In a letter to the Financial Times, Ian Rutledge (author of Addicted to Oil) looks at spiraling oil prices and argues that no one should be surprised. He recounts a 2001 report by the Council on Foreign Relations warning of a coming energy crisis brought on by growing consumption rates and dependence on Middle Eastern oil. The Council urged that the U.S. "develop a strategic plan to encourage reopening to foreign investment in the important states of the Middle East," while conceding that political considerations made Saudi Arabia and Kuwait unlikely targets for western interference.

"However," Rutledge writes, "there was an alternative":

In the words of ESA Inc (Boston), the US's leading energy security analysts: "One of the best things for our supply security would be liberate Iraq"; words echoed by William Kristol, the Republican party ideologist, in testimony to the House Subcommittee on the Middle East on May 22 2002 that as far as oil was concerned, "Iraq is more important than Saudi Arabia."

So when, according to the former head of ExxonMobil's Gulf operations, "Iraqi exiles approached us saying, you can have our oil if we can get back in there," the Bush administration decided to use its overwhelming military might to create a pliant - and dependable - oil protectorate in the Middle East and achieve that essential "opening" of the Gulf oilfields.

But in the words of another US oil company executive, "it all turned out a lot more complicated than anyone had expected." Instead of the anticipated post-invasion rapid expansion of Iraqi production (an expectation of an additional 2m b/d entering the world market by now), the continuing violence of the insurgency has prevented Iraqi exports from even recovering to pre-invasion levels.

In short, the US appears to have fought a war for oil in the Middle East, and lost it. The consequences of that defeat are now plain for all to see.

UPDATE 2:15 p.m.: The U.S. may have lost the war for oil, but who won? The CEOs of oil companies, it turns out. According to the Center for American Progress, they were, "as a group, the highest paid executives in 2004, raking in a median compensation package - not including potentially lucrative gains from stock options - of $16.6 million. That was a gain of 109 percent over the previous year."