The US continued to play both sides in the Iran/Iraq War, backing one country until it had a military advantage, before switching sides to back the other. The US resisted any moves to negotiate a peace treaty.
Both countries saw their infrastructure leveled, their economies crippled and their people decimated. In Iraq 750,000 people were killed. A 1979 memo to President Carter from NSA Brzezinski, explains the US policy, “the Iran-Iraq conflict is a unique opportunity to consolidate our security position”.
The Export Import Bank provided $200 million in taxpayer insured loans to Iraq, most of which were funneled through Banco Nacionale de Lavoro. The Commodity Credit Corporation provided a similar amount of taxpayer-insured loans so Iraq could buy grain from Cargill and Continental Grain. As much as 20% of the US rice crop was sold to Iraq. By the first quarter of 1990 Iraq was the United States’ third largest trading partner.  Iraq owed $241 billion to global creditors: $120 billion to Kuwait and Saudi Arabia, $9 billion to Russia and $3 billion to Japan. In 1989 Japan cut Iraq off.
Carter NSA Gary Sick, said later that, “the US has resisted all moves in the United Nations toward a negotiated settlement of the tanker war”.  The US Navy’s re-flagging operation established a permanent US presence in the Persian Gulf. Reagan Defense Secretary Casper Weinberger, who was later Knighted by Queen Elizabeth II for his genocidal efforts, characterized the re-flagging as a “trade-off for basing rights”, in GCC countries. The monarchs had been slow to cooperate with US security plans in the region. The Iran/Iraq War had the effect of scaring the daylights out of the emirates and getting them on board with US plans to modernize bases in Saudi Arabia and to build new ones in the other GCC emirates.
Saudi/US relations became very cozy during this time, especially on the military front. The Saudis became the biggest annual recipient of US military aid. In 1983 the Saudis received $17 billion in US military hardware. In 1984 that jumped to $22.7 billion. Richard Secord was in the thick of it- brokering the sale of five AWACs to the Saudis the night Reagan was sworn into office. Hidden in the $8.5 billion package was a provision that beefed up the Kingdom’s C3 system at bases, some of which contain underground nuclear command centers that only US personnel can control.
By 1993 the Saudis had spent $156 billion on the joint Saudi/US military buildup within the Kingdom. The US now effectively occupied Saudi Arabia, guarding the 261 billion barrels of Four Horsemen oil. Many members of Congress were not even aware of what was going on. As Rep. Howard Metzenbaum (D-OH) said, “The US/Saudi relationship is different because only a tiny White House club is in the know”. 
Iran and Iraq are the only two OPEC nations with large enough oil reserves to challenge Saudi/GCC control over oil prices. Iraq is second only to the Saudis with 112 billion barrels of oil reserves and much of the country remains unexplored. Iran has close to 100 billion barrels of crude. Both are firmly in the camp of the OPEC price hawks. By disrupting oil flows from these two nations, Big Oil eliminated competition and kept the price hawks busy rebuilding their shattered economies instead of rallying for OPEC unity.
Both Iran and Iraq’s primary oil exporting facilities- Khorramshahr and Fao respectively- were demolished during the war. Iran’s entire Kharg Island facilities were leveled. Iraq was now deeply in debt to the Saudis and Kuwaitis. Many of both nations’ oil tankers were damaged in the tanker war. The cities of both countries required billions of dollars and a decade to be rebuilt as a result of the war of the cities. It was a war of attrition with each side suffering untold loss of life and $25-35 billion worth of damage.
In CIA-think, a decisive victory by either Iran or Iraq would have left the winner in a position to take on the Saudis militarily. A staggering defeat by either might breed internal revolutionary forces who would challenge the Ayatollahs or Saddam, who had been quite useful to the CIA in wiping out nationalistic elements and in providing a pretext for the US military buildup in the Persian Gulf. But a long war of attrition would leave both nations crippled and focused on rebuilding. Neither would have the luxury of mounting any sort of challenge to Four Horsemen control over Persian Gulf oil.
Big Oil used the war as another excuse to hike gas prices in the US. The GCC sheiks filled the oil shortfall which the war created, pumping out more than enough crude to move wholesale prices lower on world markets. The Four Horsemen pocketed the difference, while stockpiling crude oil. A memo uncovered by Edwin Rothschild, energy adviser for the group Public Citizen, sums up US policy towards Saudi/GCC overproduction and the misery it brings the poor countries of OPEC. The memo, sent by Undersecretary of State Richard Murphy to the Saudi government, said simply, “Let the market rule”.
Lower wholesale prices made it more difficult for Iraq and Iran to rebuild. In 1988 Iran earned 90% of its hard currency through oil exports. Iraq gained 99% of its foreign exchange from oil. Both the Iraqi dinar and the Iranian rial plummeted. In 1994 the rial lost 100% of its value. Before the war Iraq had $40 billion in hard currency reserves. Afterwards, it had zero and huge debts to pay.
The Israelis worked hand-in-hand with the US to destroy both nations. While supplying Mustafa Barzani’s Kurds in their attacks on Iraq, the Israelis duplicitously provided missile targeting to Saddam Hussein for his attacks on Iranian cities via US spy satellites. In 1988 Mossad launched Operation Brush Fire, a psychological warfare campaign designed to draw the US military further into the Middle East conflagration. Their ultimate goal was to have the US destroy Iraq’s powerful military, while leaving their “perfect villain” Saddam in power.
The campaign was launched when Israeli commandos bombed an Iraqi weapons plant at Al-Iskandariah in at attempt to make “Iraqi weapons of mass destruction” a global household phrase. Mossad set up a London Observer freelance journalist named Farzad Bazroft to take the story international. Bazroft had been investigating the death of Shah-loyalist tuned Mossad arms dealer Cyrus Hashemi and had gotten too close to the truth, which was that Mossad had eliminated Hashemi. Knowing Bazroft would be seen as a foreign spy by Baghdad after the Mossad terrorism at the weapons plant, they sent him into Iraq. Saddam took the bait and Bazroft was hung as a spy creating an even bigger international incident. To speed things along, Mossad leaked secret documents on Iraqi weapons programs to ABC News.
US and Israeli arms merchants made a killing during the war. The US refused to supply spare parts to either side, so when a weapons system broke Iran or Iraq would be expected to buy a whole new system. This policy bolstered the bottom lines of US defense contractors and assured that battlefield weapons malfunctions could not be fixed on the spot, thus negating the momentum which the side on the offensive had attained. This helped keep the war in a constant state of stalemate.
Israeli Defense Minister Ariel Sharon used the conflict as an opportunity to bomb Baghdad’s nuclear facilities in 1981. In 1982 Sharon declared that Israel was siding with Iran, but his exact words were more revealing. Sharon declared at a conference in Paris that, “Israel has a vital interest in the continuing war in the Persian Gulf and in Iran’s victory.” In 1986 retired Mossad Chief General Aharon Yariv declared the US and Israeli position more succinctly when he stated bluntly, “It would be good if the Iran/Iraq War ended in a tie, but it would be better if it continued”.
 Behold a Pale Horse. William Cooper. Light Technology Press. Sedona, AZ. 1991. p.81
 Ibid. p.83
 “Mr. Fixit”. Joel Bleifuss. In These Times. 2-22-93. p.12
 “October Surprise: Bush’s Watergate”. Philippine Currents. 11/12-91. p.15
 Dope Inc.: The Book that Drove Kissinger Crazy. The Editors of Executive Intelligence Review. Washington, DC. 1992. p.504
 Hot Money and the Politics of Debt. R.T. Naylor. The Linden Press/Simon & Schuster. New York. 1987. p.94
 The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. Jonathan Beaty and S.C. Gwynne. Random House. New York. 1993. p.231
 Bleifuss. p.12
 Beaty and Gwynne. p.268
 The Spotlight. June 1997
 BBC World News. January 2002
 The Great Heroin Coup: Drugs, Intelligence and International Fascism. Henrik Kruger. South End Press. Boston. 1980. p.217
 “War Criminals, Real and Imagined”. Gregory Elich. Covert Action Quarterly. Winter 2001. p.21
 “Heart of Darkness Department”. Alexander Cockburn. The Nation. 2-6-89. p.151
 “Israel and Hamas: Dancing the Zionist-Islamist Waltz”. Rezeq Faraj. Covert Action Quarterly. Winter 2001. p.24
 “Islamic Terrorists: Creature of the US Taxpayer?” John K. Cooley. International Herald Tribune. 3-13-96
 “Ariel Sharon: Profile of an Unrepentant War Criminal” Jeffrey Steinberg. Executive Intelligence Review. 5-17-02
 The Other Side of Deception. Victor Ostravsky. HarperCollins Publishing. New York. 1994
 Faraj. p.25
 The Judas Factor: The Plot to Kill Malcolm X. Karl Evanzz. Thunder’s Mouth Press. New York. 1992
 “Political Islam”. Samir Amin. Covert Action Quarterly. Winter 2001. p.3
 The Reign of the Ayatollahs: Iran and the Islamic Revolution. Shaul Bakhash. Basic Books, Inc. New York. 1984. p.193
 Iraq and Kuwait: A History Suppressed. Ralph Schoenman. Veritas Press. Santa Barbara, CA. 1990. p.21
 Beyond the Storm: A Gulf Crisis Reader. Phyllis Bennis and Michel Monshabeck. Olive Branch Press. Brooklyn, NY. 1991. p.31
 Iraq Since 1958: From Revolution to Dictatorship. Marion Farouk-Sluglett and Peter Sluglett. I.B. Tauris & Company, Inc. 1990. p.260
 “The Gulf Between Pretense and Reality”. Larry Everest. In These Times. 7-20-88. p.9
 “The Arming of Saudi Arabia”. Frontline. PBS. 2-16-93
 The Gulf: Scramble for Security. Raj Choudry. Sreedhar Press. New Dehli. 1983. p.108
 The Mafia, CIA and George Bush: The Untold Story of America’s Greatest Financial Debacle. Pete Brewton. SPI Books. New York. 1991
 March to War. James Ridgeway. Four Walls Four Windows. New York. 1991. p.13
 Everest. p.9
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