Iraq's Oil Surge -- Implications For Peace

American Soldier Guarding an Oil Fire in Iraq

From The Wall Street Journal:

Here's a thought experiment: Assume that Iraq's democratic government declared it was nationalizing its oil industry, a la Venezuela or Saudi Arabia, while excluding American companies from the country. How do you think U.S. politicians would react? With angry cries of "ingratitude" and "this is what Americans died for"?

Of course they would, led no doubt by that critic for all reasons, Senator Chuck Schumer of New York. So it is passing strange that Mr. Schumer and other Senators are now assailing Iraq precisely because it is opening up to foreign oil companies, especially to U.S. majors like Exxon Mobil and Chevron. For some American pols, everything that happens in Iraq is bad news, especially when it's good news for the U.S.

Iraq announced this week that it is inviting global competition to develop its major oil reserves, with 35 oil companies invited to bid. By tapping outside capital and expertise, Iraq hopes to increase production by 60%, providing a much-needed boost to its own coffers and the world's tight oil supply.

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More News On Iraq's Oil:
Iraq's Oil at a Crossroads -- Dar Al Hayat
Why Baghdad isn't pumping more of its oil -- Toronto Star
Opinion: Let Iraq's Oil Flow -- Wall Street Journal
Iraqi oil … on both sides of the pond -- Iraq Oil Report
Iraq Foreign Oil Investors: Tread Lightly -- CBS News

My Comment: I personally have always been in favor of setting up an oil trust for the Iraqi people as envisioned by Instapundit. With Iraq possessing the second largest proven reserves of oil, its participation in pumping oil into the world's market will have a tremendous positive effect. Oil prices are having a terrible stranglehold on the world's poor and developing countries, any additional oil can only help in bringing high prices down.

Critics of this evolving situation are primarily reacting to events that are now out of their control and directly opposite from their positions of what should be U.S. and Iraqi policies. Fortunately, the people of Iraq and their leaders have very little interest in abiding the wishes of the U.S. Congress and their agenda.

I expect within a year a major oil boom that will not only employ hundreds of thousands of unemployed Iraqis, but also bring billions to the coffers of the Iraqi Government. This will profoundly impact world oil prices (lower prices), and will directly undercut the power and influence of countries like Iran, Venezuela, and Russia.

For the Iraqis themselves, they will start to believe that their resources will be (for the first time) benefiting them and not some despotic dictator or what outside politicians (the U.S. Congress) believe should be done. The dividends for peace will be immeasurable, and if successful, one can then argue that the invasion and the cost of human life was worth it.