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Overstating Iraq Pullout Worries

By Ivan Eland
July 11, 2007

Editor's Note: The disastrous Iraq War has left policymakers weighing what's worse: the current havoc or what might follow a U.S. military withdrawal. George W. Bush is pinning his hopes for continuing the war on convincing Americans that things could get much worse.

In this guest essay, however, the Independent Institute's Ivan Eland argues that the dire predictions are overstated:

As Congress begins to consider the Iraq War funding bill, defections by important Republican senators have caused a White House debate on whether to try to get ahead of the onrushing train to leave Iraq.

In the Bush administration’s surreal parallel universe, this “post surge redeployment”—normal people would call this a withdrawal after a failed attempt at escalation—would consist of halving the number of U.S. combat forces policing dangerous areas in Iraq and letting the remainder conduct the less dangerous missions of guarding Iraq’s borders, training Iraqi security forces, and keeping al Qaeda off balance in the country.

While this reduced footprint would be intended to slow Iraq’s downward spiral and allow the United States to keep coveted military bases in Iraq to protect Persian Gulf oil, it is not a viable long-term U.S. strategy.

Iraq is rapidly becoming unglued, and the war-weary American public—as well as the presidential candidates of both parties pandering to them—is likely to demand a complete and rapid withdrawal of all forces from Iraq. This policy is the correct one and its ill effects have been vastly overstated.

Even the worst-case scenario after a total U.S. withdrawal—a full-blown Iraqi civil war that drags in neighboring states—would be bad for Iraqis, but it would have only minimal effects on U.S. security.

Frankly, no one would care what happened in Iraq if it weren’t for its large oil deposits. Yet Iraq’s oil production has never recovered from decades of wars and grinding economic sanctions.

Even if one of the U.S. motivations for invading Iraq was to replace military bases being lost in Saudi Arabia, the United States has successfully “defended” oil before in the region without having permanent bases for land and air forces—in 1991, after Saddam Hussein invaded Kuwait.

In that instance, the United States brought in forces from the United States. In the end, the U.S. government obtained permanent bases only after the threats to the oil from the Soviet Union and Saddam Hussein had collapsed or greatly diminished.

Besides, bases in Iraq set up to project U.S. power in the Gulf region are of greatly reduced value if they are constantly under assault from unfriendly Sunni and Shi’ite militias fighting in a civil war.

Many economists would even question whether the U.S. government needed to “defend” oil using military forces.

Oil is a valuable commodity and large amounts of money can be made selling it. Gulf nations do not have much else to sell to generate revenue—between 65 to 95 percent of their exports come from oil.

Even an Islamist regime, such as Iran, has not shut off oil exports, because it needs money to promote its radical agenda. Thus, using expensive U.S. military forces to defend oil flows that are not in jeopardy seems foolhardy.

Although oil is not likely to be cut off, however, it could go up in price if instability, such as a full-blown civil war in the Gulf, results. Yet recent history shows that industrial economies are more resilient to increases in oil prices than is commonly believed.

According to Donald L. Losman, an economist at the National Defense University in Washington, D.C., from the fourth quarter of 1998 until the third quarter of 2000, Germany experienced a crude oil price rise of 211 percent but continued to experience economic growth with declining unemployment and inflation.

In 2006 and 2007, the United States experienced significant increases in the price of oil but similarly maintained economic growth with low inflation. Thus, even much higher oil prices caused by any instability in Saudi Arabia, for example, could be weathered.

Of course, the main cause of instability there would likely be Islamist outrage from the U.S. invasion and occupation in Iraq and U.S. support for the corrupt Saudi regime. The United States could end that support but still buy Saudi oil.

Thus, if the Saudi monarchy were overthrown, the new regime probably would not have as much hatred for the United States as did the Islamist Iranian regime when it took power. Moreover, any new Sunni Islamist regime in Saudi Arabia, like the Shi’ite one in Iran, would have the same incentives to sell oil into the world market.

Similarly, if the Iranians gained control over southern Iraqi oil in any Iraqi civil war, they would likely keep selling it.

If Persian Gulf oil will flow despite any full-blown Iraqi civil war, what about Israel’s security? Although instability in the area is not good for Israel, having its primary enemies—the Sunni Arab states and Shi’ite Iran—fight over Iraq might not be all that bad for the Jewish state.

Besides, Israel’s security is ultimately guaranteed by its wealth and its 200 to 400 nuclear weapons.

What if Turkey invaded Iraqi Kurdistan to prevent that area from being used to inflame its own Kurdish population? Although this development would be bad for the Iraqi Kurds, it would have little effect on U.S. security. Kurdistan is a small area in a remote region of the world.

In sum, if the myth is properly debunked that instability in the Persian Gulf will disrupt Western economies, even an all-out civil war in Iraq doesn’t look that bad for U.S. security.

In reality, the U.S. government’s primary goal seems to be to use military force to control the flow of oil to other nations, such as China and Europe.

The Bush administration should give the U.S. taxpayer a break and abandon this expensive and imperial goal. In fact, it may be forced to do so as the clamor for a complete U.S. withdrawal from Iraq rises.

Ivan Eland is Director of the Center on Peace & Liberty at The Independent Institute and Assistant Editor of The Independent Review. Dr. Eland has been Director of Defense Policy Studies at the Cato Institute, Principal Defense Analyst at the Congressional Budget Office, Evaluator-in-Charge (national security and intelligence) for the U.S. General Accounting Office, and Investigator for the House Foreign Affairs Committee.

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