Oil: The casus belli that dare not speak its name

Oil is both Iraq's greatest asset and its greatest problem. It is central to everything. It is the essential resource that could secure the country a prosperous future.

And yet many people, ranging from peace activists to pro-war politicians, seem to believe it is also responsible for bringing the country to the brink of war. "The aim of the American policies is the oil in the Gulf," Tariq Aziz, the Iraqi Deputy Prime Minister, has said, echoing Saddam Hussein.

That the seemingly inevitable war America and Britain are poised to fight is motivated by oil is certainly a tempting position to adopt. A simple glance at even the most basic facts suggest they speak for themselves.

America uses vast amounts of oil – three gallons a day per head in 1999 compared to a worldwide average of half a gallon. In all, while the US possesses only 2 per cent of the world's oil reserves, it is responsible for 26 per cent of worldwide consumption. It likes that oil to be cheap – a gallon of petrol costs about $1.60 (26p a litre) – and it will do anything to ensure its oil supplies are not disrupted. As the former secretary of state Henry Kissinger said: "Oil is much too important a commodity to be left in the hands of the Arabs."

Nor does one need to be a conspiracy theorist to see the direct links between the oil industry and the Bush administration. President Bush was an oil man and a director of Harken Energy Corp, the Vice-President, Dick Cheney, made millions from the oil industry working as CEO of Halliburton, while Chevron used to have on its board of directors Condoleezza Rice, the National Security Adviser.

Then there are the ongoing links between oil and the administration. In the elections of 2000, the oil and gas industry contributed $26.7m in campaign funds to the President and other Republican candidates. In last year's elections, which saw the Republicans reclaim control of the Senate, it provided $18m. "Those who profit directly from the oil industry, and those in power are the same," the journalist Daniel Tubb argued. "However, it is important to realise that this is not a recent phenomenon. Oil has played a central role in US foreign policy for the last 50 years. Iraq is just the latest verse in a long American love affair with the black gold."

One thing that everyone seems to agree on is the treasure trove Iraq's black gold represents. Iraq has proven oil reserves of 112 billion barrels, making it second only to Saudi Arabia, with perhaps double that in undiscovered reserves. With sanctions in place, the current production is just 2.8 million barrels a day, a capacity it struggles to reach because of deteriorating equipment.

At current production levels Iraq has 128 years' supply of oil. The value of these reserves is vast – perhaps too vast to calculate. Experts say that given sufficient foreign investment, Iraq could be producing six million barrels a day within five years, making it the world's third-biggest producer behind Russia and Saudi Arabia. At those levels, production could be worth between $40bn and $80bn each year.

Many would argue that is something worth going to war for. In this context, there are a number of countries that have as much to lose as America has to gain. Since the end of the Gulf War companies from more than a dozen nations, including Britain, have had discussions with Iraq about developing fields. Is it a coincidence that the two countries with most to lose from America seizing control of Iraq's oil are Russia and France – both veto-holding members of the UN Security Council and both opposed to the second resolution tabled by the US and Britain?

In 1997, Russia's Lukoil negotiated a $8.5bn deal to develop the West Qurna oilfield, and in 2001 another Russian company, Slavneft, signed a $42m deal to drill in Tuba. The French TotalFinaElf company has negotiated the rights for the vast Majnoon oilfield near the Iranian border.

Russia is concerned about losing out not only on the deals it has with Iraq, but also the effect that an increase in production of Iraqi oil would have on developing drilling sites in cost-intensive Siberia.

"It's pretty straightforward," the former CIA director James Woolsey said. "France and Russia have oil companies and interests in Iraq. They should be told that if they are of assistance in moving Iraq toward decent government, we'll do the best we can to ensure that the new government and American companies work closely with them."

But other experts suggest America has as much to lose financially as it has to gain from war with Iraq. Not only is there the estimated cost of any military action – $100bn or more – but there is also the risk that war will force up the cost of oil. Last week, the cost rocketed to $40 a barrel as jitters mounted over the effects of a war.

Both the British and US governments have argued that if access to oil was the motive, then abandoning UN sanctions and trading with President Saddam would be the best way forward. And if cheap oil is the secret aim of this war, why on earth would they risk another oil crisis during its prosecution?

"Nonsense," said the Defence Secretary, Donald Rumsfeld, when asked if oil was the motive. "It has nothing to do with oil, literally nothing to do with oil." Tony Blair recently told the people of Iraq in a specially recorded broadcast put out by Radio Monte Carlo that the threat of war "was not about oil".

There is a weight of evidence – covered more fully elsewhere in this series of articles – that suggests the motivation of both Mr Bush and Mr Blair is not the prize of oil. Mr Bush seems to have arrived at this position for a number of reasons, partly historic but largely pragmatic. Iraq had long been seen a problem and many within the administration have been keen to deal with him, partly as an attempt to re-order the Middle East. The shockwaves created by the attacks of 11 September, which 50 per cent or so of Americans believe Iraq had a hand in, created a climate in which an assault against Iraq could be sold to the public. Mr Bush's "war on terror" dovetailed with the desire of others to get rid of President Saddam.

But that does not mean that the military-industrial complex is not rubbing its hands at the prospects of the spoils of war and the spending for such a confrontation.

Oil analysts believe a US-controlled Iraqi government would quickly make deals with the largest companies – the top four of which are based in the US or Britain – for privatised production. Such deals could be justified on the basis that only the companies would be able to resume exports quickly and allow Iraq to buy critical food, medicines and other humanitarian goods and pay for infrastructure.

"When there is a regime change in Iraq you could add 3-5 million barrels of production to world supply [per day]. The successful prosecution of the war would be good for the economy," said Larry Lindsey, Mr Bush's former economic adviser.

If oil is not the motivating force for Mr Bush and Mr Blair, to conclude that the prospect of the spoils of oil is not driving the actions and attitudes of those lining up alongside them is difficult. As Larry Goldstein, the president of the Petroleum Industry Research Foundation, put it: "If we go to war, it's not about oil. But the day war ends it has everything to do with oil."