Tuesday, August 26, 2008

The U.S. Foreign Policy as it is Driven by the Oil in the Middle East

This paper is intended to give the reader knowledge and some understanding of the US foreign policy; however it is TOTALLY PROHIBITED to copy or reproduce for personal or academic purposes.
The author; Izabella Safiyeva
If you need more information please write to this blog and you will be directed to the author of the paper.


Izabella Safiyeva
The U.S. Foreign Policy as it is Driven by the Oil in the Middle East
Operation AJAX. Operation Anabasis. Operation Iraqi Freedom.

Introduction

The current war in Iraq and the reasons why we are there are not novel; the U.S. has developed a behavior pattern that can be traced back throughout the second half of the 20th century, moreover, the similarities between the 2003 invasion and the 1953 coup d’etat in Iran are too crucial to be overlooked. After the September 11th attacks on the World Trade Center and the Pentagon, but prior to 2003 Iraqi invasion, the Bush administration spoke vehemently of the imminent threat of the weapons of mass destruction (WMD) that Saddam Hussein has in his arsenal. That and the links to Al Qaeda, qualified the Hussein regime for a preemptive strike.
The events of the 1953 coup in Iran that toppled the democratic government of Dr. Mohammed Mossadeq and the 2003 invasion of Iraq illustrate a few of very distinctive U.S. foreign policy characteristics. The U.S. State Department will use its force, and justify its covert actions with the pretexts of national security. Since the U.S. government is naturally aligned with big business, the foreign policy that is projected abroad especially toward the Middle East, a region where oil rules, the corporate interests of U.S. multi-nationals will be the first ones to be upheld.
[1]
This leads to a very firm bottom line: the U.S. foreign policy in the Middle East was and is driven by private interests, mainly by the corporations that are after the oil in Persian Gulf. The 2003 invasion of Iraq, the speedy removal and execution of Saddam Hussein resembles the 1953 coup in Iran in which the U.S. in partnership with Britain changed regimes in order to put a stop to the disruption of the oil production which was hurting their corporate interests. Although the war in Iraq is still in progress and has no end in sight (i.e. no timeline for the troop withdrawal), the track record of the U.S. foreign policy in the Middle East illustrates that the U.S. government is driven by its corporate interests.

Prior to the invasion, the American leaders were creating uproar and claming that democracy is vital and that Iraq has no democracy and its people are oppressed by the dictator with horrible human right abuses. Moreover, the Bush administration claimed that Iraq has WMD and the thereat of that called for a preventative war, even though the intelligence agencies lacked concrete evidence. Themes of democracy, the breach of human rights and WMD were mere pretexts to enter into the territory of Iraq as the means to go after the oil that is underneath.
In order to fully comprehend the mentality of the U.S. State Department in its conduction of such flawed approach to foreign policy, we have go back in time to trace the root causes that led to the 1953 coup in Iran. The 1953 covert undertaking will serve as a backdrop in history and it will lead to a greater understanding of the war in Iraq.

Emerging Nationalism in Iran: late 1940s, early 1950s

In 1949 a strong sense of nationalism was emerging in Iran and soon thereafter Shah Mohammad-Reza Pahlavi and his loyal royalist supporters were on the brink of losing their power. Opposition was rising from radical parties; on the left there was the Tudeh Party, a group driven by communist ideology. On the right there were the religious factions opposing any secular developments and foreign influence that was so predominant in the county. Among the religious factions, Fedaiyan-e Eslam was the important given the fact that as part of their activities, the group had assassinated a prominent secularist and historian Ahmad Kasravi. [2]
Somewhere in the middle, there were numerous liberal, anti-royalist and nationalist groups with leaning to the left. In the vast array of literature Dr. Mohammad Mossadeq is regarded as an inherent and idealistic leader who in 1949 united these groups under one banner of the National Front. Mossadeq had popular support for his famous stand to have Iran set free from foreign economic exploitation, elimination of corruption and aim for transparency in the government. One of the most distinguishing characteristics that the National Front strived for was insuring that no one would be above the constitution, not even the Shah.

According to the historical account outlined in The History of Iran, the National Front moved quickly to accomplish their nationalist agenda which consisted of taking care of the country’s most valuable natural resource – oil:

Mossadeq and the small but vocal minority of National Front members soon found an explosive political issue that put the shah on the defensive. They denounced a proposed revision of the 1933 Agreement[3] with the Anglo-Iranian Oil Company (AIOC) and began to demand the termination of the concession and nationalization of the company. This idea had almost universal appeal in Iran, including the approval of the religious groups and the Tudeh, which enabled the National Front members to use popular pressure in the streets to compensate for the numerical weakness in the Majles[4] (Daniel, 149).

On February 19, 1951 Mossadeq, as a chair of the special committee in the Majles recommended to move forward and completely nationalize the British owned Anglo-Iranian Oil Company (AIOC). Less then a month later, on March 15, the Majles and the Senate passed the nationalization bill into law. It is critical to highlight the significance of nationalizing of the key natural resource under the leadership of Mossaddeq; nationalization of oil was a political expression in search for a fair royalty payment that the people and the country of Iran truly deserved and what the British refused to provide.

Nationalization of oil, which meant Iranian takeover of the Anglo-Iranian Oil Company and the murder of Ali Razmara, the Prime Minister of the day caused utter chaos. Daniel goes on to chronicle the events following in an already chaotic atmosphere; Hosayn Ala, Razmara’s successor could not control the situation and resigned soon after taking his new post. A conservative judge at the Majles, suggested making Mossadeq as the new Prime Minister since he was the one who introduced the oil nationalization bill into legislation and turned out to have a successful outcome.

Mossaddeq accepted the offer and Majles moved quickly to have the Shah officially make the appointment and sign the new Prime Minister into office. On April 29, 1951 the Shah accepted Mossaddeq and signed the nationalization bill on May 2. At that point, exercising his new gained authority, Mossaddeq renamed the Anglo-Iranian Oil Company into the National Iranian Oil Company.

One can only imagine how furious the British were to lose the Anglo-Iranian Oil Company, forcefully cease their operations and be expelled from Iran. The British took this matter up to the International Court of Justice at The Hague, says Daniel in his book. To the dismay of the British, in July of 1952, the court ruled that it lacked jurisdiction and advised for the parties involved to work on a settlement. But Britain was not giving up just yet; they asked the United Nations Security Council to intervene. Sadly for the British, Mossaddeq was able to eloquently communicate to the Security Council in New York that the issue was a private matter, not a thereat to peace and in no shape or form did it require UN action.

Daniel concludes his account of this chapter in The History of Iran with British determination to continue this battle with the new and unruly Prime Minister Mossaddeq. Since the British were out of luck in gaining the support in the international community, they employed the tactic of economic pressure that proved to be quite successful. Included in the economic pressures put on Iran were boycott, blockade and finally the embargo of the Iranian oil. Frozen accounts in the British banks and denial of any attempts of attaining a loan were also implemented. And finally, even that oil that the Iranians were able to produce, they could not sell it; Britain was acting on its claim that the oil was now contraband, and seized the cargoes on the high seas.

Operation AJAX

Stephen Kinzer, the author of All the Shah’s Men: An American Coup and the Roots of Middle East Terror explains the British fury when Mossaddeq nationalized the oil industry in 1951. For the British, the AIOC was a jewel in the imperial crown; the concession of these particular fields was particularly valuable because of the low production costs. The sale of the cheaply produced Iranian oil meant a doubled margin of profit. This business allowed the British to rise to the status of a world power. Safeguarding the status meant maintaining their hegemony in the region as well as on the world arena.

Backtracking The History of Iran for moment, Daniel explains that the profits derived from the AIOC were crucial to the suffering postwar European economy; the profits reaped from the sale of oil maintained British national economy afloat. Furthermore, the taxes paid by the AIOC were one of the biggest sources of income Britain had at the time. [5]

Mossaddeq was stubborn and not particularly savvy in economics; it cannot be stressed enough how highly depended Iran was on the sale of the oil. In 1952, Mossaddeq, was still unwilling to cut a deal with the British and rejected a settlement that was endorsed by both Churchill and Truman. It was at this time that the British became fond of the idea to remove Mossaddeq once and for all. [6]

Nurturing the idea of overthrowing Mossaddeq were the British agents in Iran. But in October of 1952, Mossaddeq found out that there is a plan to topple him. Soon thereafter he ordered to shut down the British embassy and expelled everybody working undercover. No one was left to stage the coup. The British government turned to the U.S. asking for assistance, but President Truman refused, reasoning that he does not want the CIA to participate in such activities. [7]
The people of Iran and more precisely the same groups of supporters that helped Mossaddeq come to power were now dissatisfied with the economic hardships affecting them as a result of the national oil policy. Faster and faster, the support for Mossaddeq was deteriorating; he made even more enemies by enforcing several domestic policies that were aimed at reducing the military.

Coming back to Kinzer, the author describes the atmosphere that led the British to use coercive means to get back their concession of the Persian oil. It was at this time that the British considered launching an armed invasion, but decided otherwise after weighting possible outcomes, specifically after considering the Soviet involvement that would follow. Besides, as it was mentioned earlier, the U.S. ally President Harry Truman, was not fond of the idea of the armed invasion and refused to get involved.

The luck of the British turned for the better when in November of 1952, Dwight Eisenhower became President. Truman and Eisenhower had different views on the issue with Iran; as the history would have it, Eisenhower was more receptive to the use aggression and force in Iran, provided that he would be approached in right way and the threat would be tailored to the American fears. Kinzer, writes about the special approach the British used to rally Eisnehower for his support. In making their pitch to Eisenhower, the British took a shrewd approach:
Within days of the election, a senior agent of the Secret Intelligence Service, Christopher Montague Woodhouse, came to Washington for meetings with top CIA and State Department officials. Woodhouse decided not to make the traditional British argument, which was that Mossaddeq must go because he had nationalized British property. That argument did not arouse much passion in Washington. Woodhouse knew what would (Kinzer, 65).

In his diary he later wrote “I decided to emphasize the Communist threat to Iran rather than the need to recover control of the oil industry[8].” Woodhouse came to the U.S. right in time for administration change and change of the people who would direct the American foreign policy. John Foster Dulles, the incoming Secretary of State and Allen Dulles, his brother, the incoming CIA director were among the fiercest opponents of communism and perceived it as direct threat to the U.S. In the view of the Dulles brothers, Iran was especially dangerous because of its geopolitical location and the border that it shared with the Soviet Union. The fact that Mossaddeq was a radical nationalist Prime Minister enhanced the Dulles brothers’ perception that Iran is in need of a regime change.

The British were successful at tailoring the threat of Iran to the American ideological fears; the pretext of communism worked and the Dulles brothers were on board. Following that, Prime Minster Churchill and President Eisenhower who took office on January 20, 1953 authorized the execution of the coup. Kinzer goes on to write that in February of the same year allied intelligence agencies, the CIA and the MI6 moved to cooperate in the removal of Mossaddeq; they code-named the coup Operation AJAX. Kermit Roosevelt, the grandson of President Theodore Roosevelt was chosen as the director, due to his significant experience in the agency.
After Eisenhower, Churchill and of course the Shah allowed for the covert operation to take place, Mossaddeq was about to come under intense protests and domestic unrest. The CIA was unleashing all of its tricks in Iran and the paid operatives contributed in bringing down Mossadddeq. Those Iranians who were in opposition to Mossaddeq before him coming to power, worked tirelessly to gather likeminded individuals who shared the same goal. Kinzer illustrates the depth of collaboration that it took in Iran to topple Mossaddeq; politicians, military officers, clergymen, newspapers editors and street gangs all participated to undermine the radical Prime Minister.

Anti-Mossaddeq activities intensified during the spring and summer of 1953, when CIA paid religious leaders, newspaper editors and politicians to publicly denounce their nationalist Prime Minister. By accounts of Richard Cottam, one of the CIA’s employees on the ground, four-fifths of the Iranian newspapers were under CIA influence.[9]

In early August, the capital of Teheran was erupting in protests; crowds of people paid by the CIA marched through the streets carrying portraits of the Shah thereby expressing their royalist affiliations. On August 16, 1953 the Shah officially dismissed Mossaddeq and appointed General Fazlollah Zahedi, a retired military officer as the new Prime Minister. Kinzer and Daniel, both are keen to point out that Zahedi had received more than $100,000 for his new post from the CIA. [10]

After the coup, the British and Americans accomplished their goal; they ultimately removed Mossaddeq and put pro-Western Zahedi in his place. Mossaddeq was arrested, tried by a military tribunal, found guilty of treason and sentenced to three years in prison. He spent the rest of his life under house arrest, until he died in 1967.

The British rejoiced after seeing the fruits of their labor come to life; the new Zahedi government jumped to resolve the oil issue with the AIOC. In 1954, an agreement was negotiated which allowed foreign companies to produce and market the Persian oil. The British could not have been happier, not only did they get their holdings back, but they also received compensation. Moreover, the agreement divided the production of oil among the international members.[11] As a reward for such pro-Western stand and anti-communist policy, the U.S. aid to Iran increased almost instantaneously.

The U.S. State Department and its Role in the Oil of the Middle East

The role of the American government in Persian Gulf dates back to the early 1920s, however, the government did not directly interfere in the business; but it was acting on the interests of the U.S. corporations. By the end of the World War I, the majority of the world’s oil need was provided by the U.S. companies drilling in Mexico. At this time in history, there was a global spike in demand which led to a mild shortage of oil. “Fears that the world was running out of oil brought a drive by the U.S. government to assist U.S. companies in gaining control over foreign sources of supply” (Fusfeld, 690).

Stephen Pelletiere, the author of America’s Oil Wars asserts that it was right before the start of the Depression in the 1930s when an American company, Standard of California went into Bahrain and Saudi Arabia and came out with a finding of an astonishing amount of oil that it could not market by itself. That forced the Standard of California to look for a partner and found a match in another American company, the Texas Co. The new partnership produced a merger under the name of California-Arabian Standard Oil (CASOC).

The CASOC had some problems after running into opposition from the Cartel.[12] The company needed assistance and called in on the U.S. government to help them. The State Department ceased the opportunity, got involved and even considered the possibility of buying the company; an arrangement that would make it similar to the British owned AIOC. After careful consideration the U.S. government decided not to buy the company, but the Jersey and New York Standard became interested. Finally, CASOC was saved by combining California, Texas, New Jersey and New York and making it the biggest corporation as of yet. The latest merger became to be known as the Arab-American Oil Co. (ARAMCO) (Pelletiere, 42).

In the book Musaddiq, Iranian Nationalism, and Oil, dedicated solely to the issue that seems to be timeless, an internal position paper that was obtained from the State Department argues that the U.S. needs to conduct is foreign policy in the way that would insure control of oil concessions of in the Middle East. The paper dated December 1, 1943 advises that the fullest possible production in the regions of the Middle East needs to take place under the control of both the American and British counterparts. “The instrument of policy decided upon by the State Department in 1943 was an Anglo-American Petroleum Commission to regulate post-war Middle Eastern oil production for the benefit of all concerned” (Anderson, 152).

Such favorable policies enforced by the U.S. government propelled American corporations in going after the oil; at the start of World War II, the U.S. companies were in control of 42 percent of the reserves in the Middle East (Fusfeld, 690).

However, the course of actions was slightly altered by the end of WWII, at which point that the State Department distanced itself form directly assisting the U.S. corporations because the emphasis the Middle East oil undermined and alienated the independent domestic producers in Texas. Nevertheless, the State Department continued to guide the private interests in the direction that would be in sync with and benefit the national interest.

Old habits are hard to break, so by the early 1940s, the government was once again becoming more assertive in its expression of the U.S. foreign policy in the Middle East:

In October 1943, James Byrnes, then director of the Office of War Mobilization, wrote a letter to President Roosevelt decrying the fact that Britain controlled all of Iran’s oil. According to Byrnes, the government should request the British to assign the United States one-third of their interest in Iranian oil as a compensation for American contributions to the war effort. Althought the President took no action on this recommendation, it was clear that the United States had an eye on Iranian oil.[13]

Following the government mentality, the American interests only intensified after the 1953 coup. After the dust had settled, the U.S. corporations insisted on sharing what was previously exclusively a British concession. Pelletiere notes that the U.S. corporations presented a clever argument, saying that it would be inappropriate to give the full concession rights back to the British - not after what happened. So the U.S. corporations reasoned that it would only make sense to entirely restructure the production of the region.
[14] Such argument served as a good bargaining chip, plus, the U.S. needed to be reimbursed after such successful execution of the coup which toppled the oil nationalizing Mossaddeq.

Operation ANABASIS, Iraq

Before going on to discuss the details of Operation Anabasis, a quick, but important note should be made; James A. Bill, the author of the essay “America, Iran and the Politics of Intervention, 1951-1953”
[15] reports that the 1953 coup that staged by the CIA was well known to in Iran, but less so in America. As a matter of fact, the 1953 coup and the U.S. involvement in it was omitted from the American public, and it wasn’t until the Iranian Revolution in 1979 that Americans were slowly begging to learn about the role of their government in that historic coup. Aside from an occasional magazine article or a book specifically on the history and the work of the CIA, information about Operation AJAX was tough to find.

The fate of the Operation Anabasis falls in the same pattern; this is not an exaggeration, but while searching for the term in scholarly sources or in the mainstream media no information was to be found. In a local library, tucked far away, stood a book written by two investigative journalists, Michael Isikoff and David Corn; Hubris: The Inside Story of Spin, Scandal, and the Selling of the Iraq War. The authors uncover incriminating inside information that was nowhere to be found before, or otherwise denied in public.

To reiterate on the point further, a Lexis-Nexis search for Operation Anabasis turned up only one short article[16] by the British Guardian – a book review of Hubris. At the fear of being dismissed as succumbing to conspiracy theories, but it seems that the American corporate media completely ignored the finding of this book, if not to say banned the book from getting the deserved attention.

According to Isikoff and Corn, George W. Bush had it in his plans to go to war with Iraq practically the moment he took office. After the September 11th attacks on the Pentagon and the World Trade Center, planning for a covert operation was kicked into high gear. The operation that was being cooked up by the CIA was the most guarded, top secret in the U.S. government. A project of such high degree of importance was given to two extremely experienced men in the Iraq Operations Group; the first officer was a Cuban American named Luis, the second officer was John Maguire, a former cop from Baltimore.

Beginning in late 2001, Maguire and Luis were busy tailoring a plan that would ultimately topple Saddam Hussein, the same way was Mossaddeq in 1953. In excerpt from their book, Isikoff and Corn reveal an almost identical coup that was previously orchestrated by the CIA:
Anabasis was no-holds-barred covert action. It called for installing a small army of
paramilitary CIA officers on the ground inside Iraq; for elaborate scheme to penetrate
Saddam’s regime, recruiting disgruntled military officers with buckets of cash; for
feeding the regime disinformation about internal dissent in ways that would cause
Saddam to lash out (most likely through mass executions); for disrupting the regime
finances and supply networks; for sabotage that included blowing up railroad lined and
communication towers; and for targeting the lives of key regime officials. It also
envisioned staging phony incident that could be used to start a war. A small group of
Iraqi exiles would be flown into Iraq by helicopter to seize an isolated military base near
the Saudi border. They then would take to the airwaves and announce a coup was under
way. If Saddam responded by flying troops south, his aircraft would be shot down by
U.S. fighter planes patrolling the no-fly zones established by UN edict after the first
Persian Gulf War. A clash of this sort could be used to initiate a full-scale war. [17]

In order to proceed with the covert operation, on February 16, 2002, President Bush signed the authorization for implementation of various elements of Anabasis. By the fall of 2002, preparation for the eventual execution of the Operation was in full swing; the CIA set up a training camp in the Nevada desert. Needless to say, the existence of the camp on American soil that consisted of Iraqi nationals training to destabilize and weaken Hussein’s regime was the most protected secret in the U.S. government. The Scorpions, as the group was later named was taught how blow up buildings, power lines, and conduct raids.
[18]

From the inception of the operation, the two officers, Luis and Maguire projected that the covert understating which included sabotage, assassinations and disinformation would only undermine Hussein’s regime. Operation Anabasis, with all its bells and whistles could not be expected to get rid of the tyrant; for a complete regime change a military invasion was necessary. President Bush, Vice President Cheney and commander of the U.S. Central Command, General Tommy Franks understood what it takes to accomplish a regime change which is why plans for the 2003 invasion were under works. This leads to one final point about Operation Anabasis, in the eyes of the administration officials, the operation was in no way substitute for the invasion, no matter how successful the outcome could have been. Operation Anabasis was only the first step; it preceded the looming invasion which expected to eliminate Hussein at the root (Isikoff and Corn, 11).

But it wasn’t meant to be for the CIA trained Scorpions; the teams that were prepared to start the war by seizing the Iraqi air base, by 2003 were reduced to assistants of the U.S. commanders. General Franks called off the operation because he did not want it to interfere with his military plans. (Isikoff and Corn, 211).

Operation Iraqi Freedom

In the case of Operation Anabasis, Hubris, uncovered and exposed information that was previously unseen and unheard of. However, the book does not stop there; it points out things that do not seem to be out of the ordinary, but on the second thought are quite extraordinary because of what they have come to mean in the recent years. The authors shed light on are the January 2003 State of the Union speech given by President Bush in which he was making his final pitch prior to the invasion. In his speech the President claimed that Hussein presents a grave thereat to our national security because of his possession of the weapons of mass destruction (WMD), and the arsenal of chemical and biological weapons. In addition, Hussein was depicted as a heinous, democracy-crushing tyrant with even more horrendous human rights abuses which included his infamous gassing of the Kurdish population.

Just a month later, on March 19, 2003 President Bush ordered an air strike outside Baghdad, the intelligence provided alleged that Hussein would be at the compound. The intelligence was proved to be wrong, ironically enough, flawed intelligence would become the norm in the war in Iraq; hours later, Hussein was alive and making a speech on Iraqi TV about what had happened.
Flawed intelligence, or complete lack there of, in addition to the failure to provide evidence of the alleged threats that Hussein’s regime possessed is thoroughly explored in the book by Christopher Scheer, Robert Scheer, and Lakshmi Chaudhry – The Five Biggest Lies Bush Told Us About Iraq. Divided in five chapters, the authors dedicate one chapter to each lie that President Bush told the American public and the world. Before it turned out to be a lie, the thought that Al Qaeda had ties to Iraq was used to rally support during the pre-war marketing stages.

As part of their marketing plan of the 2003 Iraqi invasion, the Bush administration assured the public that Hussein has chemical, biological and nuclear weapons. It was the second week of April since invading Iraq, and still no weapons of any sort were found. That turned out to be the second and third lies as they are discussed in The Five Biggest Lies Bush Told Us About Iraq.
The fourth lie that the Bush administration entertained themselves with, as well as the rest of the world was the thought that the war in Iraq would be easy; in fact it would be a “cakewalk.” Ken Adelman was the first to insure that the American military will have it easy in Iraq when he wrote it in the Washington Post on February 13, 2002. [19]

The fifth and the final lie as presented by the authors, is that the U.S. invaded Iraq with only the best interest in mind, which was to bring democracy to the oppressed Iraqis. The American government felt obligated to spread the joy of democracy to the rest of the world, especially to the oil rich Iraq.

It’s All About Oil.

Peter Dale Scott in his article “Bush’s Deep Reasons for War in Iraq: Oil, Petrodollars, and the OPEC Euro Question,”[20] argues that the real reasons for the war in Iraq are about its vast oil reserves and desire of the U.S. corporations to come back into the fields they once lost after Hussein nationalized the industry in 1972.

In his meticulous review of the internal and undisclosed documents, Scott argues that the Bush administration was focused on the oil in Iraq ever since taking office. Under significant influence from the Task Force report, the government officials along with the executives of the major U.S. corporations[21] agreed to increase investment in the under-developed fields as part of the post-war expansion of the oil production.

In his essay, Scott touches on another reason for going into Iraq; the U.S. was protecting the dollar hegemony, especially after some OPEC[22] countries expressed the desire to make a switch from dollars into euros. Trading oil in euros would mean that all oil importing countries, including the U.S. would need to fill up their reserves with euros instead of dollars, and purchase oil in euros, not dollars. Another prominent figure in the field of energy and the author of Petrodollar Warfare: Oil, Iraq and the Future of the Dollar, William R. Clark made it his thesis in an internet essay that the primary reason the U.S. is currently at war with Iraq is because Hussein, as a major member of the OPEC, dared to make a switch from dollars to euros in late 2000.

Clark argues that reason why the U.S. acted so dramatically (2003 invasion) was for the purpose of sending a message to other OPEC countries which thought about making the currency switch as well. Iran for example, also pondered on the idea, but rebuffed when the value of the euro went down in 2000. Hussein dug his own grave when he decided to make a switch to petroeuro.
What is even more interesting is the fact that this information pertinent to the biggest oil-consumers - the American public, was only shown once in October of 2000. It seems that the U.S. corporate media, once again interrupted the free flow of information, as it did in 1950s. However, there was even bigger event went entirely unreported in the media – “from 2001 up until the 2003 invasion, U.S. petroleum conglomerates were paying for Iraq’s oil in euros – not dollars” (Clark, 118).

Protecting the dollar value is critical for the U.S. economy because of its role as a reserve currency. The whole concept of petrodollars goes back to 1974, when the U.S. made a secret deal with Saudi Arabia to sell the OPEC oil only in dollars. As part of the deal, the OPEC dollars would then be invested in the U.S. banks and thus recycled back into the U.S. economy.

In his original essay, Clark insisted that, by far, the biggest reason the U.S. removed Hussein was to insure reversal of petroeuros back to petrodollars. In addition, U.S. occupied Iraqi oil fields would not longer be contracted to foreign firms, as was promised by Hussein. Before Hussein was toppled, he signed contracts with the French TotalELF, Russian Lukoil and the Chinese Sin-oil companies[23]. Judging from what we know today, the 2003 American led invasion accomplished what it set out to do; it undid the foreign contracts and reversed transaction currency back to the dollar.

“…we are an empire trying to reaffirm our position as the world’s only superpower…it is simply to install a pliant puppet-regime that will align itself with U.S. corporate interests, mainly to revert to petrodollar recycling and award Iraq’s oil contracts only to U.S. and U.K. companies” (Clark, 119). Control of the Iraqi oil fields would not be possible without a current puppet government that the U.S. took so long to construct. In a recent New York Times article,[24] Andrew E. Kramer writes about the deals that Iraqi Oil Ministry already awarded to four Western oil companies; that is in addition to the original companies[25] that operated in Iraq before nationalization of the industry took place which are all vying for no-bid contracts.

The Iraqi government depicted its decision to give contracts to Western companies solely based on the issue of modern technology and expertise. Furthermore, the Iraqi government cites the companies’ dedication of providing free advice two years before the talks of contracts even started.

Media as a Mouthpiece

In his book, Clark also attributed a great deal of responsibly of the favorable coverage leading up to the Iraq invasion to the U.S. corporate media. The media aired unfiltered government messages that were more reminiscent of propaganda than anything else. When it came to reporting on the war on terror, those in opposition, even the politicians were denounced as unpatriotic.

There is an inherent problem with American model of media ownership; 90 percent of all media is owned by five companies.[26] Throughout the 2003 advertising and public relations campaign targeted at the American public, virtually all media outlets ran the same pretexts for invading; Hussein has an arsenal full of chemical and biological weapons, in addition to the WMD. He also presents the thereat of nuclear proliferation. Hussein is directly linked to Al Qaeda, he was behind the September 11th attacks. The Bush administration propaganda efforts successfully worked into scaring the American people into thinking that Hussein, really did present a major thereat to their national security.

Throughout the pre-war campaign, the American public was bombarded with Hussein’s terrible human rights record, mainly the problems that he had with the Kurds. The corporate media took into consideration its own special interests and neglected to report on attention worthy aspects of the relationship between the U.S. and the Middle East. The U.S. media never reported on Hussein’s switch to euro, which was the biggest catalyst that propelled the move toward the invasion.

Clark makes a good point by saying that if American people want to know what really going on in terms of their government’s foreign policy, then they must look elsewhere. Foreign news outlets such as the British Observer reported on the petrodollar/petroeuro speculation before the war started. To be fair to the American media, Clark acknowledges that on June 5, 2003 the Financial Times briefly brought up that Iraqi oil sales at the international markets will be going back to dollars. [27]

Conclusion

When it comes to the relationship between America and the Middle East, and oil, the U.S. foreign policy has shown time and time again that it acts under the influence of its corporations. The U.S. government works closely with the private sector, directs these private interests in the right direction and when necessary aggressively invades under the pretext of national security.
The role that the State Department plays in the oil of the Middle East cannot be emphasized enough. The U.S. government will use its influence to make sure that the American corporations get their deals, if not; the government will utilize aggression and force, and at the end of the day it will get what it wants.

The 1953 coup d’etat in Iran that toppled Prime Minister Mossaddeq, shares a host of similarities with the 2003 Iraqi invasion. Both incidents were orchestrated and executed with the help of the CIA. In the eyes of the American administrations, both incidents were morally justified because they threatened national security. In 1953, during the McCarthy era and the Red Scare, the British were shrewd in the way they tailored Iran as a communist threat to the U.S.

The real issue in 1953 was the fact that Prime Minister Mossaddeq nationalized the oil industry in 1951 which caused the Anglo-Iranian Oil Company to cease its very profitable operations in the Persian Gulf. In order to get back to their business, the British asked for the U.S. support in removing Mossaddeq and installing a pro-Western Prime Minister who would allow for his country and the people to be exploited and underpaid. Soon thereafter, the CIA was working on Operation AJAX. The operation was successful. The British got what they wanted, and as part of the deal the American oil corporations were able to acquire 40 percent of the original concession.
In the 2003 invasion of Iraq, the Bush administration desperately wanted to liberate the people of Iraq and bring democracy to the region that has never seen. The American people were scared into believing that Hussein had WMD, a stockpile of chemical and biological weapons that is in addition to his nuclear ambitions. However, not many people know this but in 2002, the CIA was once again setting up covert operation to destabilize and weaken regime of Saddam Hussein. Operation Anabasis, although never implemented, its objective was to provoke Hussein into lashing out as a way to start a full-scale war. True reasons for war were of course the oil fields that Iraq is sitting on.

The 2003 war in Iraq could have been avoided, if it was not for Hussein’s move, as a major member in the OPEC, to make switch in the sale of oil from dollars to euros in the late 2000. That move greatly angered the U.S. government because the U.S. dollar is tied as reserve currency. If all oil importing countries were to buy oil in euros and not in dollars that would significantly weaken the U.S. currency. The Bush administration was not going to let that happen.

It has been five years since the U.S. invaded Iraq. At the moment, the U.S. troops are still occupying Iraq, and the Bush administration refuses to come up with a plan for the troop withdrawal and shuts down any attempts by others to do so. Such reckless actions by the Bush administration have contributed to the declining domestic economy. Moreover, and strain the budget has been devastating, and deficit keeps on growing.

Regarding the Iraqis, their fate is still unknown, and it is hard to be optimistic. Although there a couple of things are definite; the war ravaged country and people will need years, if not decades for the socio-politico-economic situation would stabilize. A whole generation of Iraqis will grow up in the land of uncertainty and instability.

Despite the American corporations finally getting their hands on Iraqi oil fields, it would be years before our domestic gas prices at the pump would start to come down, if ever. It could be argued that the future on domestic issues remains grim; it is still a hardship for Americans to curb their oil consumption. The laws of demand and supply are becoming more relevant each day, as more developing countries[28] need energy for their booming economies. The global demand for oil is increasing, while the supply is dwindling. The solution for the energy crisis lies in the search for alternative fuels and energy. Finally, the U.S. needs to come up with an energy policy that would not infringe on other nation’s natural resources and that would not undermine the sovereignty of other countries.

Works Cited
Anderson, Irvine H. “The American Oil Industry and the Fifty-fifty Agreement of 1950.”
Musaddiq, Iranian Nationalism and Oil. Eds. James A. Bill and WM. Roger Louis. Austin, TX: University of Texas Press, 1988. 143-163.

Bill, James A. “America, Iran and the Politics of Intervention, 1951-1953.” Musaddiq, Iranian
Nationalism and Oil. Eds. James A. Bill and WM. Roger Louis. Austin, TX: University of Texas Press, 1988. 261-296.

Borger, Julian. “War on Terror: Book says CIA tried to provoke Saddam to war.” Rev. of
Hubris: The Inside Story of Spin, Scandal and the Selling of the Iraq War by Michael
Isikoff and David Corn. The Guardian. September 7, 2006. 18

Clark, William R. Petrodollar Warfare: Oil, Iraq and the Future of the Dollar. Canada: New
Society Publishers, 2007.

Daniel, Elton L. The History of Iran. Westport, CT: Greenwood Press, 2001.

Fusfeld, Daniel R., Economics: Principles of Political Economy, Third Edition. Glenview, IL:
Scott, Foresman and Company, 1988. 688-699.

Isikoff, Michael and Corn, David. Hubris: The Inside Story of Spin, Scandal and the Selling of
the Iraq War. New York: Random House, 2006.

Kramer, Andrew E. “Deals With Iraq Set to Bring Oil Giants Back” The New York Times.
6/19/08.
http://www.nytimes.com/2008/06/19/world/middleeast/19iraq.html?pagewanted=print

Kinzer, Stephen. All the Shah’s Men: An American Coup and the Roots of Middle East Terror.
Hoboken, NJ: John Wiley & Sons, 2008.

Majd, Mohammad Gholi. Great Britain & Reza Shah: The Plunder of Iran, 1921-1941.
Gainesville, FL: University Press of Florida, 2001.

Pelletiere, Stephen. America’s Oil Wars. Westport, CT: Praeger Publishers, 2004.

Scheer, Christopher., Scheer, Robert., Chaudhry, Lakshimi., The Five Biggest Lies Bush Told Us
About Iraq. Canada: Independent Media Institute, 2003.

Scott, Peter Dale. “Bush’s Deep Reasons for War on Iraq: Oil Petrodollars, and the OPEC Euro
Question.”
http://inguish.berkley.edu/~pdscott/iraq.html.%205/27/03.

Rampton, Sheldon & Stauber, John. Weapons of Mass Deception: the uses of Propaganda in Bush’s War on Iraq. New York, Penguin: 2003

[1] During the 20th century, five major U.S. corporations dominated the oil industry: Exxon, Mobil, Standard Oil Company of California, Texaco and Gulf.
Daniel R. Fusfeld, Economics: Principles of Political Economy, Third Edition. (Glenview, IL: Scott, Foresman and Company, 1988) 688-699.
[2] Elton L. Daniel, The History of Iran, (Westport, CT: Greenwood Press, 2001) 148.
[3] The 1933 Agreement allowed for the AIOC to receive a 30 year extension of its concession, and reduce the royalty payments to the lowest possible level. The Shah forced the Iranian negotiators to accept the terms and conditions proposed by the AIOC. The agreement takes advantage of the Iran’s ineffective bargaining abilities, especially when the prices for oil increased and the cost of production and refining decreased.
Mohammad Gholi Majd, Great Britain & Reza Shah: The Plunder of Iran, 1921-1941, (Gainesville, FL: University Press of Florida, 2001) 257.
[4] Majles is a legislative body, recognized by the Iranian constitution of the 20th century; however it does fully act as an autonomous national parliament due to the restraint put on it either by the royal power or the concern to be in conformity with the Islamic laws and values.
Elton L. Daniel, The History of Iran, (Westport, CT: Greenwood Press, 2001) 148.
[5] The British government owned 56 percent of the AIOC stock which made it quasi-arm of the state.
Stephen Pelletiere, America’s Oil Wars (Westport, CT: Praeger Publishers, 2004) 39.
[6] Elton L. Daniel, The History of Iran, (Westport, CT: Greenwood Press, 2001)
[7] Stephen Kinzer, All the Shah’s Men: An American Coup and the Roots of Middle East Terror, (Hoboken, NJ: John Wiley & Sons, 2008) 61
[8] Stephen Kinzer, All the Shah’s Men: An American Coup and the Roots of Middle East Terror, (Hoboken, NJ: John Wiley & Sons, 2008) 69
[9] Stephen Kinzer, All the Shah’s Men: An American Coup and the Roots of Middle East Terror, (Hoboken, NJ: John Wiley & Sons, 2008) 73
[10] The new Prime Minster Zahedi held the office until 1955.
Elton L. Daniel, The History of Iran, (Westport, CT: Greenwood Press, 2001) 154
[11] The 1954 agreement allocated 40% of production to the British owned Anglo-Iranian Oil Company, 40% to American companies and the remaining 20% to European companies.
Elton L. Daniel, The History of Iran, (Westport, CT: Greenwood Press, 2001) 156

[12] Cartel, a group of similar independent companies who join together to control prices and limit competitionfrom Cambridge Advanced Learner's Dictionary http://dictionary.cambridge.org/define.asp?key=11656&dict=CALD
[13] James A. Bill. “America, Iran and the Politics of Intervention, 1951-1953.” Musaddiq, Iranian Nationalism and Oil. Eds. James A. Bill and WM. Roger Louis. (Austin, TX: University of Texas Press, 1988) 261-296.
[14] For complete percentage breakdown see,
Stephen Pelletiere, America’s Oil Wars (Westport, CT: Praeger Publishers, 2004) 49.
[15] James A. Bill. “America, Iran and the Politics of Intervention, 1951-1953.” Musaddiq, Iranian Nationalism and Oil. Eds. James A. Bill and WM. Roger Louis. (Austin, TX: University of Texas Press, 1988) 261-296.
[16] Julian Borger. “War on Terror: Book says CIA tried to provoke Saddam to war.” The Guardian. September 7, 2006. 18
[17] Michael Isikoff and David Corn. Hubris: The Inside Story of Spin, Scandal and the Selling of the Iraq War. (New York: Random House, 2006) 8.
[18] For a detailed description on the operations of the Scorpion team, see
Michael Isikoff and David Corn. Hubris: The Inside Story of Spin, Scandal and the Selling of the Iraq War. (New York: Random House, 2006) 153-168.
[19] Christopher Scheer, Robert Scheer, Lakshimi Chaudhry. The Five Biggest Lies Bush Told Us About Iraq. (Canada: Independent Media Institute, 2003) 117.
[20] Peter Dale Scott. “Bush’s Deep Reasons for War on Iraq: Oil Petrodollars, and the OPEC Euro Question.”
http://inguish.berkley.edu/~pdscott/iraq.html.%205/27/03.
[21] The major U.S. corporations include: Halliburton, Schlumberger, Exxon Mobil, Chevron Texaco, Conoco Phillips. Originally reported by the Wall Street Journal, mentioned in the article by Peter Dale Scott.
[22] Organization of the Petroleum Producing Countries (OPEC) established in 1960. The member countries are: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela.
http://www.opec.org/library/FAQs/aboutOPEC/q3.htm
[23] William R. Clark. Petrodollar Warfare: Oil, Iraq and the Future of the Dollar. (Canada: New Society Publishers, 2007) 98.
[24] Andrew E. Kramer. “Deals With Iraq Set to Bring Oil Giants Back” The New York Times. 6/19/08.
http://www.nytimes.com/2008/06/19/world/middleeast/19iraq.html?pagewanted=print
[25] The original companies in the Iraq Petroleum Company are: Exxon Mobil, Shell, Total, BP, from an article by
Andrew E. Kramer. “Deals With Iraq Set to Bring Oil Giants Back” The New York Times. 6/19/08.
[26] These five media conglomerates are: AOL Time Warner, News Corporation, Walt Disney Company, Viacom and Vivendi Universal. For more on the problems of corporate media, see
William R. Clark. Petrodollar Warfare: Oil, Iraq and the Future of the Dollar. (Canada: New Society Publishers, 2007) 163.
[27] William R. Clark. Petrodollar Warfare: Oil, Iraq and the Future of the Dollar. (Canada: New Society Publishers, 2007) 121.
[28] The BRIC developing countries. Brazil, Russia, India and China.

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