Greenspan explained

I suspect there are still quite a few "blood for oil" conspiracists who are in whoops over a quote from Greenspan's recent autobiography:

I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.

I wasn't surprised when I discovered that there is more to his position than that (via Ed Morrissey):

Greenspan clarified his remarks in an interview with the Washington Post, telling the newspaper that although securing global oil supplies was "not the administration's motive," he had presented the White House with a case for why removing Hussein was important for the global economy.
"I was not saying that that's the administration's motive," Greenspan said. "I'm just saying that if somebody asked me, 'Are we fortunate in taking out Saddam?,' I would say it was essential."
He said that in his discussions with President Bush and Vice President Dick Cheney, "I have never heard them basically say, 'We've got to protect the oil supplies of the world,' but that would have been my motive."

Not only this, but Greenspan (like most rational actors on the global stage) believed that Saddam Hussein had WMD - he just thought there were other good reasons to get rid of him as well:

As for Iraq, Greenspan said that at the time of the invasion, he believed, like Bush, that Iraq had weapons of mass destruction "because Saddam was acting so guiltily trying to protect something." While he was "reasonably sure he did not have an atomic weapon," he added, "my view was that if we do nothing, eventually he would gain control of a weapon."
His main support for Hussein's ouster, though, was economically motivated. "If Saddam Hussein had been head of Iraq and there was no oil under those sands," Greenspan said, "our response to him would not have been as strong as it was in the first gulf war. And the second gulf war is an extension of the first. My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day" passing through.
Greenspan said disruption of even 3 to 4 million barrels a day could translate into oil prices as high as $120 a barrel -- far above even the recent highs of $80 set last week -- and the loss of anything more would mean "chaos" to the global economy.
Given that, "I'm saying taking Saddam out was essential," he said. But he added that he was not implying that the war was an oil grab.
"No, no, no," he said. Getting rid of Hussein achieved the purpose of "making certain that the existing system [of oil markets] continues to work, frankly, until we find other [energy supplies], which ultimately we will."

So he was simply saying that if the Middle East didn't have a lot of oil we would be less interested in it (which doesn't seem to be an earth-shattering statement). One could add to that, that the Middle East would probably have less intractable problems if it didn't sit on so much oil. Ed Morrissey spells it out:

In general, Greenspan has it right. People have turned oil into a protest chant, but the global economy depends on a free flow of oil to provide energy. A great portion of that oil comes from the Middle East, which makes its politics a matter of interest to most nations of the world. We can’t ignore people like Saddam Hussein when they threaten oil supplies, and Greenspan understands this better than most.
Unfortunately, the White House can’t even afford to make this common-sense argument. Of course the US has to protect foreign petroleum supplies; hardly any other nation has that capability. Only Britain has a large enough navy to deploy significant surface forces in that area, which is why we have partnered with them to ensure that tinpot dictators like Saddam and lunatics like Mahmoud Ahmadinejad cannot use oil to hold the rest of the world hostage to their demands. The other option would be to open up our own resources for drilling to offset our own vulnerability to those kind of extortions, and our political class refuses to do that.
Until we develop a domestic energy production that makes the West impervious to financial disruption from oil stoppages, we have to protect our interests in the Middle East. It doesn’t take a Greenspan to figure that out, but apparently it takes a Greenspan to explain it to the media.

Which is why I'm in favour of nuclear power.