The U.S. Airstrikes In Northern Iraq Are All About Oil

This week, President Barack Obama announced that he was authorizing American airstrikes in Iraq. He described his intervention as a “humanitarian effort to help save thousands of Iraqi civilians who are trapped on a mountain” and as an effort “to protect our American personnel.” One word that he didn’t mention is “oil,” but it lies near the center of American motives for intervention.

The United States is conducting airdrops to aid the Yazidis who have fled the advance of Islamic State militants, but it is conducting airstrikes around Erbil, which is to the east. There are American consular personnel in Erbil, but they could be evacuated if necessary. What Obama left unsaid was that Erbil, a city of 1.5 million, is the capital of the Kurdish regional government and the administrative center of its oil industry, which accounts for about a quarter of Iraq’s oil. The Kurds claim that if they were to become an independent state, they would have the ninth-largest oil reserves in the world. And oil wells are near Erbil.

If the Islamic State were to take over Erbil, they would endanger Iraq’s oil production and, by extension, global access to oil. Prices would surge at a time when Europe, which buys oil from Iraq, has still not escaped the global recession.Oil prices have already risen in response to the Islamic State’s threat to Erbil, and on Thursday, American oil companies Chevron and Exxon Mobile began evacuating their personnel from Kurdistan. But oil traders are predicting that American intervention could halt the rise. “In essence we find U.S. air strikes more bearish than bullish for oil as the act finally draws a line for IS and reinforces both the stability in south Iraq and in Kurdistan,” Oliver Jakob, a Swiss oil analyst, told Reuters.

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