The Phaserl


Saudis Have Lost the Oil War

by F. William Engdahl, New Eastern Outlook:

Poor Saudi Arabia. They don’t realize it yet but they have lost their oil war. The war in its current phase began in September, 2014, when the dying King Abdullah and his Minister of Petroleum, Ali Al-Naimi, told US Secretary of State John Kerry they would gladly join Washington in plunging world oil prices. It became clear the main Saudi motive was to eliminate the new growing challenge to their control of world oil markets by forcing prices so low that the US shale oil industry would soon go bankrupt. For Kerry and Washington the focus, of course, was to economically cripple Russia in the wake of new US sanctions by damaging their revenues from export of oil. Neither achieved their aim.

Now, however, it’s clear that Saudi Arabia, which along with Russia is the world’s largest oil producer, is going down a dark road to ruin. Washington seems more than happy to cheer them on.

The long-term Washington strategy since at least 1992, well before September 11, 2001 and the Washington’s declaration of its War on Terror, has been by hook or by crook, by color revolution or outright invasion, to directly, with US “boots-on-the-ground,” militarily control the vast oil reserves and output of the major Arab OPEC oil countries. This is a long-standing institutional consensus, regardless who is President.

Cheney: ‘Where the Prize Ultimately Lies’

To appreciate the long-term strategic planning behind today’s chaotic wars in the Middle East there is no better person to look at than Dick Cheney and his statements as CEO of the then-world largest oilfield services company. In 1998, four years after becoming head of Halliburton, Cheney gave a speech to a group of Texas oilmen. Cheney told the annual meeting of the Panhandle Producers and Royalty Owners Association in reference to finding oil abroad, “You’ve got to go where the oil is. I don’t think about it [political volatility] very much.”

During his first five years as CEO of Halliburton, Cheney took the company from annual revenues of $5.7 billion to $14.9 billion by 1999. Halliburton foreign oilfield operations went from 51% to almost 70% of revenues in that time. Dick Cheney clearly looked at the global oil picture back then more than most.

In September 1999 Cheney delivered a speech to the annual meeting of an elite group of international oilmen in London. One section is worth quoting at length:

“By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from?

Governments and the national oil companies are obviously controlling about ninety per cent of the assets. Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies, even though companies are anxious for greater access there, progress continues to be slow.”

The PNAC Warplan

Now let’s follow that bouncing ball sometimes called Dick Cheney a bit further. In September 2000 Cheney signed his name before his selection as George W. Bush’s vice presidential running-mate, to an unusual think-tank report that became the de facto blueprint of US military and foreign policy to the present. Another signer of that report was Don Rumsfeld, who would become Defense Secretary under the Cheney-Bush presidency (the order reflects the reality–w.e.)

The think-tank, Project for a New American Century (PNAC), was financed by the US military-industrial complex, supported by a gaggle of other Washington neo-conservative think tanks such as RAND. The PNAC board also included neo-conservative Paul Wolfowitz, later to be Rumsfeld’s Deputy Secretary of Defense; ‘Scooter Libby,’ later Vice President Cheney’s Chief of Staff. It included Victoria Nuland’s husband, Robert Kagan. (Notably Victoria Nuland herself went on in 2001 to become Cheney’s principal deputy foreign policy adviser). It included Cheney-Bush ambassador to US-occupied Afghanistan and Iraq, Zalmay Khalilzad, and hapless presidential candidate Jeb Bush.

Cheney’s PNAC report explicitly called on the future US President to remove Iraq’s Saddam Hussein and militarily take control of the Middle East a full year before 911 gave the Cheney-Bush Administration the excuse Cheney needed to invade Iraq.

The PNAC report stated that its recommendations were based on the report in 1992 of then-Secretary of Defense, Dick Cheney: “In broad terms, we saw the project as building upon the defense strategy outlined by the Cheney Defense Department in the waning days of the Bush Administration. The Defense Policy Guidance (DPG) drafted in the early months of 1992 provided a blueprint for maintaining U.S. pre-eminence, precluding the rise of a great power rival, and shaping the international security order in line with American principles and interests.”

At a time when Iran as a putative nuclear “threat” was not even on the map, PNAC advocated Ballistic Missile Defense: “DEVELOP AND DEPLOY GLOBAL MISSILE DEFENSES to defend the American homeland and American allies, and to provide a secure basis for US power projection around the world. (emphasis added)

In the report Cheney’s cronies further noted that, “The military’s job during the Cold War was to deter Soviet expansionism. Today its task is to secure and expand the “zones of democratic peace; (sic)” to deter the rise of a new great-power competitor; defend key regions of Europe, East Asia and the Middle East; and to preserve American preeminence…”

The Cheney PNAC document of 2000 went on: “The United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.

The quote is worth reading at least twice.

A year after the PNAC report was issued, then-General Wesley Clark, no peacenik to be sure, in a March 2007 speech before the Commonwealth Club of California in San Francisco, told of a Pentagon discussion he had had shortly after the strikes of September 11, 2001 at the World Trade Center and Pentagon with someone he knew in Defense Secretary Rumsfeld’s office.

Ten days after the 911 attacks, Clark was told by the former Pentagon associate, a general, that the Pentagon planned to invade Iraq. This was when Osama bin Laden, a bitter foe of the secular Baathist Socialist, Saddam, was being blamed for the terror attacks, and there was no 911 link to Iraq’s government. Clark related his conversation that day with the general:

“We’ve made the decision we’re going to war with Iraq.” This was on or about the 20th of September. I said, “We’re going to war with Iraq? Why?” He said, “I don’t know.” He said, “I guess they don’t know what else to do.” So I said, “Well, did they find some information connecting Saddam to al-Qaeda?” He said, “No, no.” He says, “There’s nothing new that way. They just made the decision to go to war with Iraq.”

“I came back to see him a few weeks later, and by that time we were bombing in Afghanistan. I said, “Are we still going to war with Iraq?” And he said, “Oh, it’s worse than that.” He reached over on his desk. He picked up a piece of paper. And he said, “I just got this down from upstairs” — meaning the Secretary of Defense’s office — “today.” And he said, “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.”

These were all wars, or attempted wars from the US for military control of the most abundant proven oil regions of the world, what Cheney in 1999 described as, “where the prize ultimately lies.”

Since that time, the US State Department and a host of government-tied NGO’s such as National Endowment for Democracy, Freedom House, Soros’ Open Society Foundations and others, along with the CIA, have launched the US-orchestrated (“lead from behind” is the current slogan) Arab Spring series of “democratic” regime coups across the Middle East, including Hillary Clinton’s war against Qaddafi in Libya, against Bashar al Assad in oil-and-gas-rich Syria, in Iraq yet again, Egypt and other oil or gas states of the Middle East, including an failed 2009 Color Revolution, the so-called “Green Revolution” in Iran.

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