I am trying to stay at arm’s length from advocacy for or against going into Iraq (for many reasons, including the deep philosophical conflicts that Will Wilkinson articulated beautifully in this post).

I do, though, keep up with goings-on in oil and natural gas industries, so I have a pretty good idea of who has contracts with whom. When France and Germany opposed further US/UN military activity and encouraged further inspections, I thought “well, that gives France time to suck more oil out of the ground on their existing contracts with the current Iraqi regime.” But I didn’t think much more about it beyond that.

Then Russia voiced opposition. Russia is the other country with a developed oil industry that has E&D contracts with Iraq, not to mention also being Iraq’s largest creditor.

Then, this week, China chimed in with its opposition. China also has contracts with the existing Iraqi regime to develop Iraqi fields, and with such a large population and no domestic oil deposits, they are probably a bit wiggy about securing energy supplies.

Is there a pattern here? Among the opposition, only Germany has little contact with oil processing and production.

Some observers have mentioned this already, both in blogs and in traditional media. David Reinhard’s column in today’s Oregonian puts is thusly:

It would, of course, be nice to have Germany and France and Russia and China with us. But these nations have their own interests, and we certainly shouldn’t give them a veto over U.S. policy. It’s telling that anti-warniks who are so ready to infer dark U.S. motives in our clash with Saddam — oil! — don’t mention the real interests that might explain the German and French stands. Oil and other lucrative contracts — yes, weapons deals — as well as their large Islamic populations.

A Tech Central Station column by Duane Freese on 24 January lays out this argument in further detail.

This article from tomorrow’s Asia Times highlights the economic relationships between Russia and Iraq, now and historically:

Russia and Iraq are negotiating a 10-year trade agreement that would include 67 agreements in oil, agriculture, transportation, railways and energy, Saleh said. These agreements could be worth more than $40 billion to Russia. …

Russia and Iraq have a history of trading that goes back to the Cold War days. Iraq owes Russia $7 billion in trade debt. It has sought to repay the arrears partly by granting Russia preferential trading status.

With the world’s second largest proven oil reserves estimated at 112.5 billion barrels – 11 percent of the world total – an accessible Iraq is big bounty for Russian oil companies.

Russian oil giants also fear a crash in oil prices if US companies move into Iraq. Iraqi oil is of high quality, and easy to produce. That makes it a formidable competition for Russia’s own crude of medium quality, extracted at high cost.

This article from the BBC today describes the commercial relationship between France and Iraq in the oil industry.

This article from the South China Morning News and this one from the Sydney Morning Herald highlight China’s energy interests as a role in their position on Iraq. The Sydney Morning Herald reports:

Energy-importer China has a big stake in Iraqi oil, also, having signed long-term contracts with Baghdad that give it virtual ownership of huge undeveloped oil fields in the country.

This National Post (Canada) commentary by Lawrence Solomon summarizes the issue nicely, including a discussion of the Doctrine of Odious Debts.

The Doctrine of Odious Debts, though it has been little used, is well known to France, Russia and the United States. The doctrine originated a century ago with the Spanish-American War, when the United States repudiated Cuba’s Spanish debts, saying they were “imposed upon the people of Cuba without their consent and by force of arms.” Furthermore, the Americans argued successfully, much of the borrowing was designed to crush attempts by the Cuban population to revolt against their domination, and was spent in a manner contrary to their interest.

After the Russian Revolution of 1917, when the Bolsheviks attempted to repudiate Russia’s debts indiscriminately, the Doctrine of Odious Debts was developed to determine which debts were legitimate and which illegitimate. This work was conducted by Alexander Nahum Sack, a professor of law in Paris, who authored two major works on the obligations of successor systems and coined the phrase, “dettes odieuses.” According to the doctrine, the debts accumulated by despots were “personal” to the despot, giving lenders no recourse: “The creditors have committed a hostile act with regard to the people; they can’t therefore expect that a nation freed from a despotic power assume the ‘odious’ debts, which are personal debts of that power.”

Apart from Great Britain v. Costa Rica, where Chief Justice Taft of the U.S. Supreme Court, sitting as an arbitrator, decided in 1923 that loans made by the Royal Bank of Canada to the regime of a Costa Rican dictator were personal, successor states have been reluctant to invoke the Doctrine of Odious Debts, out of fear that international lenders would boycott a fledgling regime. This is the case in South Africa, where a large segment of the population wants to brand apartheid-era debts as “odious,” after Desmond Tutu’s Truth and Reconciliation Commission endorsed the concept.

The reluctance to use the doctrine may soon change, in part because a proposal by Harvard economists to establish an international body to adjudicate odious debts has caught the attention of the International Monetary Fund, which has been giving the concept official heft by promoting it at an IMF seminar and in the IMF’s quarterly journal, Finance and Development. Scholars at the London School of Economics and McGill University have also given the concept credibility, as has its adoption by the world’s churches, through the Jubilee debt-relief movement, and citizens’ groups throughout the Third World.

Solomon concludes

The Bush administration may soon face vexing choices. Will it attempt to divide the Iraqi spoils among its allies, including Russia and France should they ultimately decide to support a war effort, and thus create cynicism throughout the Middle East and the world? Or will the Bush administration attempt to make Iraq a showcase for responsible government in the Middle East by enabling the Iraqi people to cast off the odious debts brought upon them by an illegitimate regime and by giving the other peoples of the region an inkling of what a future without odious rulers could hold for them.

Then there’s this NYT editorial today from Max Boot, claiming that from the US perspective it’s not about oil, which I think is largely correct.

The charge has a surface plausibility because Iraq does have the second-largest known reserves in the world. But we certainly don’t need to send 250,000 soldiers to get at it. Saddam Hussein would gladly sell us all the oil we wanted. The only thing preventing unlimited sales are the United States-enforced sanctions, which Baghdad (and the big oil companies) would love to see lifted. Washington has refused to go along because Saddam Hussein flouts United Nations resolutions. This suggests that our primary focus is the threat he poses, not the oil he possesses.

It’s true that overthrowing Saddam Hussein would lead to the lifting of sanctions and a possible increase in oil exports. But it would take a lot of time and money to rebuild Iraq’s dilapidated oil industry, even if the regime didn’t torch everything on the way out. A study from the Council on Foreign Relations and the James A. Baker III Institute at Rice University estimated that it would take three years and $5 billion to restore Iraqi production just to its pre-1990 level of 3.5 million barrels a day. That would increase total world production by only 1.3 percent, and might not reduce prices at all if other countries cut output or banded together to keep prices stable.

Nobody would claim that America’s global intentions have always been entirely pure. Still, our foreign policy from the Barbary war to Kosovo has usually had a strain of idealism at which the cynical Europeans have scoffed. In the case of Iraq, they just can’t seem to accept that we might be acting for, say, the general safety and security of the world. After more than 200 years, Europe still hasn’t figured out what makes America tick.

So is it about oil? If so, for whom is it about oil? The contractual relationships surrounding the oil industry seem to provide a compelling argument that oil profits do play a part in the story, but not the part that many people think.