While the Iraqis were busy counting their death toll of more than 650,000 since March 2003, stealthily and suddenly the US occupation’s oil prize rang louder than the war drums to alert the regional oil producers as well as the major world consumers to guard against the looming threat coming out of Iraq.

Without a decisive military victory, the US occupation of Iraq seems to be about to grab its oil prize. This prize has been the dream of the successive US administrations; on Jan. 18, it came one step closer to reality when Iraq’s Oil Committee approved the new draft hydrocarbon law, sent it to the Cabinet within a week and, when approved, will go to the Parliament immediately thereafter.

The early draft of the law was prepared by BearingPoint American consultants, hired by the Bush administration, and sent to the White House and major Western petroleum corporations in July, and then to the International Monetary Fund two months later, while most Iraqi legislators and public remained in the dark.

The approved production-sharing agreements (PSAs) favor investing foreign oil companies with 70 percent of oil revenue to recoup their initial outlay, and then companies can reap 20 percent of the profit without any tax or other restrictions on their transfers abroad.

The Republican-Democratic electoral wrangling, no matter how ferocious it was or would become over internal issues, could not overlap a “red line” consensus on never compromising the US national oil strategic interests, which both parties are determined to defend regardless of how much American or non-American blood would spill in their defense.

The bipartisan Iraq Study Group Report articulated that consensus concisely in a straightforward language. It is noteworthy that Bush who ignored the essential recommendations of this report had selectively adopted recommendations 62 and 63. Recommendation 63 stipulates the US should “assist” Iraqi leaders in privatizing the national oil industry into a “commercial enterprise” to encourage investment by the multinational oil companies.

Recommendation 62 urges the US government to help draft an Iraqi oil law that “creates a fiscal and legal framework for investment” and, in conjunction with the International Monetary Fund (IMF), to “press Iraq to continue reducing subsidies in the energy sector...until Iraqis pay market prices for oil products.”

Bush made his first public demand of the Iraqi government to pass the oil law in December. In July last year, his Energy Secretary Bodman announced in Baghdad that senior US oil company executives would not enter Iraq without passage of the new law. Petroleum Economist magazine later reported that US oil companies put passage of the oil law before security concerns as the deciding factor over their entry into Iraq. Passing an oil law has been also a key demand of the United States in providing further military support to Baghdad’s “national unity government.”

Washington has been unsuccessfully trying to camouflage its oil prize in Iraq since its invasion in 2003 and similarly it can hardly now smokescreen the oil factor in the escalating crisis with Iran.

— Nicola Nasser is an Arab journalist based in Ramallah, West Bank.