01/08/2006 03:20 pm ET | Updated May 25, 2011

The Head of the Snake: Iraq's Unspoken Risk

This past week 130 Shiites were brutally and senselessly slaughtered in a single day in a series of Sunni-instigated car and suicide bombings throughout Iraq. The intensity and viciousness risks Iraq's descent into a sectarian civil war and places the formation of a cohesive central government at risk. The bloodletting continues unabated with no evident or announced purpose other than removing American forces from Iraqi soil while pushing Iraqi society into a miasma of chaos and slaughter.

Concurrent with the continuing disintegration of Iraq the price of oil has skyrocketed by over 100 percent in the past eighteen months alone, to vertiginous levels exceeding $60 a barrel, and appears poised to go higher under existing market conditions. At this level of pricing Saudi Arabia pockets some $1 billion every two days from its sale of oil and oil products. This enormous flood of money flowing into the coffers of Iraq's neighbors Saudi Arabia and Kuwait begs the question whether there is a relationship between the Saudi and Kuwaiti bonanza and Iraq's misery.

Iraq has the largest oil reserves behind Saudi Arabia in the Middle East. Yet only ten percent of its land mass has been prospected for oil. Its potential as a producer and exporter is enormous, second only to Saudi Arabia and perhaps, in time, with stability and calm, even greater. Given its known reserves, with extensive investment in its oil infrastructure, Iraq exports could reach 6 million barrels/day in a few years' time (it was reported on Friday that Iraq's exports last month totaled 1.1 million barrels/day, the lowest level since the official end of the conflict in 2003). For Saudi Arabia, striding to maximize its profits from oil, the prospect of absorbing into the marketplace the full magnitude of Iraq's supply capability would in all likelihood ring the death knell to today's elevated level of world oil prices (600 percent higher than the price of oil a half dozen years ago).

For Saudi Arabia, as the OPEC cartel's most important member, it is imperative that a lid be kept on Iraq's oil production if prices are to be controlled. Adding to Saudi concerns is the fact that Saudi Arabia's largest oil reserves lie under its Eastern Province, the one sector of Saudi Arabia with a significant Shiite majority. Given Iraq's huge oil potential and the prospect of a Shiite-majority government potentially offering solidarity to the downtrodden Shiite population of the Eastern Province of Saudi Arabia, the stakes in Iraq for Saudi Arabia's ruling class becomes critical.

It has been reported that Saudi Arabians account for the vast majority of the "foreign" suicide bombers (one must remember, 15 of the September 11 hijackers were Saudis). And the flow of suicide bombers continues unabated, many the product or abetted by the perverse zealotry of Wahhabi schools and Imans to which Saudi Arabia has directed billions in support over the years.

Of particular interest and not widely reported at the time, late in June during an interview with Wolf Blitzer of CNN, Prime Minister Al-Jaafari of Iraq made clear that foreign insurgents, weapons and funding were entering Iraq not only via the Iraq/Syrian Border but that the Saudi/Iraqi border was a conduit as well. Since that interview the bloodletting continues unabated. This week alone more than 200 Iraqi civilians were murdered and more than twenty American servicemen lost their lives.

With the stakes so high and given the players at hand we are faced with the grim prospect that in Iraq we are confronted with a clandestinely supported insurgency with access to limitless oil money and an endless stream of terrorists acting to thrust Iraq into debilitating chaos and thereby keeping Iraq's oil production low and world oil prices high.

Is this conjecture? Perhaps. But if validated, what end strategy is available to us? With Saudi Arabia and its 26 millions, its 814-km frontier with Iraq, its limitless billions available to fund insurgency if it chooses to do so, and its mosques spewing hatred and enlisting daily 'martyrs' against our limited expeditionary force, our daily losses, our growing budget constraints. From this perspective our mission seems increasingly overwhelming and probably untenable unless, at long last, we finally take the decision to identify and confront the head of the snake.

Raymond J. Learsy is the author of Over a Barrel: Breaking the Middle East Oil Cartel.