Oil in Iraq — The Black Gold Rush?

Some of the biggest critics of the U.S. war against Saddam Hussein's Iraq have argued that the invasion has more to do with oil than any other factor. But how much oil does Iraq really have? And is it fair say that its oil reserves will help the country back on its feet once the war is over? Our Globalist Factsheet examines Iraq's oil resources.

What is the history of foreign interest in Iraqi oil?

Foreign investment in Iraqi oil began in earnest in 1925 — led by companies including Royal Dutch/Shell, Anglo-Persian (now BP), ExxonMobil, Gulf and Standard.

(Deutsche Bank)

How did these foreign companies tap into Iraq?

Under a 1920 treaty between France and Britain, the British were essentially given control over Iraq’s oil reserves — until Iraq nationalized foreign oil holdings in the early 1970s.

(New York Times)

What was the effect of nationalization?

Since 1970, Iraq has produced more than 3 million barrels of oil a day only once.

(University of Chicago)

Roughly how much oil does Iraq have?

Iraq holds proven oil reserves of 112 billion barrels — the world’s second-largest behind Saudi Arabia. In addition, the country has roughly 220 billion barrels of probable and possible resources.

(U.S. Department of Energy)

How valuable are oil exports to the Iraqi economy?

In 2002, Iraq's revenues from oil exports — legal and otherwise — were about $12 billion to $14 billion.

(Cambridge Energy Resource Associates)

How do the Iraqi people benefit from oil revenues?

Before the 2003 war, oil revenues provided about $1,200 per person per year in Iraq — equivalent to about 50 to 75% of recent estimates of Iraq's per capita income.

(University of Chicago)

And how much of those revenues are from U.S. consumption?

As of March 2003, the United States consumed 56% of Iraq’s supervised oil output.

(United Press International)

How important are Iraq's oil reserves for the world?

As of 2002, Iraq’s production represented about 2% to 2.5% of world oil use. In comparison, the surplus capacity of Saudi Arabia and other Persian Gulf suppliers was equivalent to about 6% of global oil consumption.

(Deutsche Bank)

How did the 1991 Persian Gulf war affect Iraq's oil industry?

Iraq’s oil-refining capacity today is currently 400,000 barrels per day — compared to 700,000 barrels per day before the Gulf War.

(Deutsche Bank)

Now that the 2003 war is over, what will be required to improve the industry?

Iraq’s oil sector is expected to require $5 billion in investment over three years to return it to pre-1991 production levels. That figure would rise to $15 billion to achieve full production levels.

(Rice University)

How much would a strengthened Iraq add to the global oil supply?

Rehabilitation of under-invested and bombed oil facilities in Iraq could add 1 to 2 million barrels per day capacity over a two to three-year period.

(Deutsche Bank)

Why are people optimistic about Iraq's oil resources?

As of 2003, only 17% of the 74 proven fields of oil reserves in Iraq have been exploited.

(Council on Foreign Relations)