-Caveat Lector- http://www.zawya.com/Story.cfm?id=ZAWYA20021028054159&Section=Main&page=Home&channel=All%20Arab%20News&objectid=2A17E941-F5E0-11D4-867D00D0B74A0D7C
US takeover of Iraq spells economic ruin to Arabs 28 October 2002 Egyptian think tank frets oil issue LONDON: An American invasion of Iraq that leaves the US in control of the country’s oil would threaten Saudi Arabia and other Arab oil-producing states with financial ruin and the prospect of intensified social and political unrest, according to a recent report published by a leading Egyptian think tank. It estimates that the Arab oil-producing countries combined could end up losing as much as $78 billion in revenue per annum should the US use Iraq’s massive oil reserves to drive down world market prices to the levels that it deems optimal for its own economy. The report, written by Ahmed Assayed Naggar for the Al-Ahram Center for Political and Strategic Studies, assumes that Iraq’s oil is the “principal target” of the Bush administration’s plans to invade Iraq and install a client regime in power in Baghdad. Iraq officially has proven oil reserves of over 112 billion barrels, second only to Saudi Arabia’s and constituting 11 percent of the world total. The true figure could well be much higher, and there is enormous potential for new discoveries in the country, the report states. In contrast, America’s own reserves stand to be depleted within a decade at current rates of consumption, making it totally reliant on imports. Oil exporters like Britain and Norway also stand to become net importers by the end of the decade, with Russia and China following suit 10 years later, while Libya and Mexico expect to run out of oil by 2040. The only countries forecast to remain capable of continuing to export large quantities of petroleum well into the second half of the century are Iraq, Iran, Saudi Arabia and other Gulf Arab states as well as Venezuela. Naggar reasons that, as the world’s biggest energy consumer and oil importer by far, the US has an interest in keeping world oil prices “as low as possible for as long as possible,” and can therefore be expected to use the leverage at its disposal, including its military presence in the region, to that end. If it were to assume military and/or political control of Iraq via a client regime, the US would be “certain” to institute a big increase in the country ’s crude oil production as quickly as possible, so as to create a glut in the markets that triggers a price crash, and ensure that it continues producing oil at a level that keeps prices low thereafter. Iraq’s production and export capacity could be increased dramatically within a short period of time, and the country would thus effectively become the world’s swing producer. “That would spell the end of the Saudi era on the international oil market. A US-controlled Iraq would quickly overtake Saudi Arabia as the biggest producer and supplier of oil,” Naggar predicts. That would have “catastrophic financial consequences” for all the world’s major oil exporters, particularly those, like the Gulf states, whose economies are almost totally reliant on oil exports. Naggar states that the US has repeatedly indicated that it views the optimal world market price of oil as being in the range of $15 to $18 per barrel. Were it to call the political shots in Baghdad, it could achieve that with little difficulty. It may even become “tempted” to push prices lower, to levels just above those that would make the continued operation of high-cost oil fields in various parts of the world uneconomic. Oil prices currently stand at some $28 per barrel, and every $1 per barrel drop in the price slashes some $4 billion off America’s annual petroleum import bill. This means that if Washington manages to get prices down to within its preferred band, it stands to save between $40 billion and $52 billion annually. In other words, it would defray the estimated $100 billion cost of mounting an invasion of Iraq within a couple of years, the benefits accruing principally to its manufacturing industry, its transportation sector and airlines, and its military (a huge consumer of energy) as well as ordinary American consumers. For Arab oil producers, however, every $1 per barrel drop in oil prices translates into an annual loss of $6 billion in earnings or an annual loss of some $2.5 billion to $3 billion for Saudi Arabia alone. If prices were driven down to $15 per barrel, Arab economies would stand to sustain “shocking losses” amounting to a $78 billion decline in annual earnings from current levels. The Arab states in general and the oil producers among them in particular therefore have a vital interest in preventing a US invasion of Iraq, Naggar concludes in the report. Micheline Hazou, Special to The Daily Star © The Daily Star 2002 Article originally published by The Daily Star 28-Oct-02 <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. 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