share of U.S. GDP as payment tothose who supply us with oil. Iraq couldpresent the United States with supply problems. With a hostile government inBaghdad, the likelihood that the United States would be subject to some sort ofboycott as in the early 1970s is greater than otherwise. Likewise, a governmentin Baghdad that does not cooperate with Washington could be a catalyst to areinvigoration of the Organization of Petroleum Exporting Countries (OPEC) andthe result could be higher oil prices. Such threats,however, while real, are not as great as they might first appear. Boycotts arehard to maintain. The sellers of oil need to sell as much as the buyers need tobuy; oil exporters depend on the U.S. market, just as U.S. consumers depend onthose exporters. (An illustration of this mutual dependence is provided by thecontinuing oil trade between Iraq and the United States in recent years. During2001, while the two countries were in a virtual state of war, the United Statesbought 284 million barrels of oil from Iraq, about 7% of U.S. imports andalmost a third of Iraqs exports.) Also, U.S. oil imports come from diversesources, with less than half from OPEC countries and less than one-quarter fromPersian Gulf nations. Mostimportant, ever since the initial surge of OPEC in the 1970s, the organizationhas followed a policy of price restraint. While price restraint may in part bea strategy of political cooperation, resulting from the close U.S.-Saudirelationship in particular, it is also a policy adopted because high prices arecounter-productive for OPEC itself; high prices lead consumers to switchsources of supply and conserve energy, undercutting the longer term profits forthe oil suppliers. Furthermore, a sudden rise in prices can lead to generaleconomic disruption, which is no more desirable for the oil exporters than forthe oil importers. To be sure, the United States would prefer to havecooperative governments in oil producing countries, but the specter of anotherboycott as in the 1970s or somewhat higher prices for oil hardly provides arationale, let alone a justification, for war. The ProfitsProblemThere is,however, also the importance of oil in the profits of large U.S. firms: the oilcompanies themselves (with ExxonMobil at the head of the list) but also thenumerous drilling, shipping, refining, and marketing firms that make up therest of the oil industry. Perhaps the most famous of this latter group, becauseformer CEO Dick Cheney is now vice president, is the Halliburton Company, whichsupplies a wide range of equipment and engineering services to the industry.Even while many governmentsSaudi Arabia, Kuwait, and Venezuela, forexamplehave taken ownership of their countries oil reserves, these companieshave been able to maintain their profits because of their decisive roles ateach stage in the long sequence from exploration through drilling to refiningand marketing. Ultimately, however, as with any resource-based industry, themonopolistic positionand thus the large profitsof the firms that dominate theoil industry depends on their access to the supply of the resource. Theiraccess, in turn, depends on the relations they are able to establish with thegovernments of oil-producing countries.From theperspective of the major U.S. oil companies, a hostile Iraqi governmentpresents a clear set of problems. To begin with, there