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UNITED NATIONS — As Washington reels with perceptions of an oil crisis, as economists flinch over its implications, and as politicians scramble for sound bite solutions, Saddam Hussein is again poised to enter center stage. The Iraqi dictator is not planning a formal military conflict but is carrying on war by other means--the use of his petroleum trump card to play some tricks with the Western economies and perhaps elections.
Indeed the dangerous and growing dependency on foreign oil makes the US, EU, and Japan natural targets for financial and political blackmail concerning the flow of black gold. Moreover media hype over the "oil crisis"--pure kid stuff as compared with the 1973-74 oil boycott--has nonetheless caused our less than inspired political class to posture, over react, and thus become unwitting hostages to petroleum producers. Moreover, a lacking comprehensive domestic energy policy has allowed this to transpire.
Saddam Hussein is prepared to work with some of the more radical OPEC brothers, such as Iran, to put his hand on the political scales in Washington.
Though the UN sponsored "Oil for Food Program" allows Iraq to legally export oil in exchange for food and humanitarian supplies, this tightly scripted plan sets aside thirty percent of Iraq's petroleum revenues for reparations to Kuwait.
Interestingly, some of the oil goes to the U.S. and Western Europe. Since the program started in December 1996, Iraq has exported two billion barrels of oil for $34 billion. Despite higher petroleum prices now, Iraq's dilapidated industry only has the capacity to pump about 2 million barrels a day.
U.N. economic sanctions, stemming from Iraq's invasion of Kuwait, have kept a tight noose over Baghdad; yet a decade after their imposition, international solidarity continues to unravel. While Washington and London have tried to box in Saddam, the ongoing economic sanctions now appear more vindictive than effective. Nor is there any guarantee that Saddam has stopped developing weapons of mass destruction, especially since U.N. inspection teams have not been inside Iraq for two years.
Last year, the UN Security Council lifted the limit on Iraq's annual oil sales; now the Council has quietly reduced Iraqi compensation claims to Kuwait from 30 percent of oil revenue to 25 percent. This result of Russian diplomatic lobbying will allow Baghdad approximaelty one billion dollars in additional funds over the next year.
For example, between September 9th and 22nd, Iraq exported 35 million barrels of oil earning $970 million; in that period two million barrels of Basrah Light were slated for the USA and 5.5 million of Kirkuk crude for European markets.
Beyond the genuine dictum of supply and demand, the real issue comes down to the fact that the U.S. Department of Energy's sloppy strategic planning has allowed this to happen, much as the slipshod oversight over the Los Alamos facility permits nuclear secrets to be wisked away. Incompetence to the third power is perhaps the most polite explanation. Despite extraordinary domestic energy resources, we remain dependent on "cheap foreign oil."
Curiously Energy Secretary Bill Richardson, a former US/UN Ambassador, paid a quiet visit to UN Secretary General Kofi Annan in New York on a day when Richardson was also testifying before Congress. Put in a good word to OPEC?
As this column warned in May, Saddam would be playing in the political sandbox come September. Now during the height of the U.S. Presidential election campaign, the question emerges whether Saddam's personal venom for the Bush family, and thus George W, as well as his consummate hatred for America, prompts him to provoke a showdown? Naturally this would allow Bill Clinton the perfect pretext for an "October Surprise" which could underscore Al Gore's electoral chances in November.
Secretary of State Madeleine Albright has foolishly stated that the US will not use military force should Baghdad block renewed U.N. weapons inspections; thus she puts U.S. military power in the box. Naturally, that can quickly change given political expediencies. Indeed, the Clinton/Gore Administration, lacking gravitas in its energy and foreign policy, does not seem prepared for Saddam's latest snooker.
John J. Metzler is a U.N. correspondent covering diplomatic and defense issues. He writes weekly for World Tribune.com.
