This past Thursday, Dec. 21, Iraqi Defense Minister Lt. Gen. Sultan Hashed Ahmed said his country could destroy Israel and that it was ready to confront any aggression against the Arabs. “Iraq can destroy Israel because it possesses a large combat experience in dealing with all possibilities,” Ahmed told the weekly Al-Zawraa newspaper in an interview to be published next week.

He said Iraq would not hesitate to send its armed forces to defend an Arab country targeted by Israel.
He said the Iraq military was prepared to deal with any potential aggression. He also said there could be no peace in the Middle East until Israel returned the land to the Palestinians. Ahmed said there was no military coordination between Iraq and the other Arabs over a potential conflict with Israel, but said that several states, including Syria, were satisfied with Iraq’s position on the violence in the Middle East.

The day before that, Middle East News Line reported that U.S. intelligence sources have confirmed reports that Iraqi troops have again moved west toward the Syrian border. They said more than a division appears to be deploying with several hundred tanks but without air power.

Then, just yesterday, Friday, Dec. 22., Israel’s military intelligence chief , Maj.-Gen. Amos Malka, said Iraq seeks to launch a missile attack as part of a regional war with Israel and is looking for an opportunity to join an Arab coalition with Syria in such a war. He said Baghdad is reconciling with Syria, which sees Iraq as providing the regime in Damascus with strategic depth. Iraq has also mended its fences with Iran in order to pursue this war against Israel.

It is important to keep our eye on the ball here. The worst problem is not the likelihood of a direct missile attack on Israel by Iraq. The real problem which this administration has created is the coalition between Iraq and Arab states that were our allies in the Gulf War and, as a product of that coalition, the loss of control of the OPEC monopoly by our staunchest allies in that war, Saudi Arabia and Kuwait to a group comprised of Iraq, Iran, Venezuela and others — nations not on our side but which are increasingly allied with communist China. Oil is the weapon we need to keep our eye on.

On Oct. 14 , U.S. Secretary of State Madeleine Albright had denied that we were obtaining Iraqi oil despite U.S. Department of Energy statistics pinpointing Iraq as our sixth largest supplier. In the first seven months of this year we purchased 585,000 barrels per day of Iraq’s oil. We continued to develop this dependence up to the point, on Nov. 30, when the flow of Iraqi export oil was halted by Iraq, leading to their announcement the following day, on Dec. 1, that they would export no more unless the buyers would pay a 50-cents-per-barrel surcharge into a fund outside the control of the United Nations Oil for Peace Program. They will now spend the money not on food for Iraqis, but on arms for Palestinians.

In the months leading up to this cut-off, the price of oil was high, enabling Iraq to build up — through its portion of the U.N.-monitored sales and its black-market sales such as those through the tanker truck pipelines into Turkey and Jordan and small tanker movements outside the monitoring system — the cash reserves it needs to outwait us as we seek to enforce the U.N. sanctions. Immediately upon announcing the cut-off, it announced a long term contract with India of unmonitored sales outside the U.N. system.

This is a further tightening of the Chinese and OPEC “oil noose” around our national neck. It signals a strategic victory for Iraq and a serious strategic loss for us. This is so, not because we cannot compensate for the deprivation of the Iraqi oil and bring the price down somewhat. For we can, and we are. No, the strategic cost for us is that it is Europe that is going to feel the tightening of the noose more immediately, and is going to desert us, as it did leading up to Vietnam, and is going to increase its logistical cooperation with, and dependence upon, Iraq and China — and Russia.

Daily our pilots are over Iraq supposedly keeping Saddam Hussein “in the box” that we put him in during the Gulf War. Our planes don’t fire at Iraq’s growing oil and power industry, but it is this which is the present threat to us and to our allies in the Middle East. It is this which Saddam was building on our dollars even as he rebuilt his weapons of mass destruction, which he won’t even need unless we counter this more immediate threat. It is this capability which strips Europe from us so that it will assist him and the Chinese and the Russians in a showdown, and not us. The Arab nations are no longer prepared to ostracize Iraq as they did under our leadership in the Gulf War. As of Nov. 2, aircraft from Arab and European countries continued to land at Baghdad’s Saddam International Airport in spite of a U.N. ban: Since the airport reopened in August, planes from 40 countries have flown into the Iraqi capital.

All through November and into December, while America was preoccupied with the Clinton-Gore attempts to reverse the results of the Nov. 7 election and our news media were occupied 24 hours a day with that effort, Saddam’s destruction of the sanctions regime against him increased. He is shredding it with impunity in a carefully built up and orchestrated effort which is the culmination of years of “expanding the envelope.” Openly defying the U.N. and daring it to do anything about it, Iraq has started shipping oil in a pipeline to Syria. The slapping of a surcharge on its oil exports in violation of the U.N. mandate is a well thought out final step to destruction of the sanctions as an effective containment. Saddam has taken control of the revenues from the oil exports to do with as he pleases. He knows that with the price of oil at its present level, the portion of the sale price that previously went into the U.N. controlled program “for peace” but that is now under his control, makes up for the lesser amount of oil which he may export until such time as we are powerless to make sanctions work in even a token manner.

One of communist China’s state-owned, but now Western-style, integrated oil giants has purchased 40 percent of Iraq’s oil company. Already one of the largest oil companies of our ally, France, is in the game in a big way, improving the technology of Iraqi oil production for oil commitments outside the sanctions.

So much for the defeated and vanquished in the Gulf War. How are things going with our victorious allies, the Saudis, whom we saved from Iraq’s conquest and despotism, along with Kuwait?

Well, in financing so much of the Gulf War victory, the Saudis incurred a huge debt, which they then increased greatly by undertaking to arm themselves with the most expensive U.S. weaponry. As a result of that and the price of oil staying so low during the years leading up to the present steep rise, the Saudis, despite their vast oil reserves, still the largest in the Middle East by far, are in debt and have not, at present, the infrastructure to produce, refine and ship much additional oil. The begging of the Saudis by Clinton and his energy secretary and the refusals of these requests are a charade.

For 10 years the Saudis have been running deficits from which they are only beginning to recover with the new high oil prices. In the past two years they have had deficits of 24 billion. In the low price years of 1996 and 1997 they canceled all of their upstream and refining projects except for two. They don’t have the additional super tankers, refinery expansions and terminal facilities to increase their production as is assumed. They cannot pay off what they currently have installed in petrochemical plants much less push for immediate expansion of their facilities and capacity unless we were to fund it with massive aid. Saddam Hussein is flush with cash but the Saudis are not. If the Saudis lower the price to help us, they hurt their own economy and risk going back to the financial downturn from which they are emerging.

We have previously pointed out that our forward planning for oil assumed additional large production from Venezuela, which is no longer there because

President Chavez and his government are in league with the communist Chinese and Castro, not us.
Now it is becoming clear that another key part of our assumption about oil supplies for any military efforts we must undertake is also collapsing. The Saudis cannot just up their production and provide us with oil and they cannot any longer lead the rest of OPEC in doing so. They are locked into a position where the only leadership which they can exert in order to control their dominance of OPEC is to outspend Saddam Hussein and the Iranians in giving money to the Palestinians for the destruction of Israel, which is what they are doing. This situation has not solidified our lightening-strike military victory over Saddam in 1991; it has undone it, and we will be hard put to get it back.

The coalition which President Bush skillfully built up with such success that it even locked the Iraqis out of satellite intelligence has been shattered. We may never see it again. President Clinton began this early on with his militarily silly 27-cruise-missile strike against Iraq, which had no viable military function but which boosted his domestic polling numbers while it began the process of destroying our strategic accomplishments and boosting those of the Chinese communists. It appears that the Gulf War is no more over than the Cold War. Under Clinton both have been revived and we are on the losing side. It is now only a matter of a few years before we will be forced out of the Persian Gulf unless some effective steps are taken to reverse what Clinton has done and turn back the forces which he has set in motion. At this point this can best be done by skillfully beginning the removal of the oil noose from around our necks.

Adm. Thomas H. Moorer (U.S. Navy, ret.) is a former chairman of the Joint Chiefs, chief of Naval Operations, commander in chief Pacific, supreme Allied commander Atlantic and commander in chief Atlantic Fleet. He is the Honorary Chairman of

U.S. Defense-American Victory
in Washington, D.C. Larry Elgin, JD, is the Chairman of USD-AV. Dr. Steve Rinehart, Ph.D., has an extensive background both in the oil business and in weapons systems. He is in charge of USD-AV’s Truth About Oil Project.

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