- LONDON (UPI) -- Iraq is poised
to emerge as a major player on the international oil scene, a critical
energy supplier of the West, if it secures a future without President Saddam
Hussein in a swift U.S-led campaign of high-pressure diplomacy or contained
conflict.
That was an overwhelming view as American and European oil experts met
at a London think tank Wednesday to consider the potential impact on energy
security of a regime change in Baghdad.
Echoing assessments by analysts on both sides of the Atlantic, the experts
could not however agree on how best that "regime change" could
be brought about -- through dialogue or war.
The conference on "Gulf Oil, Global Politics: The Future of Energy
Security in the Middle East" took place at London's Royal United Services
Institute against the backdrop of intense diplomatic moves at the United
Nations to defuse the Iraq crisis and head off a U.S.-led military operation.
Oil traders have speculated over the possible effects of a Gulf conflict,
but their fears have been largely allayed so far by oversupply in the face
of weak demand for crude oil, a response to slow global economic growth.
Iraq is a member of the Organization of Petroleum Exporting Countries,
better known as OPEC, but can only sell oil under a U.N.-administered program,
part of the sanctions in force since its 1990 invasion of Kuwait.
A war in Iraq would disrupt Iraqi oil supplies in the short term but what
conference attendees deemed its successful outcome -- a change of government
in Baghdad -- could enable Iraq to bounce back with higher than current
output, depriving suppliers in and outside OPEC of their market share,
said the experts.
Iraq currently supplies about 9 percent of OPEC's total oil production
of about 27 million barrels a day, but has about 14 percent of OPEC's total
reserves of 819 billion barrels.
Industry analysts noted that Iraq is sitting on unquantified but likely
vast oil and gas reserves. Iraqi-born Mohammad Al-Gailani, a London-based
consultant, said only a fifth of Iraq's oil deposits had been drilled and
more than 100,000 square miles awaited exploration by companies likely
to be allowed in after a government change. He added oil exploration in
Iraq had the highest success rate with exploration costs of 50 cents a
barrel -- the cheapest in the world.
Manouchehr Takin, senior analyst from the London Center for Global Energy
Studies, asserted that concern over energy insecurity was often exaggerated:
Oil-producing countries had to sell oil to survive and would always find
the means to deliver the commodity to the consumer, he said.
However, should Iraq's isolation end -- and that includes the sanctions
-- the expected major new finds would almost certainly lead to key geopolitical
realignments in the Gulf, challenging neighbors Iran and Saudi Arabia in
particular.
In some strategists' view, Iraq after a regime change could prove to be
more reliable a partner for the West than Saudi Arabia, which currently
holds the greatest clout in OPEC. Other experts attributed that position
to minority conservative American view.
Joseph Barnes from the Baker Institute for Public Policy at Rice University,
Houston, said that U.S. dependence on the Middle East oil and Washington's
"special relationship" with Saudi Arabia was under constant review
since the Sept. 11, 2001, terrorist attacks on the World Trade Center and
the Pentagon.
"Despite protestations to the contrary in both Riyadh and Washington,
Saudi Arabia is seen by many, including apparently some in the administration,
to be an unreliable ally in the war on terrorism," Barnes said.
In contrast, a successful U.S. occupation of Iraq could lead to higher
oil production and help lower global oil prices, said Barnes, a view echoed
by several others at the conference.
Although actual presentations were on record, analysts' answers to questions
could only be quoted under "Chatham House rules," which cloak
such comments in anonymity.
The experts, agreeing that no one can predict the future, outlined a range
of scenarios, from a peaceful removal of Saddam Hussein to what Dutch-born
energy guru Hermann Franssen described as a "worst-case" scenario
of war in Iraq spinning out of control and engulfing the whole region.
Bruce Riedel, a former member of the U.S. National Security Council who
served former presidents George Herbert Bush and Bill Clinton, said in
his remarks that the Middle East in general was "on the edge of a
fundamental transformation."
He said, "This change is almost a certainty. The change will manifest
itself over years, not over months." However, he added, "This
change will not change Saudi Arabia's central position as the principal
U.S. partner."
Pointing out that the situation held too many imponderables, Barnes said,
"It is a cliche that it is easier to say where a war begins than where
it ends. World War I is a case in point. Did it end with armistice of 1918?
With the Versailles peace treaty? With the end of the Russian Civil War?
Or (Turkish leader Kemal) Ataturk's defeat of the Greeks? The final suppression
of the Germany's European ambitions in 1945? Or the collapse of the Soviet
Union -- very much a creature of World War I -- just over a decade ago?"
He concluded, "On a lesser but still important scale, a U.S. invasion
and occupation of Iraq introduces similar uncertainties, not just for the
geopolitics of oil, but for the broader geostrategic environment."
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