Iraq-US Relations, 1920–2003

Abstract Oil played a central role in shaping US policy toward Iraq over the course of the 20th century. The United States first became involved in Iraq in the 1920s as part of an effort secure a role for American companies in Iraq’s emerging oil industry. As a result of State Department efforts, American companies gained a 23.75 percent ownership share of the Iraq Petroleum Company in 1928. In the 1940s, US interest in the country increased as a result of the Cold War with the Soviet Union. To defend against a perceived Soviet threat to Middle East oil, the US supported British efforts to “secure” the region. After nationalist officers overthrew Iraq’s British-supported Hashemite monarchy in 1958 and established friendly relations with the Soviet Union, the United States cultivated an alliance with the Iraqi Baath Party as an alternative to the Soviet-backed regime. The effort to cultivate an alliance with the Baath foundered as a result the Baath’s perceived support for Arab claims against Israel. The breakdown of US-Baath relations led the Baath to forge an alliance with the Soviet Union. With Soviet support, the Baath nationalized the Iraq Petroleum Company in 1972. Rather than resulting in a “supply cutoff,” Soviet economic and technical assistance allowed for a rapid expansion of the Iraqi oil industry and an increase in Iraqi oil flowing to world markets. As Iraq experienced a dramatic oil boom in the 1970s, the United States looked to the country as a lucrative market for US exports goods and adopted a policy of accommodation with regard to Baath. This policy of accommodation gave rise to close strategic and military cooperation throughout the 1980s as Iraq waged war against Iran. When Iraq invaded Kuwait and seized control of its oil fields in 1990, the United States shifted to a policy of Iraqi containment. The United States organized an international coalition that quickly ejected Iraqi forces from Kuwait, but chose not to pursue regime change for fear of destabilizing the country and wider region. Throughout the 1990s, the United States adhered to a policy of Iraqi containment but came under increasing pressure to overthrow the Baath and dismantle its control over the Iraqi oil industry. In 2003, the United States seized upon the 9/11 terrorist attacks as an opportunity to implement this policy of regime change and oil reprivatization.