Iraq Ramping up Oil Exports
IS Baghdad, in coordination with Tehran, plotting an oil revolution to challenge Riyadh’s domination of crude markets?
The game plan appears simple. Rising output from Iraq, the possibility of a deal between Baghdad and the autonomous Kurdish region and the prospect of Iran elbowing out of the cold, could act as a game changer — as far as global energy muscle is concerned.
As per the Economist Intelligence Unit, Iraq is ramping up oil exports in 2014.
It’s draft budget anticipates average exports of 3.4 mbpd, marking a nearly 30 per cent increase from 2013 export levels.
“Almost every second barrel of world oil production growth in the next two decades will come from Iraq, with the potential to provide prosperity for all of Iraq’s 32 million people,” underlines good, old friend Fatih Birol.
If announcements are to be taken seriously, Iraq is
determined to flood oil markets by tripling crude output capacity — to almost 9 mbpd — by 2020. And Hussain al-Shahristani, the Iraqi Deputy Prime Minister for Energy is hinting that upping the output is just part of Iraq’s (overall) plans — leading some to hint of a possible collusion between Baghdad and Tehran.
Al-Shahristani told industry delegates at a Chatham House Middle East energy conference that Baghdad was working with Iran to help it attract investment ahead of the possible lifting of sanctions.
“Iran has been in touch with us,” he told the London Telegraph.
“They want to share our contracts model and experience.”
Was it an oblique message to Opec? Jeff Selding analysing for Voice of America says experts believe the comments (by al-Shahristani) were actually meant to send a message to Opec.
“The game here is for control of the Opec,” Simon Henderson of the Washington Institute for near East Policy was quoted as saying.
“Baghdad and Tehran get on very well together and they are vying against Saudi Arabia, which is the other major power in the Gulf.
The energy side of it is that oil and gas is the main component of their overall strategy.”
“The cooperation between Iran and Iraq is more than just oil because both governments apparently share strategic interests,” underlined Nader Habibi of Brandeis University in a press interview.
“I am sure other countries in the region are closely watching the level of cooperation between Iran and Iraq (on the oil frontier).”
Iran’s leaders though have said little publicly so far about cooperating with Iraq on oil. Iraq can certainly boost oil production.
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