Whatever Happened to Iraqi Oil?


GeoffreyTransom's picture

2002: the 3-2-1 crack spread was $4-odd; in 2005: $7-odd; now: $30-odd.

To the extent that the War-Rape of Iraq had anything whatsoever to do with oil, it was not to obtain control over Iraqi oil per se, but to revalue (upwards) crony oil endowments and to enable larger per-barrel profit margins. That revaluation and increased crack margin applies to ALL barrels, regardless of source.

In the same way, when the State decided to have their mass-scale slaughterfests in 1914 and 1939, steel prices (and commodity prices generally) went up hard. The increase in steel prices did not solely apply to steel used in the manufacture of materiel for the War Pigs to use to lay waste to each other's working classes and infrastructure: ALL steel for ALL uses became more expensive, and the additional margin was pocketed by the Steel interests then, as it has been being pocketed by the oil interests now.

Although history is replete with instances of actual resource-acquisition by war (paid for by the taxpayer, with cronies obtaining control over the profit stream through State-rigged extraction-rights agreements), the political-parasite set is no longer inder the illusion that stealing resources in this way can be done at reasonable cost. It's FAR more about enabling them to earn a decent rate of return on their DOMESTIC endowments of resources.