Untitled Document
From the first year of the Bush Administration in 2001, through the
run-up to the Iraq War in 2002 and in the first year of the occupation, 2003,
ExxonMobil was the top seller of petroleum products and services to the
Pentagon, taking in about $2 billion in taxpayer money for those threeyears.
However, in 2004, Royal Dutch Shell was the number one top seller for the year.
With Shell's continued high level of sales in 2005, it became the overall
top seller of petroleum to the U.S. military between 1999 and 2005, at $4.08
billion, compared to ExxonMobil's $3.90 billion for the same period.
Close behind these firms in total sales to the U.S. military was BP (British
Petroleum) at $3.54 billion for the 1999 - 2005 period. The next largest
seller to the Pentagon was Valero, at $1.87 billion for the same period.
ExxonMobil, Valero and other U.S. oil companies not only lost market share
to BP and Shell but to the Middle East oil producer nations of Abu Dhabi,
Bahrain, Kuwait, Saudi Arabia and Qatar. Since the 2002 preparations for the
Iraq invasion and through 2005, the Pentagon has purchased a total of $2.15
billion in petroleum products from national oil companies of these countries
in sales registering among the top 10 suppliers of each year. This represented
about 14 percent of the $15.2 billion in total sales by the top 10 sellers
from 2002 to 2005.
Other major foreign sellers of petroleum products to the Pentagon were Saangyong
(Korea) and Motor Oil Hellas (Greece). Russia's Lukoil is believed to have
been a major seller to the U.S. military through Refinery Associates of
Texas.
The military sales information was provided to Consumers for Peace.org by the
Defense Energy Support Center (DESC) and appears in tables at the end of
this article.
Officials of DESC and other observers say that the petroleum contracts are
generally based on the best price and the proximity of the petroleum products
to the U.S. forces needing them. Hence, purchases from the Middle Eastern
oil companies have increased with the level of U.S. military activity in
Iraq. In a number of cases, based on reports by the Center for Public Integrity,
it appears that a significant proportion of purchases from the Middle Eastern
companies have come through no bid contracts, for reasons of urgency and
sole sources. A DESC spokesperson said that no-bid contracts often become
subject to bid over time if the need continues for the products from a certain
area.
The heavy proportion of foreign petroleum sales to the U.S. military raises
a question of how dependent that military is on foreign oil. The DESC spokesperson
and another expert say that the U.S. can get all its oil from U.S. firms
if necessary, but transportation and storage costs would dramatically increase
the cost. Much of the oil sold by U.S. firms comes from crude pumped in
other countries; it is not clear what constraints would be placed on the
military if it could use crude pumped only from U.S. territory.
Iraq Profits, More to Come?
The DESC statistics show that the Iraq invasion and occupation of been profitable
for ExxonMobil and other of the world's largest oil oil corporations in
terms of direct sales to the U.S. military.
In addition, uncertainty in the world oil market caused by the Iraq War and
its unpredictable effects on oil production and shipments from the Middle
East have been major factors in pushing oil prices to the $70 a barrel level,
a level that has brought enormous profits to major oil companies. The Iraq
War has a key factor resulting in an estimated $7 billion in unearned war
profits for ExxonMobil out of its record $36 billion profit in 2005, according
to Dean Baker, co-founder of the Center for Economic and Policy Research
in Washington, D.C. We have not obtained estimates of such unearned profits
for other oil firms. However, a report on the cost of the Iraq War, published
in January, 2006 by Linda Bilmes, of Harvard University, and Joseph Stiglitz,
Noble Prize-winning economist at Columbia University, estimates that $25
billion was lost by U.S. consumers in 2005 because of oil market conditions
traceable directly to the Iraq War.
The major oil firms are looking beyond immediate returns in Iraq, hoping to
get highly profitable access to Iraq's oil reserves, said to be the second
largest in the world after those of Saudi Arabia. Crude Designs, published
by the British group Platform, reports that the U.S. State Department was
involved before the occupation in drafting model oil agreements to be used
by the "new" Iraqi government, agreements that, if signed, would bring
major oil companies huge profits compared to what is available from other nations.
Greg Muttitt, author of the report, told Consumers for Peace that Lukoil,
Shell, ConocoPhillips and ChevronTexaco, may have an even keener interest in
Iraq than ExxonMobil, because of their own individual needs.
TOP TEN SELLERS OF PETROLEUM PRODUCTS AND SERVICES TO THE U.S MILITARY
Source: Defense Energy Supply Center
Fiscal year 2005 Spending in millions.
1. BP $1,604.1 million
2. ExxonMobil $1,024.4
3. Royal Dutch Shell $1,003.7
4. Valero $564.4
5. Bahrain Petroleum Co. $380.3
6. Kuwait Petroleum Corp. $330.3
7. Saangyong (Korea) $264.8
8. Motor Oil (Hellas) (Greece) $229.0
9. Merlin Petroleum Co. Inc. $226.1 (Merlin is a CT. oil
broker)
10. International Oil Trading Co. $214.0 (Boca Raton, Florida)
Fiscal year 2004
1. Shell $1,067.6
2. BP $601.9
3. Valero $333.7
4. Abu Dhabi National Oil Co. $276.5
5. ExxonMobil $274.8
6. Ssangyong $233.3
7. Kuwait Petroleum Corporation $211.5
8. Motor Oil (Hellas) $197.4
9. Bahrain Petroleum Company $196.5
10. Refinery Associates of Texas $121.3 (An oil broker)
Fiscal year 2003
1. ExxonMobil $729.3
2. Shell $538.0
3. BP $441.7
4. Valero $314.3
5. National Oil Dist. Co. (Qatar) $220.6
6. Tesoro $204.7
7. Motor Oil (Hellas) $197.7
8. Saudi Arabian Oil Co. $190.1
9. Ssangyong $187.6
10. Paramount Petroleum Corp. $130.7
Fiscal year 2002
1. ExxonMobil $567.2
2. Shell $538.3
3. BP $329.9
4. Valero $246.4
5. Caltex $199.4
6. Kuwait Petroleum Corp. $183.4
7. National Oil Dist. Co. (Qatar) $177.4
8. Bahrain Petroleum Co. $158.2
9. LG-Caltex $155.8
10. Refinery Associates of Texas $142.2
Fiscal year 2001
1. ExxonMobil $711.6
2. BP (BP/ Arco/ Amoco) $561.9
3. Equilon Enterprises (Shell) $466.3
4. Valero $303.6
5. Motor Oil (Hellas) $206.5
6. Coastal Aruba Refining $146.6
7. LG Caltex $145.1
8. Navajo $121.8
9. Paramount $94.4
10. Tesoro $88.6
Fiscal year 2000
1. Equilon Enterprises $264.9
2. Arco Products $236.0
3. Exxon Corp. $160.9
4. Motor Oil (Hellas) $148.4
5. Mobil Oil Corp. $135.5
6. Conoco Inc. $128.6
7. Navajo $121.0
8. Valero $108.4
9. Coastal Aruba Refining Co. $102.2
10. Tesoro Hawaii Corp. $86.6
Fiscal year 1999
1. Mobil Corp. $207.0
2. Equilon Enterprises $202.9
3. Arco Products Co. $123.4
4. Coastal Refining $115.7
5. Motor Oil (Hellas) $104.5
6. Exxon Corp. $92.0
7. Caltex $87.1
8. Refinery Associates of Texas $71.4
9. Conoco $63.0
10. AGIP Petroli SPA $57.6
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