If the Western military intervention in Libya is really being driven by oil, maybe it's time to think again. History says regime change is never bullish for oil production in the Middle East and even less so for oil exports.
Iran and Iraq, two of the larger producers in the region, are cases in point.
While no one misses the Shah's regime, Iran and the rest of the world still miss the oil production and the oil exports his regime once produced. At the height of the Shah's power, Iran was pumping out six million barrels a day. Today, 32 years after the Iranian revolution sent Shah Mohammad Reza Pahlavi and his cronies packing, Iran barely produces four million barrels a day.
Exports have fallen even more than production. During the Shah's reign, Iran consumed less than a million barrels a day, leaving over five million barrels for daily export. Today, thanks to decades of massive fuel price subsidies, domestic oil consumption has almost doubled, leaving only two million barrels a day for export -- or 40% of the export volumes prior to the Iranian revolution.
Iraq's experience should give Western allies no more confidence in their Libyan mission than the Iranian one. Prior to the invasion of Kuwait and the trade sanctions it triggered, Saddam Hussein's Iraq produced around three million barrels a day in the late-1980s. Since then, oil production has never been close to that level.
When the Americans invaded Iraq in 2003, the U.S. Department of Energy confidently predicted the country would be throwing its arms open to foreign investment and the oil sector would be producing over four million barrels per day by 2010. Instead, the Sunni insurgency broke out and a whole lot of pipelines (and people) started getting blown up. Oil production plunged, and it has taken almost a decade to get production back to pre-invasion two and a half million pace.
What will happen in Libya is still anyone's guess. Will a defeated Muammar Gadhafi try to blow up the oil fields like Saddam Hussein did on his forced retreat from Kuwait? Will oil production and oil installations simply collapse as collateral damage in a protracted civil war that partitions the country? Or will a new regime take over and prove to be as dysfunctional as its predecessor or less inclined to develop the country's oil reserves? Whatever happens, both the Iranian and Iraqi experience suggest a post -Gadhafi Libya will produce less, not more, oil.
Of course, maybe the missing 1.3 million barrels of oil exports from the country have nothing to do with why we are in Libya. Maybe it is just a humanitarian mission after all. But if protecting defenseless populations from Middle Eastern dictators is what this is all about, why aren't we intervening in Bahrain, Yemen and Syria as well?
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"President Barack Obama's speech Tuesday night about the military action in Libya was composed of 3,362 words.
But there were two words conspicuously absent from the 30-minute address: "Oil" and "energy."
Back in the day, when politicians didn't use word like "interest" -- a word that appeared six times in Obama's speech -- as a euphemism, they spoke more plainly.
A quick history lesson (I know, I know, but I promise I'll keep this short): When Europeans were divvying up the deceased Ottoman Empire after World War I, they spoke openly of the desire to control oil fields as their reason for interest in African and Middle Eastern countries.
Some examples from Margaret MacMillan's excellent book, "Paris: 1919":
• "Mesopotamia, yes, oil, irrigation, we must have Mesoptamia," British Prime Minister Lloyd George said.
• "We ought to control sufficient ground in front of our vital oil-fields," one of George's advisers wrote.
• Both Britain and France did not want "the Americans, who were starting to take an interest in Middle East oil, muscling in" on oil-rich countries they had claimed, MacMillian wrote.
Now, Libya's massive oil reserves weren't discovered until after World War II, but when they were discovered it became clear that they were, indeed, massive."
http://articles.baltimoresun.com/2011-03-28/entertainment/bal-the-elephant-in-the-room-libyas-oil-20110328_1_libya-oil-nato-allies
Oil is also a finite resource; there is just so much of out there, and there are only a few countries that have enough oil to export. Right now, the world is supplied adequately. This makes the reserves of any 1 country not terribly important, because another producing state can pick up the slack. But this is not sustainable. Not only exporting countries one by one are turning into net importers, domestic production in many of importing countries are dwindling fast.
Iran’s current production issues are more due to political pressure by the west than actually the regimes’ fault. West is preventing Iran from finding customers and investments. this can continue as long as the world is well supplied. But not forever. Iran knows this. So, she is trying to create her own block of oil. Venezuela is a partner, Iraq possibly, and war in Afghanistan that was supposed to be the route for Kazakhstan’s 30 billion barrels of oil to the global markets without going through Russia or Iran. Libya is more important to the Europeans. Libya has enough reserves to take the place of Russia, and for US, Libyia's oil can contain Iran’s oil influence for another 10 years.