The Saudis and Kuwaitis agreed to fund Saddam Hussein’s attack into Iran’s oil-rich Khuzistan Province at Brzezinski’s request. The idea was to sever Khuzistan from the rest of Iran, then install a pliable government with which the Four Horsemen could do business.
Khuzistan contains the strategic Shatt al-Arab Waterway, which flows into the Persian Gulf and forms the Iran/Iraq border. Kharg Island, in the waterway’s delta, is home to the bulk of Iran’s oil processing facilities, including the Abadan and Ahwaz refineries.
Khuzistan is also home to 90% of Iranian oil reserves and most of Iran’s significant natural gas reserves, which are surpassed only by those in Russia and Turkmenistan. Khuzistan is the stronghold of the Tudeh and People’s Mujahadeen Parties, thorns in the side of the Ayatollah, the Shah and Big Oil alike. The population of the province is largely Arab and Kurdish, while Persians predominate elsewhere in Iran. The CIA hoped to exploit these ethnic differences as it so often does.
Brzezinski told Saddam that his Revolutionary Guard would be seen entering Khuzistan as, “great Arab liberators”. Hussein was also assured control of the Shatt al-Arab, which former Iraqi President al-Bakr had ceded to Iran under the 1973 Algiers Agreement in return for a cessation of Shah and CIA backing of Iraqi Patriotic Union of Kurdistan rebels. In 1980 Hussein’s troops invaded Iran. Iraq gained control of the prized Shatt al-Arab only briefly. Its troops were seen by the Khuzistanis for what they really were- tools of US imperialism. The real US goals were quite different from what Brzezinski had told Saddam Hussein.
While the CIA was funneling information to the Ayatollah and his goons on Iranian nationalists, Saddam Hussein’s troops now pounded the leftists as a rear guard. Iranian dissidents, who had backed Mohammed Mossadegh’s calls to nationalize Iran’s oil in the 1950’s, and who later launched the oilfield strikes against the Iranian Consortium that brought the Shah to his knees, were now caught in a crossfire of the CIA’s making.
Iraqi forces also targeted Iran’s oil infrastructure. MIG-27 fighters strafed the refineries at Abadan and Ahwaz on Kharg Island, while Revolutionary Guard troops laid waste to facilities at Iran’s largest port of Khorramshahr on the Persian Gulf.  By disrupting Iranian oil exports, the CIA hoped to starve the mullahs of foreign exchange, a situation which would lead to a devaluation of the Iranian rial and subsequent hyperinflation. The CIA could then exploit the economic decay to turn the country against the Khomeini government. Iran, which had become a modern nation state, saw decades of progress destroyed during the war with Iraq. The nation was literally de-modernized.
The CIA’s goals toward Iraq were no different. Throughout the war GCC members Kuwait, Saudi Arabia and the UAE provided Saddam with interest-free loans. The Saudis and Kuwaitis sent Iraq over $120 billion.  Kuwait, the UAE and Jordan all made their ports available to the Iraqi Navy. Saudi Arabia and Oman provided landing rights for Iraqi MIG-27 fighters. The US was joined by Israel, Russia, Italy, France, Egypt and Brazil in sending Iraq weapons through the Jordanian Port of Aqaba. US corporations such as Honeywell, Rockwell, Unisys and Hewlett Packard sent over $40 million in dual-use items to both Iran and Iraq during the war.
The CIA took a shine to Saddam Hussein for the same reason they worked with Ayatollah Khomeini. In 1974, as Revolution Command Council Internal Security Chief, Hussein attacked leftist political parties in Iraq. Jalal Talabani’s Patriotic Union of Kurdistan worked for CIA and the Shah of Iran in attacking the al-Bakr government in Baghdad. Al-Bakr was an influential OPEC price hawk leader who railed against Big Oil dominance over Arab oil.
Saddam was doing everything he could to suppress these voices. From 1974-75 250,000 Iraqi Kurds fled to Iran. In April 1979, while his Ba’ath Party thugs were brutalizing Shi’ite Muslims, leftists and renegade Kurd factions, Saddam signed a security agreement with Saudi Arabia. By 1980 Saddam, a Sunni Muslim, banned two major Shi’ite political parties in Iraq- al-Dawah al Islamiyya and al-Mujahidin. Iranian-born Shi’ites were deported, along with 3,000 leftists. Twenty-two Ba’ath leaders accused of collaborating with Syria were executed. 
Hussein’s purges looked so similar to the ones being conducted by the Ayatollah that one had to wonder if Saddam had not also received a Company hit list. Thrilled with Saddam’s fascist killing spree, Western multinationals flocked to Iraq where a massive agricultural privatization was under way. Cooperative land that had grown staple foods for Iraqi peasants for decades was now for sale to the highest bidder. A handful of wealthy Iraqis got most of the land and their diras (estates) began cultivating crops for export.
Iraq was forced to import basic foods like wheat and rice to feed its suddenly landless people. Western grain giants Cargill and Continental Grain (now merged), Louis Dreyfus, Andre and Bunge & Born moved in to fill the void. In 1982 Iraq imported 820,000 tons of US grain.  Other segments of Iraq’s economy were ceded to multinationals as well. Had Saddam cut a deal with the West, whereby US corporations got greater access to Iraq’s economic spoils in return for US support in his war with Iran?
Until 1984 the US publicly favored Iran in the war with Iraq. Then Iran reclaimed the Shatt al-Arab Waterway and Khuzistan Province. The tide of the war was turning in Iran’s favor. In 1984 the US began re-flagging Kuwaiti oil tankers in the Persian Gulf which, it claimed, came under attack by Iranian gunboats. Actually it had been the Iraqis who started the tanker war that year. By 1987 the Iraqi Navy had damaged 219 oil tankers. 
The shift was on. In 1984 Reagan removed Iraq from the State Department list of nations that support terrorism. That year marked the beginning of the War of Cities, when numerous major cities in both countries were reduced to rubble, including the capitals Tehran and Baghdad. Both countries targeted the economic infrastructure of the other. A 1985 CIA memo to Director Casey stated, “Our tilt to Iraq was timely when Iraq was against the ropes and the Islamic Revolution was on a roll”.
In 1987 85,000 Iranian troops overran Fao, Iraq’s main oil terminal for its vast Rumaila oilfields near the Kuwaiti border. Under the pretext of a US Navy re-flagging operation, forty-two US Naval vessels arrived in the Persian Gulf. US gunboats shelled Iranian oil installations at the mouth of the Shatt al-Arab and shot down an Iranian passenger jumbo jet, killing everyone on board. When Iraq used mustard gas against its own Kurdish people in 1987, the US looked the other way and began to arm Saddam Hussein.
The House of Saud, which had been bankrolling the Iraqi war effort all along, now began to work through BCCI to arm the Iraqis. In addition to the $1 billion/month they were sending Saddam, the Saudis now provided intelligence, logistics and weapons, including NK-84 helicopters. The Saudis entered a joint venture to help strengthen Baghdad’s nuclear capabilities, which the Israelis had wiped out in a 1981 bombing raid commanded by Ariel Sharon. 
Saudi Arabia and Iraq set up Gulf International Banks to supplement the BCCI channel. A 1989 Defense Department study showed US military aid to the Saudis landing in Iraqi accounts in Switzerland. US AWAC surveillance planes flew from Saudi bases and gathered intelligence for Iraq. The US/Saudi collaboration was so blatant that many believed the Americans were directing Saudi security agencies. 
Dean Henderson is the author of five books:Big Oil & Their Bankers in the Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network, The Grateful Unrich: Revolution in 50 Countries, Das Kartell der Federal Reserve, Stickin’ it to the Matrix & The Federal Reserve Cartel. You can subscribe free to his weekly Left Hook column @www.hendersonlefthook.wordpress.com