CHAPTER 2
"OIL AND WAR"

In the early 1970s, our staunchest ally in the Middle East was Iran, the second largest exporter of oil in the world.  The United States depended on Iranian oil and the ruler of Iran, Shah Mohammed Reza Pahlavi, depended heavily on U.S. military arms and advisors.

America had also formed close ties with Saudi Arabia, the most powerful member of the Organization of Petroleum Exporting Countries (OPEC).  In the late 1970s, however, Saudi Arabia's confidence in the United States was shaken by America's unwillingness to help the Shaw of Iran during his government's collapse.

Instability continued to plague the Middle East region.  On 22 September 1980, Iraq, led by Saddam Hussein, commenced an eight-year war with Iran.  Iraq's goal was to gain access to the Persian Gulf by seizing the strategic Shatt al-Arab waterway, where the Tigris and Euphrates rivers merge to form part of the border between the two nations.  The narrow 120-mile waterway flows into the Persian Gulf; and to expand his oil revenue, Saddam needed the outlet so he could build a major shipping port and gain access to the Gulf.

At the height of the Iran-Iraq war, Saudi Arabia and many other Gulf states became disturbed over the influence a victorious Iran might have on oil policies and Gulf security.  By 1987, the combined number of casualties between Iraq and Iran had reached nearly one million, and fighting halted shipments of nearly three million barrels of oil per day from the Gulf to the rest of the world.

Fearing Iranian attacks against its own tankers and supply ships, Kuwait, which sits on Iraq's southern border at the western edge of the Persian Gulf, sought protection from the United States, requesting American warships to escort it's tankers in and out of the Gulf region.  Though reluctant at first, the United States finally agreed.

On 22 August 1988, Iran and Iraq agreed unconditionally to accept a United Nations cease-fire resolution.  The prolonged war left Iraq's economy in shambles.  Saddled with war debt and nothing to show for the eight-year war with Iran, Saddam Hussein turned his attention to Kuwait.  Saddam demanded control of the Warba and Bubiyan Islands, which guard the entrance to the city of Umm Qasr, Iraq's only functioning port on the Gulf.  When Kuwait refused, Saddam informed Sheikh Jaber al-Ahmad al-Sabah that he had no intention of paying his country back the billions of dollars it had loaned him.

Saddam Hussein was determined to rebuild his economy and gain access to the Gulf.  He accused Kuwait of exceeding their OPEC oil quotas, driving down prices.  He also accused Kuwait of expanding its border 2.5 miles to the north, into Iraq, so it could pump oil from the rich Rumaila oil field.  Iraq's foreign minister, Tariq Aziz, said Kuwait's actions were "tantamount to an act of war."

In the early morning hours of 2 August 1990, more than 100,000 Iraqi soldiers stormed into Kuwait.  It took less than one day for Saddam Hussein to seize Kuwait and gain control of 20 percent of the world's oil supplies.  Saddam Hussein instantly became the strongest leader in the Arab world and declared that oil should be used as a weapon against the United States and Israel.