Oil Politics: The West and its desire for energy security since 1950

This book illustrates the story of oil politics from the 20th century until today. It begins with the overthrow of the Iranian regime in 1953, and continues until the current rush for resources in the Arctic. However, the book does not simply outline these events, but, it also explains the reasons for the specific development of states acts. Thereby, this study is based on the International Political Economy and International Relations theory – a combination that makes this book unique. Finally, the book gives the reader an insight of the petro state while outlining the strategic importance of oil itself.



Text Sample:

Chapter 3.2, The first Gulf war:

On August 2nd 1990, the Iraqi dictator Saddam Hussein ordered his army to invade his neighbouring country Kuwait (Yergin 2008: xiv). His main aim was not primarily to destroy a neighbouring country but its oil reserves, while other motives were at best secondary. However, the story is not as simple as one might think. In 1990, Iraq had acquired a massive debt due to its war with Iran. This debt was to a large extent financed by Kuwait and Saudi Arabia and Iraq was fighting for its economic survival after the end of the conflict with Iran. However, the low oil price at that time made it very hard for Iraq to reduce its debt and to recover from the long and destructive war with Iran. The reason for the low oil price was seen from the Iraqi government as the result of an overproduction, especially by Kuwait and Abu Dhabi above OPEC quotas. Consequently, the Iraqi government accused the governments of Kuwait and UAE of waging economic warfare against Iraq.

However, when the tension between the Kuwait and Iraq increased, the USA ambassador in Iraq gave the fatal signal that the US would not intervene in internal Arab affairs, which was seen as a green light by Iraq to invade its neighbouring emirate (Parra 2010: 295-296). The reward for controlling the small country was enormous. The successful and permanent invasion of Kuwait would have meant that Iraq would have become one of the world’s leading oil power by controlling about 10 per cent of the global oil reserves at that time (Parra 2010: 298, 305; Yergin 2011: xiv).

With its increased resources Iraq would have rivalled Saudi Arabia as the dominant oil power, with a far reaching impact on the Persian Gulf, where the vast majority (2/3) of the world’s ‘conventional’ oil reserves were located at that time. The impact for the rest of the world would have been consequently far reaching as well (Yergin 2011: 10). The power that Iraq would have gained from its new position would have forced the world to pay court to the ambitions of the Iraqi dictator, which would not only have had the oil reserves, but also vast amounts of revenues from oil trade and the fourth largest army by numbers in the world. The consequence would have been a historic shift in the international balance of power (Yergin 2008: xiv: Yergin 2011: 10). However, an intervention was not crystal clear from the beginning, as one might assume, as one adviser to the US president said: ‘We will have to get used to a Kuwait-less word’. But the picture was more alarming then the adviser had guessed. If Iraq could not be removed from Kuwait, how long would it take before it would attack Saudi Arabia and the UAE? These countries would be under a constant threat. This scenario would have had totally unacceptable consequences for Israel and the price of oil.

However, before the fighting started the ‘western’ coalition estimated its losses of around 10,000 to 15,000 soldiers , which shows the huge risk it was willing to take to free Kuwait or better to say the risk it was willing to take to protect Saudi Arabia (Parra 2010: 300-303). Following this, the war aims were simpler than officially proclaimed: the first aim was to eliminate the threat of Iraq to the UAE and the Saudi Arabian oil reserves, while the second one was to leave Iraq strong enough, in order for it to remain a political unit to counter balance Iran. After the war had ended, the presence of US forces in the Middle East seemed to have appeased the region and to have secured the supply of oil (Yergin 2011: 14; Parra 2010: 302, 311-312).

3.3, The second Gulf War:

The reasons for the second Gulf War were vastly different than the ones of the first one. The so called ‘coalition of the willing’, was willing to go to war with Iraq in 2003, contrary to ‘Old Europe’. The reasons for the war were primarily not interlinked with oil at all. The primary factors were: the attacks of September 11, 2001 and its consequences, the threat of WMD, the way that the first war in 1991 had ended, including the persistence of Saddam Hussein’s regime and the way the intelligence services had analysed their data.

After Saddam Hussein was captured and interrogated, he replied to the question, why he had kept the illusion of having WMD – Iran.

Oil did not play the major reason when it came to the Iraq war in 2003. The significance of oil was simply highlighted by the nature of the region; the vast amount of oil in the Middle East and the critical balance of power in the region. However, the potential danger from Iraq in 2003 was not as significant for the region as it had been more than ten years earlier. Furthermore, in 2003, neither the British nor the US government were pursuing a mercantilist 1920s-style ambition to control the Iraqi oil. The real issue was not who owned the oil at the well, but whether it was available for the world market. It was the idea that a democratic Iraq would become a more reliable supplier of oil and that it could quickly increase its oil production, since the UN sanctions on the country would be abolished. However, the war was not over as quickly as expected and it cost the US taxpayer a trillion dollars in direct outlays until 2011 (Yergin 2011: 141-149; Klare 2004: 94-105; Chalabi 2010: ch.15).



Felix Kruse has obtained a bachelor degree in Business Science and Management from the FH Nordakademie Elmshorn, and specialised in Energy Economics among other fields. During his studies, he had been working as a trainee for an international oil company. His traineeship was carried out in Europe and Latin America. After completing his BSc, he continued with his postgraduate studies (MSc) in International Relations at KU London, focusing mainly on the International Political Economy of Oil. He is currently working for an international oil company where he specialises in strategy and finance.