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JERUSALEM ISSUE BRIEF

Vol. 2, No. 30     30 June 2003


Iraq - A Source of Oil or a Quagmire for the U.S.?

Mordechai Abir


  • In an interview in Jordan on June 21, Iraq's acting oil minister, Thamir al-Ghadhban, said, "Restoration of the [Iraqi] oil industry will take some time, at least a year and a half." Currently, Iraq is producing about 500,000 barrels per day (b/d) from the old northern fields (Kirkuk) and only 300,000 b/d from the enormously rich southern (largely Rumeila) fields.

  • Saddam Hussein's loyalists and volunteers from several Arab countries are intensifying their attacks on American troops in (Sunni Arab-inhabited) central and northwestern Iraq every day. Installations essential for (American) rehabilitation of the Iraqi economy, such as the strategic oil pipelines, have become prime targets for anti-U.S. terrorists.

  • Arab analysts have been wondering why the Shi'a spiritual leaders, especially those who openly reject the continuous American presence and administration in Iraq, have not issued fatwas (religious edicts) calling upon their followers to rise against the foreign (infidel) conquest. The truth is that all Shi'a spiritual leaders realize that they need massive American/Western aid to rehabilitate their country.

  • The attacks on U.S. troops and Iraqi strategic installations are being carried out by members of Sunni parties like the Iraq Islamic Party and the pan-Islamic Hizb al-Tahrir, reinforced by jihad volunteers from other Arab countries. As long as the U.S. authorities in Baghdad lack sufficient military power to enforce pax-Americana in the country, guerilla warfare against the American presence and strategic assets in Iraq is likely to escalate.


Increasing Global Oil Inventories

OPEC (and non-OPEC) producers have repeatedly declared their satisfaction with current oil prices and that they do not intend to cut their output at the cartel's July 31 meeting, despite the projected decline in demand for OPEC's oil in the second and third quarters of 2003 (OPEC sources). Moreover, OPEC's decision on June 11, to keep its current quota and practically leave production as is (although Saudi Arabia has allegedly reduced its output from over 9.1 million barrels per day [b/d] to 8.4-8.5 million b/d), is helping to increase global inventories. This is especially true of the "Atlantic basin" stocks, which are rapidly approaching their 2002 levels, which were close to "average." However, U.S. inventories are rising slowly because America's demand for oil is rising partly due to tight natural gas supply.

OPEC's complacency can be attributed to oil prices remaining at about $30 a barrel and the cartel members' conviction that Iraqi oil is unlikely to become a factor in the market until the second half of 2004, if not later. In an interview with CNN, Paul Bremer, the U.S. "pro-consul" in Iraq, admitted that Iraqi oil production is recovering at a slower pace than originally projected. However, he claimed that it would reach 2.5 million b/d by the year's end.


When Will Iraqi Output be Restored?

Yet, OPEC and senior Iraqi officials are far less optimistic than Bremer. In an interview in Jordan on June 21, Iraq's acting oil minister, Thamir al-Ghadhban, said, "Restoration of the [Iraqi] oil industry will take some time, at least a year and a half." He also said, "We can regain most of it in six months...by December we will be able to produce around 2 million barrels a day." Asked when Baghdad would revive its crude exports from oil fields, al-Ghadhban said, "I hope next month." However, he declined to comment on the volume and precise date of the renewed exports (not from storage). Currently, Iraq is producing about 500,000 b/d from the old northern fields (Kirkuk) and only 300,000 b/d from the enormously rich southern (largely Rumeila) fields.

There are a few major factors contributing to the sluggish revival of Iraq's production and exports. The first is the two months of looting and sabotage of oil fields and oil installations due to American and British inability to provide the necessary security for Iraq's vast oil fields. Secondly, the delay in exporting oil from Iraq's fields is also the result of the total destruction of the K-3 pumping station in northwestern Iraq by allied bombing. This facility is crucial for transporting oil through the Kirkuk-Ceyhan (Turkey) pipeline. Finally, senior Iraqi oil executives recently stated that Iraq would be unable to repair the strategic pipeline which links the country's southern and northern oil fields, essential for Iraq's oil exports, before the end of 2003.


Intensifying Opposition to the U.S.

Saddam Hussein's loyalists and volunteers from several Arab countries are intensifying their attacks on American troops in (Sunni Arab-inhabited) central and northwestern Iraq every day. Installations essential for (American) rehabilitation of the Iraqi economy, such as the strategic oil pipelines, have become prime targets for anti-U.S. terrorists. The London-based, Islamist/nationalist (Palestinian) daily Al-Quds al-Arabi reported that pamphlets "signed [allegedly] by Saddam Hussein, who called upon the population to continue their armed resistance to the American occupation," were distributed in Iraq. Indeed, U.S. authorities in Baghdad admit that as long as Saddam Hussein is not apprehended, or killed, attacks on U.S. military and civilian personnel and other targets are likely to increase.

A June 20 Washington Post article discussed the growing frustration, if not demoralization, of American troops in Iraq (especially reservists) concerning their role as "post-war peacekeepers." Cognizant that they would not be able to defeat the 145,000-strong U.S. army in Iraq, this is exactly what the Saddam loyalists and Iraqi Islamists wish to achieve.

It has become quite evident that the acute need for additional forces to consolidate U.S. control in Iraq to stamp out terrorist attacks is hampering the Pentagon's ability to allow field troops to return home. In order to avoid dispatching additional American soldiers to Iraq, the U.S. requested members of the "coalition of the willing," largely Eastern European republics, to send about 20,000 troops to help support the U.S./UK forces in Iraq.

In the meantime, Iraqis from all ethnic groups are becoming increasingly frustrated by the U.S. military's endeavors to fight terrorism, and the slow (but rapidly improving) rehabilitation of the country's public services. The Iraqi opposition (to Saddam's regime) coalition strongly resents Paul Bremer's decision to ignore previous American pledges to establish an Iraqi transitional government chosen by members of the former opposition. They bitterly criticized Bremer's decision to maintain American control of Iraq with the help of an advisory council (25-30 Iraqi notables and specialists), whose "recommendations" can be ignored by the U.S. administration in Baghdad.


The Realism of the Shi'a Clergy

On June 21, 2-3,000 Shi'a supporters of several Shi'a clergymen held a relatively docile demonstration in front of the U.S. administration's compound in Baghdad, demanding an end to the U.S. occupation. This demonstration did not resemble a previous, more militant Shi'a event that took place a couple of weeks earlier, where the leading Shi'a clergy demanded a major role in the planned transitional Iraqi government. Indeed, Grand Ayatollah Ali Sistani and other leading Shi'a spiritual leaders do not see eye to eye with the Iran-supported Ayatollah Muhamad Baqr al-Hakim, the head of the Supreme Council for the Islamic Revolution in Iraq (SCIRI). Al-Hakim cooperates with the Iraqi National Congress (INC), but the U.S. authorities in Baghdad suspect that he wishes to eventually establish a Shi'a theocracy in Iraq.

Indeed, Grand Ayatollah Sistani and the majority of Iraq's Shi'a religious scholars are opposed to an Iran-type "velayet-e faqih" (governance by the clergy) and an active political role for Shi'a clerics. Although (seemingly) protesting the U.S. occupation and administration of Iraq, they consider such an administration a necessary evil, at least temporarily. Washington claims that SCIRI, which leads Shi'a opposition to the U.S., helped the infiltration of members of its Al-Badr brigades and Iran's Revolutionary Guards into Iraq. Indeed, on June 21, American commandos raided the offices of SCIRI in Baghdad (not encountering any resistance) and confiscated documents and computers belonging to the organization.

Arab analysts (Al-Hayat, Al-Sharq al-Awsat) have been wondering why the Shi'a spiritual leaders, especially those who openly reject the continuous American presence and administration in Iraq, have not issued fatwas (religious edicts) calling upon their followers to rise against the foreign (infidel) conquest. The truth is that all Shi'a spiritual leaders, including the Iranian-allied SCIRI and Grand Ayatollah Muhammad Al-Sadr's (allegedly killed by Saddam in 1998) Da'awa party, realize that they need massive American/Western aid to rehabilitate their country. In interviews published by the flourishing free press in Baghdad, they claimed that the time is not ripe for challenging Washington. In reality, they fear that if the U.S. were to leave Iraq before establishing a stable, widely based government, Iraq would deteriorate into a civil war and most likely disintegrate into several ethnic political units. Moreover, an American withdrawal from Iraq is likely to bring to the surface the deep rivalry between the different streams of the Shi'a majority population and lead to a bloody struggle between them.


Sunni Arab Opposition

Shi'a protestations in Baghdad are overshadowed by nearly daily demonstrations of Ba'ath loyalists and unemployed former (largely Republican Guard) soldiers and officials demanding employment or pensions. At their side, the growth in power of Islamic/nationalist Sunni Arab parties constitutes a more dangerous threat to the American presence in Iraq. Support for such parties, especially the Iraq Islamic Party, led by Iyad al-Samarai, and the pan-Islamic (radical) Hizb al-Tahrir (Liberation Party), led by Usama al-Takriti, in central and northwestern Iraq is rapidly growing. Both of those small veteran Sunni Arab parties existed legally at the side of Saddam Hussein's ruling Ba'ath party.

Some analysts believe that in addition to hard-core Ba'ath loyalists, the attacks on U.S. troops and Iraqi strategic installations are being carried out by members of Sunni parties like the Iraq Islamic Party and the pan-Islamic Hizb al-Tahrir, reinforced by jihad volunteers from other Arab countries. As long as the U.S. authorities in Baghdad lack sufficient military power to enforce pax-Americana in the country, guerilla warfare against the American presence and strategic assets in Iraq is likely to escalate.

Iraq's (formerly) privileged Sunni Arab population has a lot to lose from the establishment of a U.S.-supervised democracy in Baghdad. The country's Shi'a majority is no less apprehensive about the rise of a secular, pluralistic, pro-Western regime in Iraq. Indeed, the entire former Iraqi opposition's coalition component (INC), the Kurds included, resented Paul Bremer's recent statement that he does not intend to carry out the previously planned "democratic" elections prepared by the INC-selected leadership. Bremer said, "The Iraqis are still not ripe for such elections."

Clearly, Washington is unwilling to surrender Baghdad's government to a self-appointed Iraqi political-tribal leadership that, in order to win popular support, is likely to challenge U.S. patronage and control of Iraq's vast oil resources. Nor is Washington willing to risk the rise to power in Baghdad of an elected Shi'a clergy-dominated government, or a separatist Shi'a republic that (together with Iran's Islamist regime) could threaten the Persian Gulf region's stability and the flow of reasonably-priced oil to the industrial countries.

*     *     *

Mordechai Abir is a Fellow of the Jerusalem Center for Public Affairs and Professor (Emeritus) of Islamic and Middle Eastern Studies at the Hebrew University of Jerusalem. His books include Saudi Arabia: Society, Government and the Gulf Crises (1993) and Saudi Arabia in the Oil Era: Regime and Elites: Conflict and Collaboration (1988).


Dore Gold, Publisher; Lenny Ben-David, ICA Program Director; Mark Ami-El, Managing Editor. Jerusalem Center for Public Affairs (Registered Amuta), 13 Tel-Hai St., Jerusalem, Israel; Tel. 972-2-5619281, Fax. 972-2-5619112, Email: jcpa@netvision.net.il. In U.S.A.: Center for Jewish Community Studies, 1616 Walnut St., Suite 1005, Philadelphia, PA 19103-5313; Tel. (215) 772-0564, Fax. (215) 772-0566. Website: www.jcpa.org. © Copyright. The opinions expressed herein do not necessarily reflect those of the Board of Fellows of the Jerusalem Center for Public Affairs.

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