To a portentous question about oil markets, the answer so far is “not soon, apparently.”
The question: When does Iraq start making real progress toward achieving its full potential as a producer of oil?
Iraqi production of crude oil fell to slightly above 3 million b/d in June, its lowest level in 3 months.
Although the trend over the past few years is upward, Iraq once planned to produce crude at twice the June level and has the geology to do so.
According to the International Energy Agency, the June slump resulted partly from high winds, which cut tanker loadings at the Basra terminal in the south.
But some of it reflected a new surge in sabotage of the important export pipeline in the north. And production from the Kurdish region suffered from enduring disputes between Baghdad and the Kurdistan Regional Authority.
Iraq remains too insecure to allow the necessary debottlenecking of its export infrastructure and full development of its petroleum resources.
The United Nations estimates political violence killed more than 1,000 Iraqis in May.
A new analysis by Chatham House of London points out internal disputes between Shia, Sunni, and Kurdish factions keep the government of Nouri al-Maliki from fashioning an effective foreign policy. For a country abutting war-ravaged Syria, that lapse is serious.
Iraqis are divided over Maliki’s implicit support of Syrian President Bashar al-Assad and friendly gestures toward Iran.
The Chatham House analysts say internal disputes over Iraq’s regional relationships probably will worsen but suggest a “third way” centered on nonalignment. That the Iraqi government can overcome internal, sectarian dissent in order to pursue national interests is evident, they say, in a recent warming of relations with Kuwait.
So Iraq might remain a fragmented country ever on the verge of civil war. Or maybe it will become a nation able to capitalize on pluralism and pursue external goals beneficial to all Iraqis.
There’s no question which version of the country produces 6 million b/d of oil.
(Online July 11, 2013; author’s e-mail: [email protected])