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Iraq’s Oil Could Reshape Global Energy Landscape

Author: Blake Clayton, Adjunct Fellow for Energy
October 23, 2012


NEW YORK --- In a major new study published last week, the International Energy Agency reconfirmed what Washington has long suspected: Iraq has the potential to reshape the global energy landscape in the years ahead, thanks to its huge untapped oil reserves. But whether Baghdad can capitalize on this opportunity is far from clear. The stakes are high—both for the global economy and the country's future.

Despite decades of turmoil and bloodshed, Iraq is already one of the world's major oil suppliers. The roughly 3 million barrels a day it pumps make it the world's third-largest exporter. Consider that Iran, hobbled by Western sanctions, is only producing half as much oil today as Iraq, whose wells are putting out more than twice what they did in 2003, the year of the Iraq War.

Yet by the 2030s, according to the IEA, Iraq may double its current output, leapfrogging energy-powerhouse Russia as the second-largest oil exporter in the world. This is hardly a far-fetched forecast. The country's proven oil reserves are the fifth largest in the world, its proven gas reserves the thirteenth largest. Its actual rank is likely far higher.

n comparison to other major oil producing countries, Iraq is still uncharted territory. Much of its geology remains little known and may well hold significant additional amounts of oil. A good part of what has been explored, at least outside of the Kurdistan area, happened prior to 1962. Today's vastly better technology and higher oil prices almost certainly mean that sizeable new reserves will soon be discovered.

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