Bit of a different look on the war

Nathan F · Post by **Nathan F** » 2003-03-28 08:52am

OK, I wrote this over on SCN, and thought I would share it here to get your comments:

Nathan F from SCN wrote: Another thing I thought of just now.

Not to say that the US is going for oil, but what if we were.

Saddam will still be overthrown, and do you argue that the people will STILL be better off without Saddam, even if the US has control of the oil?

In my opinion, yes, they will. Even if it is a puppet government, would they be better off than they would be under Saddam?

Now, I am not saying that I would agree with a war of conquest for oil, but, would the side effect of the Iraqi people no longer having to live under Saddam necessarily be bad?

As I said, This is not what I think will happen, just a little food for thought.

Post by **K. A. Pital** » 2003-03-28 09:04am

Nathan,
they are after oil. Otherwise why the BP and other corporations people have been noticed giving advice to troops how they should deal with oil?
Why this senator-how-is-his-name protests agains Iraq supplies with European inductry machinery?

Col. Crackpot · Post by **Col. Crackpot** » 2003-03-28 09:04am

I never bought into the whole 'War for Oil' thing. The people who stand to lose the most economically (other than the Iraqi's of course) are Oil producing countries. It's the simple fact of supply and demand. For the most part, the cost of removing oil from the ground and refining it into usable petroleum products is pretty much fixed. Sure, there are some cost benefits regarding economics of scale, but fro the most part the production cost of on barrell of gasoline is almost always the same. It is not, however, always the same price to purchase a barrel of gasoline. That price is always changing due to supply and demand. That is where the oil companies make money, from selling a barrel of oil that cost them 'x' dollars to make at 2x dollars or 3x dollars. When the Iraqi oil fields come online, there will be excess capacity and excess supply. Thus reducing the benefits of economics of scale and reducing market price due to the excess supply. Therefore instead of making 2x or 3x dollars a barrell the profit margin would be reduced to say 1.5x. Using this logic isn't it safe to conclude that it is illogical for Oil companies to support a war that would lead to incread oil supply brought to the market?

Post by **K. A. Pital** » 2003-03-28 09:06am

Using this logic isn't it safe to conclude that it is illogical for Oil companies to support a war that would lead to incread oil supply brought to the market?

Not if they divide the oil already, and that's what BP and the others did. They will have extra oil, that's profitable for them.

Col. Crackpot · Post by **Col. Crackpot** » 2003-03-28 09:09am

Stas Bush wrote:
Using this logic isn't it safe to conclude that it is illogical for Oil companies to support a war that would lead to incread oil supply brought to the market?
Not if they divide the oil already, and that's what BP and the others did. They will have extra oil, that's profitable for them.

no, it's not. they would have to sell the oil at a lower price due to deflated demand brought on by the glut in supply. it is still going to cost the same to extract and refine it, but the market price will be lower therefore resulting in LOWER profets for oil companies.

Post by **K. A. Pital** » 2003-03-28 09:13am

Forgetting America desperately needs oil? And why would that result in lower profits? Having more reserves is never unprofitable.

Col. Crackpot · Post by **Col. Crackpot** » 2003-03-28 09:18am

Stas Bush wrote:Forgetting America desperately needs oil? And why would that result in lower profits? Having more reserves is never unprofitable.

YOU'RE NOT UNDERSTANDING MY ARGUMENT! increased supply does not mean increased profit! if you have to sell the same physical quantity of oil for a significanly lower price you make less money. The market price for oil WILL decrease after the war because the oil fields in Iraq will greatly add to the overall supply, without creating an increase in demand. That will drive oil prices down because of increased competition, and that will cut into the profits of oil companies! simple economics!

Post by **K. A. Pital** » 2003-03-28 09:20am

and that will cut into the profits of oil companies! simple economics!

Not so simple if we take USA Oil Reserve policy. And why you think no increase in demand there will be?

Axis Kast · Post by **Axis Kast** » 2003-03-28 09:21am

Otherwise why the BP and other corporations people have been noticed giving advice to troops how they should deal with oil.

That's right. It's largely because the oil companies know how to deal with burning oil fields and complicate machinery to which the average soldier has not been introduced.

Nathan F · Post by **Nathan F** » 2003-03-28 09:26am

Yeah, the reason that oil drillers have been brought in is for technical reasons. The average soldier would have no IDEA how to put out an oil fire.

And, Stas Bush, do you realize that the oil companies would stand to gain much more money by keeping the oil in Iraq underground and drilling domestically? It is VERY expensive to run an oil rig in the middle of the desert and have to ship it out to a refinery (of which each oil company would have to build their own, which are multi-billion dollar investments in themselves).

It just isn't economical for Bush to do this, he would stand to make much more money by opening more oil fields domestically and by starting more off shore drilling.

Col. Crackpot · Post by **Col. Crackpot** » 2003-03-28 09:34am

Bush and Cheney et al have made their money from domestic oil production. Liberating Iraq's oil fields would directly compete against domestic oil producers. By waging this war, Bush and Cheney actually hurt their own domestic business interests.

Kelly Antilles · Post by **Kelly Antilles** » 2003-03-28 09:37am

Since when does America DESPERATELY need oil?

Col. Crackpot · Post by **Col. Crackpot** » 2003-03-28 09:45am

sorry about the spelling errors

oh how i yearn for an edit button, but that would just open up another can of worms.

jegs2 · Post by **jegs2** » 2003-03-28 09:49am

Don't get me started on the lak of un edet buton -- aaaaaaaaaaaaargh!

Kelly Antilles · Post by **Kelly Antilles** » 2003-03-28 09:51am

Guys, just read over your post before you submit it. Simple as that.

Stormbringer · Post by **Stormbringer** » 2003-03-28 10:16am

If the US is doing this simply for oil why are they promising the put the oil in a trust for Iraq under UN administration?

The US might benefit from Iraq once more being allowed exports but no more than any other oil consuming nation would.

kojikun · Post by **kojikun** » 2003-03-28 11:00am

perhaps we should consider the alternative: that the US is indeed going for oil, but not to have but rather to keep out of the US and put in other markets, thus ruining BP etc and making American companies more a proftable investment in the long term.

Stormbringer · Post by **Stormbringer** » 2003-03-28 11:03am

kojikun wrote:perhaps we should consider the alternative: that the US is indeed going for oil, but not to have but rather to keep out of the US and put in other markets, thus ruining BP etc and making American companies more a proftable investment in the long term.

Which is so stupid as to not even be worth considering.

Joe · Post by **Joe** » 2003-03-28 11:23am

Stas Bush wrote:
and that will cut into the profits of oil companies! simple economics!
Not so simple if we take USA Oil Reserve policy. And why you think no increase in demand there will be?

On account of the war, yes there will be an increase in demand. However, the demand for oil is pretty inelastic, it does not vary greatly with price.

Post by **RogueIce** » 2003-03-28 12:16pm

kojikun wrote:perhaps we should consider the alternative: that the US is indeed going for oil, but not to have but rather to keep out of the US and put in other markets, thus ruining BP etc and making American companies more a proftable investment in the long term.

Is there a coherent point in there that I'm missing?

How is keeping oil out of the US going to make US companies a more profitable investment?

Queeb Salaron · Post by **Queeb Salaron** » 2003-03-28 12:29pm

Kelly Antilles wrote:Since when does America DESPERATELY need oil?

Maybe we don't desperately need oil, but we do need a reduction of prices. Desperately. In Massachusetts, we're paying on average $1.75 / gal. of regular unleaded. I know it's higher in some other places.

Does anyone remember the days of $.70 / gal gas?

Joe · Post by **Joe** » 2003-03-28 12:31pm

Queeb Salaron wrote:
Kelly Antilles wrote:Since when does America DESPERATELY need oil?
Maybe we don't desperately need oil, but we do need a reduction of prices. Desperately. In Massachusetts, we're paying on average $1.75 / gal. of regular unleaded. I know it's higher in some other places.

Does anyone remember the days of $.70 / gal gas?

Well, that's your own damn fault, for taxing the shit out of it.

Kelly Antilles · Post by **Kelly Antilles** » 2003-03-28 12:33pm

Queeb Salaron wrote: Maybe we don't desperately need oil, but we do need a reduction of prices. Desperately. In Massachusetts, we're paying on average $1.75 / gal. of regular unleaded. I know it's higher in some other places.

Does anyone remember the days of $.70 / gal gas?

Two summers ago, iirc. At least it was that low here.

Gas prices have dropped 8 cents in the past week here. It's starting to drop. No matter what happens, though, we're in a war. Gas prices will rise.

Post by **NecronLord** » 2003-03-28 12:50pm

To those who say it isn't about oil, I ask why Iraq. There are plenty of countries that are worse/more dangerous/hate america more than Iraq. Take Pakistan, It actually has Nuclear weapons, Is ruled by a general who is worse than Saddam, and has a clear and real link to Al Queada.

Kelly Antilles wrote:Since when does America DESPERATELY need oil?

They're planning ahead. There will be a time in the future when the US does desperately need oil. Isn't it logical to secure the supply now?

Post by **RogueIce** » 2003-03-28 12:53pm

NecronLord wrote:To those who say it isn't about oil, I ask why Iraq. There are plenty of countries that are worse/more dangerous/hate america more than Iraq. Take Pakistan, It actually has Nuclear weapons, Is ruled by a general who is worse than Saddam, and has a clear and real link to Al Queada.

Whoever said that we wouldn't go after them, or Saudi Arabia, or any of the other countries people like to bring up in the "Why Iraq?" question? Just because we're going after one asshole dictator at the moment doesn't mean we wouldn't, at some time, go after the others.

And, as has been pointed out before, Iraq was a target we could go after with the use of blatent military force. A place like North Korea, or Pakistan, with nukes, would hardly be a target for an all-out military strike. Other, more covert methods on the other hand, could be used (if it were deemed Pakistan, North Korea, or any others were a threat at least).