The oil export of Iraq is expected to be raised greatly in recent times and experts are anticipating that it will be double in 2020, comparing today’s oil export of Iraq. Soon, Iraq will secure the place of 2nd position after Saudi Arabia, in oil exporting business.
IEA, or International Energy Agency has claimed that Iraq is going to be one of the major players of the in the sector of oil export. It will reach to a mammoth production level of oil, i.e. 6 million gallons per day by the year of 2020. Right now it is around 3 million barrels per days!
The overall prediction and statistics are based over the recent business exchange and contract signing between Iraq and several companies of the world. In this context Paris based IEA has pointed out that the risk in crude generation is rising and that will give a hike to the global price of the crude too.
Fatih Birol, the IEA's chief economist and the main author of the Iraq Energy Outlook stated "This is much lower than the contracted projects and much lower than the Iraqi government's official targets."
The previous projection of Iraqi oil production reaching 20 million barrels per day by 2017 is looking a bit unrealistic, due to the bottlenecks of infrastructure and other technical issues.
IEA has been engaged for years with 28 different countries, sharing their advices, is now getting into a contract with Iraqi govt. Issam Chalabi, former Iraqi oil minister said, "I think it is attainable and Iraq should be able to solve the problems related to water injection, storage and transportation pipelines," He also added that the main challenge for Iraq is infrastructure; finding export outlets can be a bit difficult.
Export on Higher End
For last four years, oil production of Iraq faced difficulties due to war situation and internal unrest. Though, amazingly, the country holds world’s fourth-largest oil reserves.
Output mainly started to increase from 2010, when Baghdad clinched some contracts with companies like, BP Plc, Exxon Mobil, Eni and Royal Dutch Shell.
Generally, Iran is the second largest producer in the Organization of the Petroleum Exporting Countries. But, Iran’s exports have been curbed due to sanctions over Tehran’s nuclear programs. Iraq’s export in the number of 2.6 million barrels per day has been so far registered as largest of Iraq in comparison to the past few decades.
One of the senior Iraqi officials remarked, "I'm quite confident that if all goes well, exports will increase to at least 2.8 million,"
The southern oilfields of Iraq are now ready to contribute 2.4 million bpd of Basra crude and northern Kirkuk is also expected to contribute hugely. The oil payment dispute between Kurdish govt. and Iraqi govt. seems to come to an end and that is why Kirkuk’s production is rising.
The hike in Iraqi oil production has helped to keep a lid on oil prices. The hike was due to gap in supply from Iran. But IEA is anticipating a stable market position for the reason of Iraq’s outburst as a major oil exporter recently. Oil price would be higher and would reach almost 140 dollar a barrel within 2035, as mention by IEA. Birol stated, "What happens is that the global oil markets will be set on a course for troubled waters. This would mean tightness in the markets and higher prices, which we think is not good news for the economy."