10.3 |
Reconstruction: oil, commercial interests, debt relief, asylum and
stabilisation policy
27.
Mr Scarlett
advised that:
•
Iraq
exported considerable quantities of oil – perhaps as much as
400,000 bpd
in 2001 –
illegally.
•
Saddam
Hussein’s regime gained some illegal revenue by applying
surcharges
to OFF
programme trade. It also controlled the distribution of goods
purchased
under the
OFF programme, adding to its ability to offer
patronage.
•
While a
sudden cut in Iraqi oil exports would cause a temporary spike in
the oil
price, the
price rise would be “moderate” (less than US$5 a
barrel).
•
The
duration of the spike would be determined by market expectations
which
were
already influenced by “jitters over the Middle East and talk of war
with
Iraq”.
28.
Sir David
passed Mr Scarlett’s note to Mr Blair the following
day.15
29.
Mr Matthew
Rycroft, Mr Blair’s Private Secretary for Foreign Affairs,
sent Mr Blair
an updated
briefing pack for the meetings at Crawford on 4
April.16
For Iraq,
that included
“further
background papers on ensuring the security of energy
supply”.
30.
Those further
background papers are likely to have been the papers provided
by
Mr Arthur
and Mr Scarlett.
31.
Section 3.2
describes the discussions between President Bush and Mr Blair
at
Crawford
from 5 to 7 April.
32.
Mr Blair
told the Inquiry that there had been “a general discussion of the
possibility
of going
down the military route but obviously, we were arguing for that to
be if the UN
33.
The Inquiry
has seen no indications that issues relating to energy security or
oil
were
discussed at the meetings.
34.
In mid-June
2002, the MOD’s Strategic Planning Group issued a paper on
UK
military
strategic thinking on Iraq to a limited number of senior MOD
addressees.18
35.
The paper
stated that with significant potential oil revenues, Iraq’s
reconstruction
should be
“self-sufficient”.
15
Manuscript
comment Manning to Blair on Minute Scarlett to Manning, 4 April
2002, ‘Iraq: Oil’.
16
Minute
Rycroft to Prime Minister, 4 April 2002, ‘Texas’.
17
Public
hearing, 29 January 2010, page 59.
18
Minute
Driver to PSO/CDS, 13 June 2002, ‘Supporting Paper for COS
Strategic Think Tank on Iraq –
18 June’
attaching Paper MOD, 12 June 2002, [untitled].
379