World's largest oil reserves in Iraq

[slow_dazzle]

Oil was trading a $20 a barrel in 2002. Now it is trading at $130 a barrel. Total oil demand has gone up less than 10 million barrels a day over the last 6 years. Full bore Iraq production alone could have supplied most of that extra 10 million barrels a day. Somebody is making a mint by NOT drilling for Iraqi oil.

You don't care about this. You are worried about oil running out soon. From your point of view the higher the price, the less demand will grow and the more incentive there will be to conserve and invest in alternative energy sources. Great. I appreciate your point of view. But it doesn't change the fact that we invaded Iraq at a cost of more than half a trillion (so far) in order to stop Iraqi oil production and we are rattling our saber at Iran just as Iran's oil production is steadily increasing to pre-Iranian revolution levels.

If you have oil, you have two choices. You can be a good client state who dances to the tune of Big Oil, or you can be added to the Axis of Evil. It's not about stealing the oil; it's about controlling the spigot, maximizing profit and making sure the windfalls land in the right hands.

Hopefully the gougers will realise there comes a point when their gouging is counter productive. If the US economy collapses TPTB will realise a screwed up economy and huge numbers of unemployed people might make their lives a tad uncomfortable. After all, TPTB are just as dependent upon a functioning economy as the rest of us so if they push the gouging too far all that will be left is a fucked economy, a huge number of restless people and reliance on the integrity of the perimeter fence. Screwing up the economy seems a tad stupid if TPTB want a comfy life. A pissed off population and a crumbling economy seems a pretty stupid plan for world domination unless TPTB have a masochistic streak.

Looks like they might get their wish if they want to wreck civilised economic life as we know it - oil prices have risen by nearly $5 in one day of trading. All they need to do now is a little more price gouging and everything will go tits up.

I don't know about you but I regard wrecking the economy as a rather stupid way to go about world domination. Unless TPTB relish the idea of a destabilised and chaotic society and living behind a perimeter fence.

[stickdog99]

Couldn't agree more. But in my limited experience with TPTB, I haven't recognized them as particularly big on the big picture.

[AhabsOtherLeg]

I don't understand.

Iraq holds a vast amount of oil, and was very vulnerable to invasion, and so of course it got invaded.

Iran also holds a vast amount of oil, and is both vulnerable and "provocative", so it is currently under threat of invasion....

But Venezuela has the fourth-largest oil reserves in the world, and no one is bothering them at all!!!

I mean, if this was all about oil, I would at least expect the elected socialist President who anounced his intention to nationalise oil production to get kidnapped twice. I would expect civil strife to be stirred up relentlessly by unknown "foreign" leaders after he came to power. And I would expect truly unbelievable propaganda to be spread worlwide about how terrible things are in the country under his rule (a lack of toilet paper, women not being able to shave their legs, stuff like that).

I would also expect neighbouring "allied" states to be encouraged to grab bits of long-disputed territory on the borders of the country in question in order to put intolerable pressure on the enemy government in preparation for an invasion somewhere down the line.

But none of that has happened with Venezuela so far, has it? How odd. So it can't just be about securing the worlds' biggest and easiest oilfields.
Otherwise they'd have done all that stuff to Venezuela already. And they haven't.

[slow_dazzle]

I don't understand.

Iraq holds a vast amount of oil, and was very vulnerable to invasion, and so of course it got invaded.

Iran also holds a vast amount of oil, and is both vulnerable and "provocative", so it is currently under threat of invasion....

But Venezuela has the fourth-largest oil reserves in the world, and no one is bothering them at all!!!

I mean, if this was all about oil, I would at least expect the elected socialist President who anounced his intention to nationalise oil production to get kidnapped twice. I would expect civil strife to be stirred up relentlessly by unknown "foreign" leaders after he came to power. And I would expect truly unbelievable propaganda to be spread worlwide about how terrible things are in the country under his rule (a lack of toilet paper, women not being able to shave their legs, stuff like that).

I would also expect neighbouring "allied" states to be encouraged to grab bits of long-disputed territory on the borders of the country in question in order to put intolerable pressure on the enemy government in preparation for an invasion somewhere down the line.

But none of that has happened with Venezuela so far, has it? How odd. So it can't just be about securing the worlds' biggest and easiest oilfields.
Otherwise they'd have done all that stuff to Venezuela already. And they haven't.

The issues are complex AOL but the quest for oil is almost certainly the reason for the ME debacle. Some believe it is about grabbing the oil for the west; others believe it is about controlling where Iraqi oil goes once it comes on stream.

As for Venezuela, the oil they have is pretty sour stuff which isn't easy to refine. And there there is evidence that the US has tried to undermine Chavez by various means including a coup. (See "The Revolution Will Not Be Televised").

Assessing how much oil is left is not an exact science. Nevertheless, there is abundant evidence that the supply and demand lines have intersected. It isn't about running out, despite what some of the debunkers try to say about those of us who believe in the energy plateau; there is still a lot of oil in the ground. The issue is that debt-based economics requires monetary growth in order to continue. Economics is basically using energy to do stuff which businesses have to pay for and that becomes a major part of their operating costs. Now that there are more people who want oil, than there is oil available, the economy is contracting because people have to pay more as market economics forces price up in response to increased demand in a tight market. That is possibly a tad simplistic but it is basically correct.

Oil=economic growth. Less/more expensive oil=declining economic growth. And less oil (and natural gas) = food production problems.

[stickdog99]

Chavez's lionization in the US Congress and mass media is nothing more than the exception that proves the rule.

[AhabsOtherLeg]

I was being more than a wee bit sarcastic about Venezuela - I know they have already done everything I just said they hadn't. I haven't seen "The Revolution Will Not Be Televised" though, I will watch it later today if it's on Google Video.

I am by no means a Chavez supporter, and am generally opposed to socialism (don't kill me, Board!) but I can see the difference between right and wrong, and on Venezuela we are clearly in the wrong with what we are doing there, and with what we are gearing up to do there in the future.

It was wrong the last time we took their country, and it will be wrong the next time too.

Oil prices are clearly being manipulated right now. Capitalism requires scarcity, and so scarcity must be created if there is, in fact, a surplus. Bush has built the kind of stockpile of unused barrels that hasn't been seen since just before WW2. He is literally burying the stuff. He's putting it back in the griound. In preparation for what, I don't know.

[wintler2]

.. But it doesn't change the fact that we invaded Iraq at a cost of more than half a trillion (so far) in order to stop Iraqi oil production and we are rattling our saber at Iran just as Iran's oil production is steadily increasing to pre-Iranian revolution levels.

Controlling who got Iraqs oil exports at what price could well have been a primary aim for invaders, but that neither supports nor undermines possilility that Iraq has much more oil. For all the data any of us have seen, Iraq might have much less than claimed, certainly they haven't been subtracting annual production from stated reserves.
And FYI, Irans oil production peaked in 1974 at 6mbd (before the revolution), reached a second, but lower peak of 4.139 mb/d in 2005 but this year, though they are producing flat out, have produced an average of 4.029 mb/d. They've had petrol rationing there for over a year now, i believe. The WSJ figure on http://www.myninjaplease.com/green/?p=268 illustrates Irans 'exportland' dilemma nicely (but note production figure only go to 2005).

..If you have oil, you have two choices. You can be a good client state who dances to the tune of Big Oil, or you can be added to the Axis of Evil. It's not about stealing the oil; it's about controlling the spigot, maximizing profit and making sure the windfalls land in the right hands.

Agreed, where they can, the oil majors and their mil-state collaborators will use any means they can to supply our oil demand - Reagan, Bush I, Clinton and Bush II have all said as much. But oil co's don't rule the world, and even if they did it wouldn't prove Iraq has more oil. Poetic simplifications, when stacked one onto another, easily mislead into error.

[AhabsOtherLeg]

I don't disagree with you Wintler, and i know i'm probably just adding to the poetic simplifications, but....

http://www.youtube.com/watch?v=j7t_u641NyM

You had the only honest government in the world!

And you changed it (rightly so, but, I mean, it was unique and precious for that one moment).

[AlicetheKurious]

AhabsOtherLeg said:

I don't understand...

Iraq, rich in oil on the one hand and internally torn on the other, is guaranteed as a candidate for Israel's targets. Its dissolution is even more important for us than that of Syria. Iraq is stronger than Syria. In the short run it is Iraqi power which constitutes the greatest threat to Israel. An Iraqi-Iranian war will tear Iraq apart and cause its downfall at home even before it is able to organize a struggle on a wide front against us.

Every kind of inter-Arab confrontation will assist us in the short run and will shorten the way to the more important aim of breaking up Iraq into denominations as in Syria and in Lebanon. In Iraq, a division into provinces along ethnic/religious lines as in Syria during Ottoman times is possible. So, three (or more) states will exist around the three major cities: Basra, Baghdad and Mosul, and Shi'ite areas in the south will separate from the Sunni and Kurdish north. It is possible that the present Iranian-Iraqi confrontation will deepen this polarization.

Excerpt from: A Strategy for Israel in the Nineteen-Eighties, by Oded Yinon. Originally published in Hebrew in in KIVUNIM (Directions), A Journal for Judaism and Zionism; Issue No, 14--Winter, 5742, February 1982. Published by the Department of Publicity/The World Zionist Organization, Jerusalem. Translated by Israel Shahak.

[compared2what?]

There is an interesting analogy to be made here. Opium costs very little to produce yet it has a massive street value once it has been refined to heroin. Just because something is cheap to produce at source does not translate into cheap prices on the street - supply and demand (illegality is a factor here, of course). Oil is cheap to pull out of the ground yet expensive to buy - supply and demand.

I agree that it's an interesting analogy, in part because it's not an exact analogy, and the ways that it isn't say a lot about the economic logic of why and how we're fighting in Afghanistan as opposed to how and why we're fighting in Iraq. The main difference on a commodities level is that if heroin were legal, its value would drop like a box of rocks. And while I'm sure that the PTB would be able to figure out what country to invade to make it artificially scarce if it were, as things stand, they don't. They just have to figure out what country to invade in order to slaughter the competition farther to the east, which might, at least initially, mean lower prices, if that's what's best for business. Either way, whatever sinister forces have finally gotten their hands on Afghanistan's formerly frustratingly out-of-bounds-to-U.S.-interests opium crops, have the luxury of selling low now and high later if they feel like it. And, more to the point, letting the organically predictable amount of post-invasion chaos and havoc continue indefinitely being pretty much the ideal business environment, it's not necessary to keep ramping it up. With Iraqi oil, they're going the opposite route in trade terms -- ie, jacking up the prices so high now so that they will be able to ride to the rescue of a grateful consumer base later by lowering them. Though my guess would be that it won't be to anything close to pre-war prices. Also, it might have been regarded as a drag that in this case slaughtering the competition --ie, the formerly relatively robust Iraqi oil-production sector -- literally entails slaughtering the competition. But if it was, it probably isn't any more, because, you know: Mission accomplished.

But that's just a difference in business models; in both cases, it's still strictly business. Which is my interpretation only, obviously. It's not like I have access to the international drug or oil trade's books and internal memoranda.

But Venezuela has the fourth-largest oil reserves in the world, and no one is bothering them at all!!!

It's not just that the latest round of bothering Venezuela has been quietly escalating since March -- We've been gradually upping the ante in advance of possibly playing the terrorist card (by proxy, through Colombia) against not only Venezuela, but third-largest-oil-reserve-in-South-America-having Ecuador, too!

If the Encycolpedia of the Earth is a reliable source, it sounds like Ecuador is actually going to require more bothering:

Several exceptional factors affect oil production in Ecuador. First, many private companies have clashed with the government over contract and tax issues, especially dealing with rebates of the value-added tax (VAT) paid by oil exporters. Both Occidental Petroleum and EnCana have taken legal action against the Ecuadorian government over VAT rebates. In 2004, an arbitration panel awarded $75 million to Occidental in VAT reimbursements, an award the Ecuadorian government disputes.

Second, there has been significant opposition to oil development by indigenous groups. These groups have repeatedly obstructed exploration and production activities in Ecuador's eastern region. The IIT block, which sits deep in the Amazon region, will likely face particularly fierce resistance from these groups. Indigenous activists have also brought a lawsuit against ChevronTexaco over Texaco's former oil operations in Ecuador. The suit is still in litigation, but a resolution of the case in favor of indigenous activists could introduce additional risk for foreign oil operators.

Protests against the oil industry have had a direct impact upon the country’s crude production. In August 2005, protest groups shut down Petroecuador’s crude oil production for a week, forcing the company to declare force majeure on its crude exports. In February 2006, Petroecuador shut down the SOTE pipeline (see below) for several days, after protesters occupied a pumping stations.

If that's true, then Ecuador's never going to be easy. At least in Venezuela, there's the possibility that if you get rid of Chavez, you can then rely on the failed-coup attempting oil barons of '02 (and, I assume, silently, '04) to deal with the indigenous population, since they have some history of success in that area. But I don't really know enough about Ecuador to know if it's true.

[AhabsOtherLeg]

Alice, do you think the strategy of partition is still a possibility in Iraq?

Actually, that was a stupid question (by no means the last, I'll wager) because from what I can gather there will be no strategy - if the country really divides along sectarian and tribal lines there will be no one who can stop or control it. Looking to the future, though, would you say there is a realitic chance of Al Sadr having his Shi'a province and someone like Sistani having a number of massive Sunni enclaves, and the Kurds basically settling down, not exactly where they are right now, but as far from the Turkish border as we can persuade them to move?

I'm asking this as if I was a US foreign policy adviser, because it fascinates me that they never thought about these things in advance, and that even a useless drunken bugger like myself could've saw it coming.

Would you say an arrangement like that would be possible? An agreed partition of the homeland. A peaceful, federal Iraq.

There isn't really a smiley on the list that could express how unlikely I find this scenario. And yet I blelieve that this is what they are now planning. And they'll try to make it look like a big success.

We partitioned Iraq, and now it's only as continuously violent as every other partitioned state. Forget the invasion. It's peacekeping now.

Bush said: "We will be the peacemakers - and we will let our allies be the peacekeepers." Very kind of him, I thouht, even if he clearly didn't know the difference between the former and the latter.

Anyways: Partition. I don't think it's going to happen - but could it?

[AhabsOtherLeg]

I was "joking" about Venezuela. I know they are very much in the firing line, and that a lot of work is being done there now, and that it has been going on for quite some time.

I'm worried about anywhere with oil or gas reserves that doesn't also have independent weapons of mass destruction.

I despise WMD, and the doctrine of deterrence that I grew up under.

And apparently so do the very architects of that system - because nowadays the posession of WMD is not a solid deterrent to the prospective attacker, as we were told, for decades, but a reason to launch a preemptive conventional strike instead.

Me needs me bed.

[Ben D]

AhabsOtherleg,
Interesting post and your question to Alice, but please recheck the sectarian background of Sistani.

[stickdog99]

http://www.myninjaplease.com/green/?p=268

a combination of Western sanctions and Iranian policies has discouraged foreign investment in oil fields, causing production to stagnate. ...

Avoiding an export squeeze is one reason Iran argues it needs to consider nuclear energy. But that ambition has contributed to a diplomatic impasse with the West.

Translation: Big Oil doesn't want Iranian oil exports increasing and will do everything it can to stop this from happening.

[AlicetheKurious]

AhabsOtherLeg said:

Looking to the future, though, would you say there is a realitic chance of Al Sadr having his Shi'a province and someone like Sistani having a number of massive Sunni enclaves, and the Kurds basically settling down, not exactly where they are right now, but as far from the Turkish border as we can persuade them to move?

...

Would you say an arrangement like that would be possible? An agreed partition of the homeland. A peaceful, federal Iraq.

Ahab, the partition of Iraq is the nightmare scenario, not just for Iraq, but for the entire Middle East. Both Muqtada al-Sadr and Ali al-Sistani (who is arguably the most powerful man in Iraq, but definitely the most powerful religious leader of the Shi'ites in Iraq), as well as the Iraqi resistance and most Iraqis regardless of religion, strongly oppose partition.

Partition of Iraq and Lebanon are widely recognized to be a pillar of Israel's strategy in the Middle East, to fragment Arab countries along sectarian and ethnic lines; this is explicitly stated in the document I excerpted from in my earlier post, and also in the diaries of the late Israeli Prime Minister Moshe Sharett. These are corroborated by Israeli actions since the 1950s.

Those who support partition are widely considered traitors and agents of Israel and its American 'ally', which naturally includes the American-controlled regime of Saudi Arabia. Also among these are a number of American-sponsored alternative leaders, who are showered with money (useful in recruiting mercenaries) and weapons, and feted in the White House, to compensate for the fact that they have little or no popular base. This is a clear patter in Iraq, Lebanon, Palestine and Syria, among others.

Sayyid Hassan Nasrallah, the leader of Lebanon's Hizbullah, has explicitly said that only the fact that the Iraqi people and the unified, non-sectarian Iraqi resistance have frustrated the Israeli dream of a partitioned Iraq, has prevented the same scenario from being repeated in Lebanon (not for lack of trying) and Syria, to be followed by the next items on Israel's list of targets.

An agreed partition of the homeland. A peaceful, federal Iraq.

For the architects of partition, the whole point is not only to fragment Arab countries, but to assign quisling rulers for some among the fragments who will incite the fragments to fight each other. The Israelis didn't invent it: it's the age-old strategy of divide and conquer.

In the Arab world, "partition" is a dirty word. It doesn't fit in the same sentence as "peaceful".