The Prize

Democracy in Iraq? Fuck that. Oil’s what it’s all about. The Independent (01.07.07):

“Iraq’s massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days.

The US government has been involved in drawing up the law, a draft of which has been seen by The Independent on Sunday. It would give big oil companies such as BP, Shell and Exxon 30-year contracts to extract Iraqi crude and allow the first large-scale operation of foreign oil interests in the country since the industry was nationalised in 1972.”

Future of Iraq: The spoils of war

“The huge potential prizes for Western firms will give ammunition to critics who say the Iraq war was fought for oil. They point to statements such as one from Vice-President Dick Cheney, who said in 1999, while he was still chief executive of the oil services company Halliburton, that the world would need an additional 50 million barrels of oil a day by 2010. ‘So where is the oil going to come from?… The Middle East, with two-thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies,’ he said.”

This is the Iraqi half of the grand plan. Here is the Iranian half. LATimes (01.07.07):

“Iran’s oil industry has raked in record amounts of cash during three years of high oil prices. But a new U.S. campaign to dry up financing for oil and natural gas development poses a threat to the republic’s ability to continue exporting oil over the next two decades, many analysts say.”

U.S. puts squeeze on Iran’s oil fields

Yep. That’s the ticket. Strangle Iran slowly and make up the difference with Iraqi and Saudi production.

“If Iran were to suddenly stop exporting its 2.6 million barrels of oil a day, such as in the event of a military strike, world oil prices probably would skyrocket. But a gradual decline might be offset by other OPEC members, analysts say, particularly as Iraq increases its oil production and Saudi Arabia carries out plans for significant increases in its production capacity.”

This is a very big deal for Iran. “The efforts by the United States and its allies over the last few months to persuade international banks and oil companies to pull out of Iran threaten dozens of projects, including development of Iran’s two massive new oil fields that could expand output by 800,000 barrels a day over the next four years.”

There has been a fair degree of success. “‘Many European banks which had accepted financing some oil industries projects have recently canceled them,’ (Iran’s deputy oil minister for international affairs Mohammed Hadi) Nejad-Hosseinian said.”

“In addition, banks are no longer granting letters of credit for delivery of some supplies, ministry officials say. And as nations such as Japan begin to back out of Iran oil development under U.S. pressure, the government in Tehran is being forced to dig into its own reserve funds to get crucial new projects off the ground.”

Domestically, the Treasury and Justice Departments have put the word out. “Envoys from the Treasury Department have approached international banks and companies, reminding them of Iran’s record of financing militant Islamic organizations such as Hamas, in the Palestinian territories, and Hezbollah, in Lebanon, through the banking system and its defiance of U.N. resolutions on nonproliferation, and warning that investing in such a country may not be a good business risk.”

“Simultaneously, the Justice Department reportedly has opened investigations of several banks to determine whether investments in Iran violated U.S. sanctions laws. In late 2005, Dutch bank ABN Amro agreed to pay $80 million in fines stemming in part from improper transactions with Iran through its subsidiary in Dubai, United Arab Emirates.”

Hearing you loud and clear, boss. “UBS Bank and Credit Suisse of Switzerland recently announced they were suspending most new business with Iran, and British-based HSBC said it would no longer accept dollar transactions from within Iran.”

“‘Banks are constantly doing risk assessments about what kind of business they want to be involved in,” Stuart Levey, Treasury undersecretary for terrorism and financial intelligence, said in a telephone interview.”

If you know what I mean, you Jolly Banker, you.