portion of the oil-for-food program for the next 45 days. Details about oil sales, however, have yet to be worked out.

The debate over selling Iraqi oil promises to be divisive between supporters and opponents of the war in the United Nations. Bitter disputes will almost certainly arise over who represents Iraq's oil industry if Saddam Hussein is still in power, possibly causing delays in getting exports to the world market, analysts said.

Iraq's northern fields remain intact and continue feeding a pipeline to Ceyhan, Turkey, on the Mediterranean coast. However, no tankers have picked up oil there for more than a week. The northern fields remain under the control of Hussein's forces.

According to Burridge, British forces have secured southern Iraq's principal oil field, Rumailah, and are sweeping the area of munitions and booby traps. He said that three well fires have been extinguished by firefighters, leaving six others still burning.

Under the past U.N. program, oil from the southern fields was loaded on tankers from Mina al-Bakr, a rig in the Persian Gulf. On-land security is, therefore, less of an issue.

However, minesweepers must clear the waterways for tankers, and forces must ensure that ships aren't attacked by missile or from boats. It's unclear whether banks would offer oil companies lines of credit to operate in such conditions, analysts said.

Lt. Col Gene Pawlik, a spokesman for the U.S. Army Corps of Engineers, which oversees Iraqi oil field operations, was more circumspect than Burridge about the resumption of Iraqi oil exports. Pawlik said U.S. crews have inspected Iraq's southern oil fields but haven't done any detailed analysis of what needs to be done.

Security in the area remains tenuous, Pawlik said. He added that continued fighting in the area might delay the resumption of exports beyond three months.

"As far as our last report, we haven't been able to get in and examine the Iraqi infrastructure to know how long it would take to get the fields running again," Pawlik said. "If there is active combat going on, we may not be able to go in, no matter how long it takes."

Kevin Saville, managing editor for Platt's, an energy information service in New York, said: "I don't think anybody has an accurate grip on how long it's going to take. The way it's going now, it will probably be months rather than weeks."

The situation is clouded, Saville said, by the possibility that U.S. forces will still be laying siege to Baghdad for several months. Government officials haven't said whether they would still try to export Iraqi oil from the south with war still raging a couple of hundred miles north.

Lichtblau said the world can live without Iraqi oil. Saudi Arabia has said it will make up for the loss in Iraqi oil by producing more, although production disruptions due to unrest in Nigeria and Venezuela are causing oil prices to be higher than they would be under normal conditions.

"The idea that it may take three months isn't frightening," Lichtblau said. "If it's just a questions of Iraqi oil not being available, the market can deal with it."

E-mail Verne Kopytoff at vkopytoff@sfchronicle.com.