Late June/early July normally brings twin events from Iraq for the global oil industry: an announcement that it intends to increase its crude oil production to either 6 or 7 million barrels per day (bpd) within three years, and a statement that its prime minister will visit Washington to discuss deepening strategic ties or something similar aimed at securing money from the U.S. This year is no different, with the announced three-year target being 7 million bpd, and the visit of new prime minister, Ali al-Zaidi happening in the middle of this month. Previously, what usually happened was that Iraq promised various things that it thought Washington wanted to hear (mainly that it would stop importing Iranian gas and electricity, but needed one more waiver from the U.S. just to wind the process down), secured billions in funding from the U.S., and then returned to Baghdad to continue doing exactly what it was doing before, except with more money. But things may be different this time.
U.S. President Donald Trump may be many things, but a fool he is not, and having been lied to repeatedly by the Iraqis many times in his first term in office — most importantly for him over Iran — he has taken a tough line on Baghdad’s double-dealings. On 8 March last year, he blocked the renewal of Iraq’s waiver to keep importing Iranian electricity, and he encouraged the introduction a month later of the ‘Free Iraq from Iran Act’, designed to dismantle Tehran’s political, economic, and military grip over Baghdad. The bill proposes restrictions on Iraq’s import of liquefied natural gas from Iran and mandates a coordinated strategy by the U.S. State and Treasury Departments to systematically dismantle Iran-backed groups in Iraq, as analysed in full in 我最新出版的关于新的全球石油市场秩序的书. At the same time, the U.S. Treasury blocked large-scale U.S. dollar shipments to Iraq, preventing over two dozen Iraqi banks from siphoning hard currency back to the Iranian regime and its proxy militias. The department also directly sanctioned high-ranking Iraqi officials — including Iraq’s deputy oil minister — for abusing state positions to facilitate illicit oil-smuggling networks that blend Iranian and Iraqi crude to generate billions of dollars for Tehran. Related: Washington’s Plan to Neutralize Iran’s Hormuz Leverage
In another parallel move, April last year also saw the introduction of the ‘No Iranian Energy Act’ to U.S. lawmakers. As highlighted by the Chairman of the Republican Study Committee, Congressman August Pfluger, this legislation is part of President Donald Trump’s maximum pressure campaign against Iran’s leaders. “[These] are the world’s most dangerous state sponsors of terrorism, [and] the Iranian regime is not just a threat, its leaders are a genocidal death cult,” he said. The proposed Act will sanction the importation of Iranian natural gas to Iraq, which has for many years formed the foundation of the country’s domestic power sector. An adjunct piece of legislation – the ‘Iran Waiver Rescissions Act’ — would permanently freeze Iranian-sanctioned assets everywhere, including Iraq, and prohibit any standing or future U.S. president from using any waiver authority to lift the sanctions. These collective measures, rigorously enforced, and accompanied by broad-based — but conditional — earlier investment pledges from Washington, meant that then-Prime Minister Mohammed al-Sudani’s earlier tightrope walking act between the U.S. and China had veered more firmly in Washington’s direction rather than Beijing’s. Consequently, the talks between new prime minister, al-Zaidi, and Washington, may start on a more transparent and straightforward basis than those of recent years.
In basic terms, the aim of the U.S. and its allies in Iraq is to work with both the south and the semi-autonomous north of the country to optimise its oil production under the guiding hand and investment of Western firms, with no Russian or Chinese firms ultimately left operating there. Conversely, the essential aim of China and Russia in Iraq — as related by a very senior member of the Russian administration to a senior source who works closely with Iran’s Petroleum Ministry, and then exclusively relayed to OilPrice.com can be summarised as follows: “By keeping the West out of energy deals in Iraq, the end of Western hegemony in the Middle East will become the decisive chapter in the West’s final demise.” One of the key reasons why it is important to both sides in the global superpower struggle is its very conservatively estimated 145 billion barrels of proved crude oil reserves (nearly 18% of the Middle East’s total, and the fifth biggest on the planet), according to the Energy Information Administration. Unofficially, it is extremely likely that it holds around 215 billion barrels, as fully detailed in 我最新出版的关于新的全球石油市场秩序的书. Another is that its geographical location puts it square in the centre of routes from the East to the West, with borders running into Syria (and the Mediterranean Sea) to the west and Turkey to the north. Iraq has also historically acted as a non-sanctioned front for whatever Iran wanted to export into world markets, especially oil that can simply be rebranded as Iraqi oil and sent on.
Where all points meet is in the desire to see Iraq’s oil production reach its full potential, and there is a clear set of guidelines for where this might be. Back in 2012, a confidential report — the ‘Integrated National Energy Strategy’ — commissioned by then-Iraq Prime Minister Nouri al-Maliki, revealed precisely how Iraq could increase its oil output from just over 3 million bpd at that point to a plateau of 13 million bpd in the ‘High Production’ scenario by 2017. The ‘Medium Production’ scenario plotted a course to a 9 million bpd plateau by 2020, while the ‘Low Production’ scenario planned for 6 million bpd by 2025. All these make the current target of 7 million bpd within three years look eminently achievable. A key element in the plan was to bring in adequate investment from companies with the leading technology, experience, and management able to accomplish continued and sustainable rises in output. Part of these efforts would be focused on field development and then further exploration, and another would be on the primary supporting infrastructure needed to sustain such production rise — the Common Seawater Supply Project (CSSP), as also fully analysed in as fully detailed in my latest book. This involves taking seawater from the Persian Gulf and transporting it to oil production facilities to boost pressure at key oil reservoirs and is now a core project being implemented by French energy giant TotalEnergies as one part of its US$27 billion four-pronged programme in Iraq.
On the field development side, it is Western firms once more who have been securing key roles, with last week seeing Iraq’s Basra Oil Company sign a non-disclosure agreement with U.S. energy supermajor Chevron to regulate data exchange for evaluating the supergiant West Qurna 2 oil field, paving the way for future partnership talks following the opening of exclusive negotiations between the two sides over the field in February. The field is one of the world’s largest, with estimated recoverable oil reserves of around 13 billion barrels, accounting for nearly 10% of Iraq’s total recent historical production of around 4 million bpd and about 0.5% of the world’s oil supply. It is apposite to note that Chevron is set to benefit from the U.S.’s sanctions on Russia following its invasion of Ukraine in 2022, which made West Qurna 2 an untenable prospect to continue for Russian oil giant Lukoil. A senior source close to Iraq’s Oil Ministry exclusively confirmed to OilPrice.com that the Iraqi government expects the U.S. firm to be able to double West Qurna 2’s output within a relatively short time. This looks highly likely for a company of Chevron’s capabilities, given that Lukoil had secretly long been able to produce a lot more oil from the field than it revealed to Iraq’s Oil Ministry, as also detailed in my latest book.
This is the latest of many similar deals featuring Western firms and taken together they mark a subtle but unmistakable shift in Baghdad’s long?standing strategy of trying to balance Washington and its allies against Beijing and Moscow for maximum leverage. Washington’s tougher line in Iraq, and its pivotal role alongside its allies in changing the political landscape in Syria and Venezuela in the space of just a few months, has pushed Moscow back from the Middle East, and caused Beijing to adopt a more cautious geopolitical posture. That, and Iraq’s increasingly urgent need for help in resuscitating its oil sector in the aftermath of the U.S./Israel war on Iran, may well mean that Baghdad’s luxury of strategic ambiguity has evaporated. If that is the case, then the new prime minister’s visit to Washington this month may mark the moment when Baghdad finally accepts that, after years of double?dealing, it has little choice left but to tilt decisively toward the West.
作者：Simon Watkins，来源：Oilprice.com
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