How Did The US-Iraq War Affect The Iraqi Oil Market?
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Over the years, the economy of the Middle East has been so dependent on the presence of oil reserves in the country. The most notable countries in the regional block include Saudi Arabia, Kuwait, United Arab Emirates, Iran and Iraq. These countries when combined account for almost 60% of all the known oil reserves in the world. This makes oil and its related product an important component in their economies. In all the producing oil countries in the Middle East, Iraq has been the most affected in its marketing strategies. The US-Iraq war had profound effect on the manner in which the country’s oil exports fared in the international market. Thus, the following essay looks into the manner in which the United States played a role of securing oil…show more content… With Saddam in power, it was difficult for the United States to accomplish their mission of securing oil reserves in Iraq. He had maintained stability in the country from 1979-2003 (Lippman). His ascension to power was in the period when the Western Oils companies “Seven Sisters” had taken toll on the Iraq oil. Throughout his reign, Saddam was pushing for a way of eliminating Western hegemonies in the Iraqi oil market. For this reason he adopted strict measure on the Western countries as well as the private oil drilling companies in Iraq (Lippman). In 2000, the Saddam government took control of its oil and managed it in the best interest of the IraqiAhmed. The move did not indicate a good sign with countries such as the United Kingdom and United States who felt that Saddam was obstructing their economic freedom. For this reason, the two countries pushed for an agenda to depose Saddam and gain control over its oil reserves. This was successfully conducted in 2003 when Iraq was attacked under the pretense that it was in possession of weapons of mass destruction. The ousting of Saddam happened together with the conquest of Baghdad, an important oil-producing block. According to Juhasz, this was done with the aid of US, UK, Poland and…show more content… For a long time, the US government has used the companies to manage their oil interests in Iraq (Johasz). The companies operate on contracts that are arguably contrary to the Iraq legal system. They have consistently opened Iraq oil to provide investors and leaving little oil for the Iraq government to manage. This shows the level of foreign influence in the Iraqi oil market. For instance, the daily oil production in Iraq stand at three million barrels in one day but only 20% of the returns from this petroleum help the Iraq people (Juhasz). The rest of the money benefits the Western owned oil companies. In addition to lack of economic motive power that could result from oil mining in Iraq, the rate of employment from the oil remains below 2% (Juhasz ). This is because the oil mining countries in Iraq rely in imported labor. Only ten thousand Iraqis are employed for every one million barrels of oil produced. A good percentage of this number work as gatekeepers and other low ranking laborers (Tollast). As a result, there have been constant revolts from the unemployed Iraq population demanding employment from the international oil companies. It therefore means that the Western oil companies have taken the place of military as the oil cartel in the gulf country. The Obama administration recalled the