NptBchLady comment: In the years prior to Dubya's War, oil from Iraq constituted the largest portion of California's imported oil because it was cheapest to refine for California's special requirements.

Even with the below documented excesses this, and other, "embargo leakage" was depressing the oil market and hurting Texas and Saudi profits.

Gasoline was selling in Orange County California for 87 to 89 cents per gallon in the fall before we took our military from the fight against terrorism.

Dubya effectively stopped the Iraqi source of cheap oil.

NY Times
Report Cites
U.S. Profits in Sale of
Iraqi Oil Under Hussein

October 9, 2004

WASHINGTON, Oct. 8 - Major American oil companies and a
Texas oil investor were among those who received lucrative
vouchers that enabled them to buy Iraqi oil under the
United Nations oil-for-food program, according to a report
prepared by the chief arms inspector for the Central
Intelligence Agency.

The 918-page report says that four American oil companies -
Chevron, Mobil, Texaco and Bay Oil - and three individuals

including Oscar S. Wyatt Jr. of Houston were given vouchers
and got 111 million barrels of oil between them from 1996
to 2003. The vouchers allowed them to profit by selling the
oil or the right to trade it.

The other individuals, whose names appeared on a secret
list maintained by the former Iraqi government, were Samir
Vincent of Annandale, Va., and Shakir al-Khafaji of West
Bloomfield, Mich., according to the report by the
inspector, Charles A. Duelfer.

The fact that these companies and individuals received oil
from Iraq does not mean they did anything illegal,
on the program said. Such allocations may have been proper
if the individuals and companies received appropriate
United Nations approval.

In interviews on Friday, spokesmen for the oil companies
and for the El Paso Corporation, which assumed control of
the assets of a company, Coastal Corporation, once run by
Mr. Wyatt, said the transactions had been legal. But each
confirmed that they had received subpoenas from a federal
grand jury in New York, which is investigating
"transactions in oil of Iraqi origin" as part of the
oil-for-food program, according to a federal financial
filing by El Paso.

The largest of the allocations went to Mr. Wyatt, who the
list said had received allocations totaling 74 million
barrels. At the profit rates of 15 cents to 85 cents per
barrel that were reported in the arms inspector's study, he
could have earned $23 million. The names of the American
companies and citizens who benefited from the vouchers were
not included in the published report prepared by the Iraq
Survey Group that was released Wednesday by the C.I.A.,
since the names of American individuals cannot be publicly
disclosed under privacy laws. But the names were contained
in unredacted copies given to the White House and to
several Congressional committees. A copy of the unedited
list was shown to The New York Times.

Tony Fratto, a Treasury Department spokesman, said United
States sanctions on Iraq had prohibited American companies
and individuals from interacting directly with Iraqi
officials. But the oil dealers were permitted to get
special authorization from the federal government to bid on
United Nations contracts under the oil-for-food program. He
said the agency was "actively investigating" whether the
American entities and people circumvented that requirement.

Reid Morden, the staff director of the Independent Inquiry
Committee, the United Nations-appointed panel headed by the
former United States Federal Reserve chairman, Paul A.
Volcker, said his committee too was "reviewing" the new
report "to see if it helps us with our investigation."

The oil-for-food program, which was started in 1996, was
intended to allow Iraq, in a closely monitored way, to sell
enough oil so that the country would have the resources to
buy food, medicine and to maintain certain critical public

The program was abused when Saddam Hussein intervened,
personally selecting individuals and companies to receive
oil allocations. The allocations, also called vouchers,
could be sold so that the recipient approved by Mr. Hussein
did not have to trade the oil but could simply profit from
the transaction.

Ultimately, Mr. Hussein began to demand kickbacks in return
for these oil allocations, a requirement that some oil
dealers were willing to honor given the large profit
margins associated with oil trade.

The proceeds may have been used by Mr. Hussein to pay for
purchases of arms in violation of sanctions, the report

Among American companies and citizens, Mr. Wyatt, who did
not respond to messages left on Friday at his Houston
office, was by far the largest recipient of oil
allocations, as recorded on the secret list maintained by
the Iraqi government, the report says.

For decades, Mr. Wyatt has been a hard-driving - and
controversial - oil merchant who did business with Col.
Muammar el-Qaddafi of Libya and helped rescue hostages in
Kuwait. In 2000, his Coastal Corporation merged with the El
Paso Corporation. Mr. Wyatt is still a large shareholder in
El Paso, but he is not an executive with the company, which
last month received the subpoena related to the Iraqi oil

Mr. Khafaji and Mr. Vincent, who both received much smaller
allocations in the secret Iraqi list than Mr. Wyatt, could
not be reached for comment. Mr. Vincent is an Iraqi-born
businessman who headed Phoenix International.

Mr. Khafaji financed a controversial film about Iraq by
Scott Ritter, the former United Nations arms inspector who
opposed the American-led invasion of Iraq.

Rep. Christopher Shays, the Connecticut Republican who
heads the subcommittee on government reform, which has been
investigating the oil-for-food program, said his panel
would "follow the list wherever it takes us."

"We want a full explanation of the involvement of all
American oil companies and individuals who were involved in
a thoroughly corrupt program," he said.

Representative Henry J. Hyde, Republican of Illinois,
chairman of the International Relations Committee that is
also investigating the seven-year oil-for-food program,
said in a statement that the Iraq Survey Group's report
showed the "full breadth of Saddam Hussein's corruption and
manipulation of the U.N. Oil for Food program."

Scott Shane contributed reporting for this article.

Courtesy of: Larry Parker