There will be no respite from rising international oil prices, according to internationally renowned oil expert Dr. A.F. Alhajji. Delivering a lecture at Observer Research Foundation (ORF), New Delhi, on July 26, 2005,
There will be no respite from rising international oil prices, according to internationally renowned oil expert Dr. A.F. Alhajji.
Delivering a lecture at Observer Research Foundation (ORF), New Delhi, on July 26, 205, Dr Alhajji, Professor of Economics at Ohio Northern University, predicted that prices of petroleum products would keep on increasing because of the continuing volatility of the international market.
Talking on the contradictions in US energy policy Dr. Alhajji said the invasion of Iraq by the United States and the following terrorist activities have resulted in decrease in the production of oil in Iraq, the second largest producer of oil.
He said said Iraq used to produce 3.2 million barrel per day (mb/d) in the pre-invasion period while the production has come down to 2 mb/d now despite all the efforts of the United States.
Citing the example of Iran, Kuwait and Russia, Dr Alhajji said it took on an average three years after reaching normalcy to stabilize oil production in any country affected by instability. It would require many more years to stabilize oil production in Iraq, as a result of the ongoing turbulence there, he noted.
Dr Alhajji painted a grim picture of oil price volatility because of the chances of the Sunni-Shia conflict getting enlarged into other regions of the world and increasing terrorist activities against oil establishments.
Observing that oil reserves in Iraq were not worth the war, Dr. Alhajji argued that the US Administration did not invade Iraq for its oil as was the popular assumption. He pointed out that the US imported more oil from Iraq when it was America's enemy than when it was a friend earlier.
Dr Alhajji also noted that the US had absolute control over Iraqi oil production during the period of the UN oil-for-food programme when President Saddam Hussain was forced to keep on increasing production to meet the two billion dollar goal. "I don't think the US went to war with Iraq for just oil. Its oil reserves are not worth the war. The US has spent more on the war than the worth of oil reserves in Iraq," he said.
Dr Alhajji also rejected the view that the US was interested in cheap oil. "Cheap oil hurts most the US oil companies. High energy costs fit these companies most," he said.
Dr Alhajji said more than oil, it was the overall empowerment from this precious reserve, which led to economic strength, military power and other aspects that led the US to invade Iraq.
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