Greg Palast's book, "Armed Madhouse," is an eye opener since, although I was thoroughly convinced that the Bush Administration had plans for the ultimate disposition of Iraq's oil, I hardly suspected that there were two plans: Plan A and Plan B. Within a month of Bush's inauguration, the State Department and the National Security Council met in Walnut Creek, CA to plan the invasion of Iraq. The 323 page plan they came up with was like a coup: decapitate the Iraqi head of government, namely Sadam, and replace him with someone more suitable leaving everything else the same including the state owned oil ministry. This plan would only shut down Iraq for a few days, and then Iraq would open again for business. There would be no long, drawn-out occupation. Why did they want to get rid of Sadam? Sadam was jerking around the oil markets thereby interfering with OPEC and its self-designated control over world oil pricing. The troops would be in and out in 3 days. This plan was Colin Powell's baby. It's also what the Saudis and Big Oil, including ExxonMobil, ConocoPhillips, British Petroleum, Royal Dutch Shell and ChevronTexaco, wanted.
Shortly after 9/11, the neocons, based in the Defense Department with roots in Project for the New American Century (PNAC) which included Donald Rumsfeld, Richard Perle, Paul Wolfowitz, Elliot Abrams and Dick Cheney, got into the act. They drafted Plan B which called for total war and a complete rewrite of Iraq's laws, regulations and policies affecting everthing especially the oil. This would not be a 3 day wham bam thank you maam but a lengthy occupation. Their 101-page confidential document spells out a complete make-over of Iraq's economy in accordance with the Chicago School's free market philosophy: tax breaks for the rich, putting all state owned assets, including banks, up for grabs to foreign investors, even new copyright laws protecting software and music!
Essentially the War in Iraq involved a shadow war between the Defense Department and the neocons on the one hand and the State Department, Big Oil, the Saudis and OPEC on the other. The neocons wanted to bust the Saudi-controlled OPEC cartel with their ability to control the worldwide price of oil thus making oil prices a function of the free market. The Saudis set quotas for each oil producing member country including Iraq and Iran thus controlling the price of oil worldwide. Since oil prices were set in dollars (oil had to be bought and sold in dollars), the US and Saudi Arabia were essentially in bed together. This was especially true of the Saudi royal family and the Bush family 
which have ties going way back. This makes it curious as to why Rumsfeld and the neocons prevailed at first in the invasion and the post-invasion occupation in which Jerry Bremer was installed as the "Emperor of Iraq." (By the way, Bremer was a friend of mine at Andover which also produced George W Bush.) Bremer, having worked for Kissinger & Associates, represented the neocons and started the process of auctioning off Iraqi assets to the highest bidders and tinkering with the Iraqi Constitution.
After about a year of this, President Cheney had a change of heart. He was split in his allegiance to the neocons and his allegiance to Big Oil. After all, Cheney, Condoleeza Rice and George W had all been oil executives. You might wonder why Big Oil would not want Iraqi oil assets auctioned off to them so that they could bust OPEC's stranglehold on oil pricing and so that they could make big bucks owning and controlling Iraqi oil and pumping and selling it at as great a rate as they could. The answer is that the price of oil is completely controlled by the Law of Supply and Demand. Pumping more oil does not result in greater profits. Pumping less oil and then jacking up the price of oil due to oil shortages results in greater profits. The same ruse was perpetrated by Enron in its quest to "screw little old ladies in California." Therefore, Big Oil is completely happy to have OPEC and the Saudis essentially keep the supply down and prices up. If everyone was free to pump as much oil as they wanted, there would be a resultant glut, prices would fall and profits would diminish. We've seen how limited supplies of oil and recent record high prices have resulted in insanely high oil company profits. So effectively, Big Oil's interests are the same as OPEC's interests. While a cartel among oil companies is illegal, a cartel among nations such as OPEC is not. They act as the world governing body for setting production quotas and hence oil prices and profits.
Dick Cheney, with his allegiance split between the neocons and Big Oil, finally woke up one day and decided Bremer and the neocons had to go. At that point the neocon plan to turn Iraq into a "coaling station" was out and the State Department's Plan A, which kept the state owned oil company (with heavy participation by Big Oil) intact, went into effect. The only problem was that the US was starting to lose control of the entire situation in Iraq so it didn't make much difference whose plan for control of Iraqi oil assets was operative. However, the battle between the State Department and Big Oil and the Saudis on the one hand and the Defense Department and the neocons on the other rages on even as the war in Iraq rages on. It's anyone's guess as to what the final outcome will be. But it seems clear that it's in the interests of the Iraqis to be a docile and compliant member of OPEC, and, if and when they regain control of their economy, to kick Big Oil out of Iraq altogether. Meanwhile, there are other forces at play in the world such as oil producers Venezuela's and Iran's antipathy to the US and China's increased demand for oil which could throw OPEC out of kilter and undermine Saudi control of world oil pricing. If and when oil can be bought and sold in euros or some other major currency, the US will not be able to count on an unlimited credit card limit with which to run interminable budget deficits and fight interminable wars without raising taxes.
