Alan Greenspan told the Guardian that the invasion of Iraq was driven by oil. But his explanation is as delusional as it is wicked.

Mr Greenspan, the former Federal Reserve chairman, said in an interview with the Guardian that the invasion of Iraq was aimed at protecting Middle East oil reserves: “I thought the issue of weapons of mass destruction as the excuse was utterly beside the point.”

Mr Greenspan said it was clear to him that Saddam Hussein had wanted to control the Straits of Hormuz and so control Middle East oil shipments through the vital route out of the Gulf. He said that had Saddam been able to do that it would have been “devastating to the west” as the former Iraqi president could have just shut off 5m barrels a day and brought “the industrial world to its knees”.

The Straits of Hormuz, which connect the southern Persian Gulf to the Gulf of Oman, are nowhere near Iraq, as can be seen by the following map (click here to enlarge).

Iraq had, and has, almost no navy to speak of. It’s access to the Persian Gulf is limited to a tiny slice of land in the disputed Shatt al-Arab, and the port city of Umm Qasr. Perhaps Saddam’s invasion of Kuwait, had it been allowed to stand, would have enabled him, over time, to develop naval dominance of the Straits of Hormuz, but in 2002-3 that was about as likely as Ecuador seizing control of the Panama Canal. If Alan Greenspan thought there was any prospect of Saddam Hussein controlling the Straits of Hormuz then he is an idiot.

Bob Woodward interviewed Greenspan as well.

His main support for Hussein’s ouster, though, was economically motivated. “If Saddam Hussein had been head of Iraq and there was no oil under those sands,” Greenspan said, “our response to him would not have been as strong as it was in the first gulf war. And the second gulf war is an extension of the first. My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day” passing through.

Greenspan said disruption of even 3 to 4 million barrels a day could translate into oil prices as high as $120 a barrel — far above even the recent highs of $80 set last week — and the loss of anything more would mean “chaos” to the global economy.

Given that, “I’m saying taking Saddam out was essential,” he said. But he added that he was not implying that the war was an oil grab.

“No, no, no,” he said. Getting rid of Hussein achieved the purpose of “making certain that the existing system [of oil markets] continues to work, frankly, until we find other [energy supplies], which ultimately we will.”

There is a economic case to be made for a strong American presence in the Gulf for the sole purpose of keeping stability and assuring a steady flow of oil and gas. This does not just benefit western oil companies. It benefits everyone by sustaining the global economy. But even if we grant that an argument can be made for a big American footprint in the Gulf, it is absurd to say that it was essential to take out Saddam Hussein because he was on the verge of taking over the Straits of Hormuz. This is like talking to a child with no sense of geography, but Bush’s policies have endangered the oil supply by destabilizing the region, and the only Gulf Power capable of shutting down the straits is Iran. Attack Iran and they might just scuttle ships in the shipping lanes.

We are truly led by idiots.