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In the five years since the United States, the United Kingdom and other members of the “coalition” invaded and occupied Iraq, an estimated one million Iraqis have died because of the war, along with nearly 4,000 American and more than 300 other coalition military personnel.
In this same 5-year period, your firm has reported profits totalling $113.75 billion. I would like to suggest that about $28 billion of this amount is war profit, that portion of profits Shell has realized solely because of the Iraq War. Let me explain.
In response to our request, Dr. Dean Baker, Co-Director of the Center for Economic and Policy Research, estimated that 20 to 30 percent of ExxonMobil’s 2007 profit can be traced directly to the Iraq war because of: (1) decreased Iraqi oil production caused by the war; (2) inflation in the price of a barrel of oil because of the uncertainty in the oil market created by the Iraq War, which constantly threatens to explode its infection of violence into other parts of the Middle East.
“I’m just speculating,” Dr. Baker said, “but the price of oil is probably about $10 to $22 a barrel higher because of the war” given the above factors. “If (oil) prices were 10-20 percent lower, Exxon’s profits might be 20-30 percent lower. Dr. Baker made a similar analysis of ExxonMobil’s 2005 war profits, and applying this standard to ExxonMobil’s profits from 2003 through 2007 we arrive at the estimate of $39 billion in war profits over the five war years. We believe this same analysis can be applied to Shell, hence the estimate of $28 billion in war profits for Shell since 2003
Dr. Baker’s observation about the impact of the Iraq War on the price of oil is reinforced in a 2006 report “The Economic Cost of the Iraq War: An Appraisal Three Years After the Beginning of the Conflict” by expert in public finance, Professor Linda Bilmes of Harvard’s Kennedy School and the 2001 Noble Laureate in Economics, Professsor Joseph Stiglitz, of Columbia University:
“We believe…the impact of Iraq on oil prices is a large proportion of the $45-a-barrel increase since the war began…Given U.S. imports of roughly five billion barrels a year, a $10-per-barrel increase translates into an extra expenditure of approximately $50 billion. Americans are poorer by that amount…if we base our estimates on a $10 price increase, and assume…it extends for at least six years, the cost is $300 billion.
There is circumstantial evidence that Shell, along with other major oil firms, was involved in consulations with the U.S. government on Iraq prior to the invasion and occupation with an eye toward access to Iraq’s vast pools of oil. In addition, there is evidence that Shell has been eager to promote a new oil law for Iraq that would give exceptional profits to foreign oil firms. (See ConsumersforPeace.org and Hands Off Iraqi Oil. org)
But, the war has proven profitable to Shell even prior to the firm’s gaining access to some of Iraq’s oil pools, not only because the war has run up the price of oil but because Shell has benefited from oil sales to the Pentagon totalling $5.6 billion between FY 2003 and 2007.
- Pay $28 billion, Shell’s war profit for the last five years, into a fund that will make direct payments to families of Iraqi, U.S. and other coalition war dead and wounded, in proportion to their numbers, through Iraqi Red Crescent, the U.S. Veterans Administration and the International Committee of the Red Cross. (Note that we are making similar war profit requests of ExxonMobil [$38 billion] and BP [$13.3 billion], which would lead to the creation of a war profit-war relief fund totalling approximately $80 billion. Over the next few months we will make war profit requests of other major oil companies to increase this fund.)
- Make public statements urging the Congress to immediately cut off all funding for the occupation of Iraq except for what it takes for an immediate, total withdrawal of all U.S. military forces and U.S.-employed private military forces and the closure of all U.S. Iraqi bases.
- Make public statements notifying the Iraqi and United States governments that Shell is stopping all lobbying for the passage of any Iraqi oil legislation and urging Congress to eliminate passage of an Iraqi oil law from the list of benchmarks established in the U.S. Troop Readiness, Veterans Care, Katrina Recovery and Iraq Accountability appropriations Act of 2007.
Nick Mottern, Director, ConsumersforPeace.org