Earlier this year Iraq has overtook Iran and has become the second biggest oil producing country among the OPEC countries.
Top economist from the International Energy Agency has warned in an interview that any sudden slowdown in the growth of Iraq’s energy production will indeed be bad news for the world.
According to Fatih Birol, such a problem is not the central focus for IEA, but it will remain as a credible possibility in the report prepared by the organization on the energy industry of Iraq and is due next month.
The comment came amidst the dramatic rise of the Iraq in oil production. Earlier this year, Iraq overtook Iran and became the second largest country within OPEC in oil production, and more increase in the oil production is on charts.
Birol, the chief economist of IEA has said in his Paris office, if Iraq stops growing or face any slowdown in the process of growing, then there will be a lot of difficulties within Iraq and it won’t be good news for the global market of oil either.
He has further added that this problem will affect countries like China, some European and some developing countries of Asia. The growth is oil is basically demanded by China and the Asian countries. If the prices get high, that will affect the economy of Europe at large and the economic condition of this continent is already fragile.
Birol has stressed on the fact that, the slowdown is not likely to happen, but has also noted that it is important to look into the problem. It will make the rest of the world aware about the importance of Iraq and about the crucial role Iraq is going to play in the global oil market in the years to come.
He has also added that the central focus of his thesis on the fact that Iraq is going to play a really crucial role in supplying oil in the global market. This demand will ensure that the oil production of Iraq grows steadily, which will eventually be able to bring prosperity to the people of the country and meet the level of demand in the global oil market.
When he was asked if any other country will be able to follow the increase in oil production of Iraq, Birol has answered that he does not think there is any other country which will be able to match Iraq and produce so much amount of oil within such a short period.
Birol has refused to comment on the statistics which will mean that the oil production is getting slower and has dais that all information on this topic will be available in the report by IEA on the topic of Iraq Energy Outlook which is to be published on 9th October.
Currently Iraq produces about 3.2 million bpd of oil and exports about 2.5 million bpd. This accounts for the most amount of the income by the government of the country.
There is a proven reserve of 143.1 billion barrels of oil and 3.2 trillion cubic meters of gas and both these numbers are among some of the largest and biggest in the world.
The export of crude oil makes for the most amount of the government’s income and Iraq is looking forward to increase both the production and the export of crude oil, dramatically in the years to come. This will bring the cash which is required urgently to rebuild this war torn country and economy.
Birol has also pointed out the fact that the internal demand is also going to increase because the electricity provision of the country needs to be improved, along with that, there will be the need of more fuel for the so called wealthier society and this will be a factor which will affect the oil revenue in the future along with political and geopolitical challenges.
Birol has further declined to provide any more details on the challenges the country is to face, but has indeed stressed that the integrity especially the territorial integrity of Iraq is important, which hinted to the dispute between the central government and the autonomous Kurdish authorities over the matter of oil exports.
Source [Al Arabiya]