An extended war with Iraq would have severe consequences that are likely unanticipated by the US and its allies, said some academic experts at a Jan. 17 forum on Middle East oil at the University of Houston.
The world economy is "in good shape to weather a quick, victorious war" between Iraq and US-led forces, "said Joseph A Pratt, Cullen professor of history and business at the University of Houston. But the world economy is not prepared "if this becomes a real war instead of a TV war" as was Desert Storm in 1991, he said.
If anticipated military action against Iraq bogs down or—even worse—spills over into other Middle East oil-producing countries, Pratt predicted, "The US will have no allies in a long war, including about half of the US (population) if large numbers of body bags start coming home."
The short-lived Desert Storm operation in 1991 "taught us as a nation that we can fight short, cheap wars with (virtually) no casualties," said Pratt. "It left us vulnerable as a nation to the idea that we can do what we say we're going to do in Iraq in the next few months."
However, he said, "History teaches us clearly that we can't forecast the long-term impact of any war in the Middle East. Every war in that area has brought about fundamental changes in the Middle East that were never anticipated at the start of the war."
Several dangers
One of several "unspeakable" dangers that could come from anticipated military action against Iraq is an escalation of terrorism against the US, Pratt said.
Meanwhile, other members of the Organization of Petroleum Exporting Countries have warned that they can't make up simultaneous loss of production from both Iraq and Venezuela, where oil production and exports have been crippled by a general strike now in its ninth week, aimed at ousting Venezuela President Hugo Chávez.
"The potential problem of losing 5 million b/d (of world oil supplies through a war in Iraq and the Venezuelan strike) should not be taken lightly by anybody," warned Michael J. Economides, professor of chemical engineering at the University of Houston. "The loss of 3 million b/d could drive oil prices above $40/bbl," he said.
"With $40/bbl oil, we can survive," said Herman Franssen, currently with International Energy Associates, and formerly senior economic advisor to Oman's energy minister and chief economist of the International Energy Agency. However, he noted, "Politicians react to (an energy) crisis with policies, right or wrong."
If a war with Iraq becomes a protracted struggle, he said, "It could provide the push for the Republican Congress to open ANWR (the Arctic National Wildlife Refuge) to exploration."
Production shortfall
Franssen decried the popular concept among some politicians that Russia and other members of the former Soviet Union can somehow make up any shortfall of Middle East oil if the war escalates to neighboring countries. Russia's production is shrouded in mystery, he said. "We don't know where Russian oil is coming from, how much is from new fields or from old fields, or whether they are producing at maximum to sustain cash flow," he warned.
Some "65% of the world's oil reserves are in the Middle East, so we can't get away from it," Franssen said. "Saudi Arabia can produce 10.5 million b/d of oil. It has maintained spare (production) capacity at a cost, in exchange for US protection against foreign invasion." Saudi Arabia can increase its production to 9.5 million b/d within a few weeks and above 10 million b/d in 90 days, he said.
However, he acknowledged, "US relations with Saudi Arabia have changed" since the terrorist attacks against the US on Sept. 11, 2001. And because of the trade embargo imposed against Iraq since 1991, Franssen said, among most Iraqi citizens, "the US is almost as hated as Saddam Hussein."
He said, "We are perceived to be the enemy" by many Middle East residents. "If we go into Iraq, I don't think it's going to be easy," said Franssen, "It's not necessarily going to be a piece of cake."
The conference was the first in a planned series to address social, political, and economic issues from various perspectives, officials said.