Bush keeps talking about oil:
"You can imagine a world in which these extremists and radicals got control of energy resources," he said at a rally here Saturday for Rep. Marilyn Musgrave (R-Colo.). "And then you can imagine them saying, 'We're going to pull a bunch of oil off the market to run your price of oil up unless you do the following. And the following would be along the lines of, well, 'Retreat and let us continue to expand our dark vision.' "WaPo calls it "another striking evolution of his argument on behalf of the war" and cites previous White House dismissals of the "blood for oil" argument.
"There are certain things like that, myths, that are floating around," Rumsfeld told Steve Kroft of CBS Radio in November 2002. "It has nothing to do with oil, literally nothing to do with oil."Bush says radicals in control of Iraq's oil would be "able to pull millions of barrels of oil off the market, driving the price up to $300 or $400 a barrel." But the WaPo piece shoots that argument down in flames, on a number of fronts:
Iraq has more than 112 billion barrels of oil, the second-largest proven reserves in the world. But it currently pumps just 2.3 million barrels per day and exports 1.6 million of that, according to the State Department's tracking report on the country, still short of what it produced before the invasion.
That represents a fraction of the 85 million barrels produced around the world each day and less than the surplus capacity of Saudi Arabia and other Organization of Petroleum Exporting Countries, meaning in a crisis they could ramp up their wells to make up for the shortfall, analysts said. The United States also has 688 million barrels of oil in the Strategic Petroleum Reserve, enough to counter a disruption of Iraqi oil for 14 months.
Even if Iraq did not sell oil to the United States, it would not matter as long as it sold it to someone because the international market is fungible and what counts is the overall supply and overall demand, according to analysts. If Iraq cut off exports altogether, it still would not have the dire effect on the world market that Bush predicts, they said. The price of oil began rising dramatically in 2002 as the confrontation with Iraq loomed, but many factors contributed, including increasing demand by China and problems in Nigeria, Venezuela and elsewhere.
The world, in fact, has already seen what would happen if Iraqi oil were cut off entirely, as Bush suggests radicals might do. Iraq effectively stopped pumping oil altogether in the months immediately after the invasion. And yet the price of oil has never topped $80, much less come anywhere near the $300 or $400 a barrel Bush cited as a possible consequence of a radical Iraqi regime withholding the country's oil.
"They're a minor exporter," said Edward Morse, managing director and chief energy economist at Lehman Brothers. "They have potential to be a greater exporter. But it's ludicrous to suggest someone could hold the world hostage by withholding oil from the market, especially a regime that needs money."