Dang, that's a pretty good article. I see it makes sense and would be to the US' best interest to ally itself with Iraq against the islamist regimes in the region. Let Saddam have the entire Gulf region - in exchange for steady oil and peace with Israel.
Dang! Why didn't I think of it before?
Well, classic balance-of-power politics says that it's dangerous to do business with the strongest nations and to help build them up further. Rather, you undermine the strong nations and build up the weaker ones. Kissinger and Machiavelli would agree on that, and so would the ancient Romans.
As it is, Saddam is hard enough to deal with. If he controlled all the oil in the Middle East he would, to say the least, be insufferable.