Saudi Arabia controls 25% of the world's proven oil reserves. There's a great article in Fortune Magazine (only available online to subscribers) that makes the point that Saudi Arabia has always wielded enormous power over the oil market. Saudi Arabia need only increase production by a trivial (to them) amount and the price of oil drops through the floor.
It doesn't matter how well America runs Iraq's oil industry. Saudi Arabia, by sheer volume of production and reserves, has far more control. And America is not even Saudi Arabia's biggest customer. They are well insulated from any of our actions and any idea that we can use Iraq as an oil leverage on them is simply wrong.
UPDATE: The reason I'm making this point is because I think that there is a red herring inherent in trying to portray Iraq oil policy as a counter-measure to Saudi funding of fanatical Islam. Saudi Arabia has a simple advantage in terms of raw volume, an economic reality that is totally insulated from political reality. So in order to have any effect, we must pursue political and social initiatives towards the Saudis rather than an economic one - its a simple matter of playing the field on which we have an edge.
That means that we need to reveal our knowledge of Saudi terror financing. The Bush Administration's refusal to do so has drawn mild criticism from principled conservatives and Bush-apologists. But more than criticism is needed - especially since the Saudis are able to play the same issue in victim-mode.
Given this Administration's propensity towards loyalty to itself rather than the good of the country, I'm not holding my breath.
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