TCS Daily

Dissecting a Slogan

By Hans H.J. Labohm - March 7, 2003 12:00 AM

'No Blood for Oil'. This is the slogan under which many protesters all over the world have marched against a possible or probable war against Iraq. It begs the question whether oil really does play such an important role as they are suggesting.

It is true that oil analysts keep a close watch on the world energy markets and Iraq's place in it, if only because Iraq, with its proven oil reserves of 112 billion barrels (11% of proven world oil reserves), ranks second after Saudi Arabia. Further exploration could increase this figure to 300 billion. But its current production is limited because of sanctions. Moreover, today Iraq's oil infrastructure is in a shambles, not only because of the impact of the first Gulf War but also as a result of the war between Iran and Iraq in the 1980s. Reconstruction of existing facilities will require billions of dollars. In the framework of the UN Food for Oil programme Iraq is allowed to export 2 million barrels per day. This is a very modest share of a daily total of 40 million traded on the world markets. This means that the world is presently not dependent on Iraq's oil. However, given its vast resources, a post-Saddam Iraq might play a more important role in the longer term. In the light of the depletion of existing oil wells elsewhere in the world, e.g. in the North Sea and Alaska, relatively cheap Iraqi onshore oil might offer a welcome substitute.

But does this mean that oil is the decisive factor or even an important consideration for countries as the US and Britain to go to war with Iraq? That is highly implausible. Neither politicians nor political commentators who are dealing with the Iraq issue seem to pay much attention to it. More importantly, however, is that the mindset of today's policy-makers is conditioned by the mores of the time, which forbid a large-scale sacrifice of human lives for material wealth, even if it takes the form of oil.

But perhaps cynics will dismiss this line of argument out of hand as highly naïve. What then about simple cost/benefit analysis? The easiest and cheapest way to obtain oil for now and many years to come is to just call off an eventual war with Iraq. It will be immediately followed by a steep decline in oil prices, which may trigger a worldwide economic recovery. Future supply of oil will be taken care of by the markets and the price mechanism, which have secured a steadily increasing flow of oil at remarkably stable prices (in constant dollars) for more than 120 years. And such despite a massive increase in consumption and a major shift of the control over natural resources from oil companies to oil producing states. The price hikes which have occasionally occurred were of political origin and always of a temporary nature.

What about the transatlantic (family) quarrels about Iraq? Does oil play a role in that context?

There is no disagreement about the final goal of any action against Iraq. All members of the Security Council voted last November for Resolution 1441, which demanded that Saddam Hussein should account for and relinquish all his biological, chemical and nuclear weapons programmes or face serious consequences. The difference is not about the ultimate target but the time Iraq should be given to comply with the resolution. This difference has led to a strong feeling of being betrayed among many Americans by what Secretary Rumsfeld called the 'old Europe' or the 'axis of weasels', mainly France and Germany. Americans reproach Europeans for being forgetful of US sacrifice, of which the thousands of crosses overlooking the beaches of Normandy still bear witness.

Although understandable, it is still too early to conclude that this resentment is justified. First of all, because France and Germany are only part of Europe or the European Union. A vast majority of the EU members and other European countries (18 to be precise) backs the US. Secondly, even the policies of Germany and France cannot be attributed to 'forgetfulness'. Gerhard Schröder was narrowly re-elected on a anti-war platform. In the light of Germany's history this is not all bad. In the not-so-distant past many generations of non-German Europeans have hankered for a peaceful Germany. But one should not forget that it was ultimately only the willingness to go to war by the Allied Powers which has turned Germany from war-monger into peacenik. However, it cannot be denied that its present mood of aloofness may exclude any movement for Germany, despite the candid discussion of the pros and cons of the current policy stance between Schröder and his foreign minister, Joschka Fischer, which has been described in the media as a 'shouting match behind closed doors'.

But France's position is different. It does not categorically exclude the use of military force. However, it has a gloomy view of the risks involved, because it believes that it might destabilise the political situation in the entire region. It also fears that it will trigger a strong reaction from Arab and Islamic public opinion (remember, there are 4-5 million Moslems living in France), which may give birth to a new generation of 'little bin Ladens'. At the same time, France does not reject the military option, if the inspectors should ultimately conclude that it is impossible for them to fulfill their mission in the face of Iraqi ill will and impediments.

So, what do we make out of this? Does oil play a role in the differences of view between a few EU members and the Bush administration? It is hardly plausible - a marginal role at most.

There is no doubt that, in their planning, decision-makers are compelled to take account of a vast array of factors and possible implications of their actions. They have to weigh the costs and benefits over a whole range of fields: military, political, social, and economic. In such an overall analysis, oil and the shape of future world oil supply cannot be ignored. But recognising this is a far cry from focusing on oil as the dominant driving force behind America's policy vis-à-vis Iraq.

What about the immediate future? It should be clear that over the past twelve years every diplomatic effort to force Saddam Hussein to comply with Security Council's resolutions has failed. One has to draw the line somewhere ... and stick to it. If not, one risks undermining one's own credibility. This does not only weaken or even destroy one's reputation on the current issue at stake but on all other issues which have to be faced in the future as well. This basic principle should be heeded, both by the Security Council and its individual members. Recent decision-making in the Council, however, has shown that many of its members rather shift the line than stick to it. This is a dangerous and irresponsible policy course.

A ruthless dictator, controlling a rogue state, possessing weapons of mass destruction and providing a safe haven with a whole range of modern amenities to terrorists, make up for a potentially explosive cocktail. Better defuse it when there is still time, in order to make the world safer... for everyone.

TCS Daily Archives