The Importance of Oil
If we look at identifying the single most important thing that impacts the world today - we will find that the thing is OIL.
Oil is what makes the whole world run today. It is used for producing electricity which is used for producing everything else and it is used for transportation to get the things produced from one place to another. If there is a shortage of oil, world economies will go into a recession because the supply of things that people and companies want would decrease and things would cost more.
So, there is no doubt about the importance of oil in the world. Global oil reserves are around 1 million MB (million barrels) and annual global consumption is around 28000 MB (or 28 billion barrels). USA consumes a good quarter of this amount. So, quite naturally, it has serious interest in the resource.
Geo-Politics
The second thing to observe about oil is that oil reserves are localized to certain areas in the world - primarily in the middle east and in the caspian region.
To have stability in the world economy, every country wants a steady supply of oil at a reasonable price. But this is not assured. If certain of these countries decide to lower oil production, oil prices will rise and threaten the world economy.
US has taken this whole oil thing seriously and tried to assure itself of a steady supply of oil at a reasonable price. It has done this by cultivating a pliable government in the countries that produce oil.
Now, Iraq has the second largest reserves of oil and it did not have a pliable government. So, it was in USA's interest to get a new (pliable) government in place.
Afghanistan is another important geopolitical target. It is in a controlling position for pipelines that go from the Caspian oil reserves to China and Pakistan.
Global Oil Trade
The third interesting thing about oil is that all international oil trade is done in US dollars. This creates a huge reserve of dollars in the oil producing countries who use the dollars for all subsequent exchanges. But finally, what can one really do with dollars? The answer is - buy American goods.
When Iraq tried to change oil trade by using Euros instead of dollars, the threat to the US was very serious. In fact, trading oil in Euros has been proposed by North Korea, Iran and Iraq and very coincidentally, these three countries have been labeled as the Axis of Evil by the USA.
And just to put the money involved in perspective, the global annual oil consumption at $10 a barrel works out to $280 billion. And at $100 a barrel, it works out to $2.8 trillion. For the USA alone, the bill works out to 70 - 700 billion at the two different values.
Moral Justification
Although policy makers in the USA are aware of the problems related to oil prices, the same is not true for the average American. So, the problem of getting a pliable government inducted or a non-pliable government evicted is not an easy task.
Originally, US had a pliable government in Iran, but this wasnt what the Soviets wanted (they also play the game). They engineered a coup in Iran via Ahyatollah Khomeni and the US was out in the streets.
To counter this move, the USA supported Saddam Husein in his war against Iran. But how to justify this to the American public? Ahyatollah Khomeni was projected as the face of evil with terrorism as the issue. Now, there was moral justification for the US to be involved.
Around the same time, the Soviets invaded Afghanistan - again to secure control in the gulf area - with a friendly Iran under Ahyatollah Khomeni.
And again the US needed to counter this move. They supported the militant (and out of power) afghans called mujahideens. Of course, these things often come home to roost. The mujahideens became the Taliban and Bin Laden was one of them.
Later, after 9/11, the moral justification for war on terror was easy to obtain. Terrorism, weapons of mass destruction etc. were easy fodder to feed to the American public to justify any action.
Side-effects -
Once a militant uprising is initiated in a country, several bands of militants come up, hoping to break into the big league. Each band needs money to buy guns and ammunition to feed its growth.
There is only one business that can get that kind of money on a routine basis - drugs. Once the mujahideen were born, opium and heroin soon followed. The is a huge world-wide market for drugs, but mainly in the US. There are established supply chains and a worldwide distribution network for drugs.
The poppies are produced in Afghanistan, opium and heroin production are worldwide. There are any number of latin american countries that have innumerable drug cartels that process, store and distribute drugs.
The sale of drugs supplies money that is used to purchase guns that are required to fight the war. Today, the "war" has changed to terrorism. But the principles remain the same.
The estimated market for drugs is anywhere between $100 to $500 billion worldwide. In comparison Microsoft's annual revenue is in the region of $50 billion.
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