Iraq 'significant factor' in soaring price of oil
The Register Guard
By Jim Krane
The Associated Press April 29, 2006
DUBAI, United Arab Emirates - With oil prices above $70 a barrel fouling the world economy, dismay is focusing on Iraq, whose exports have slipped to their lowest levels since the 2003 invasion.
"Iraq could be making a tremendous difference," said Dalton Garis, an economist at the Petroleum Institute in Abu Dhabi. Instead, its shortfall is "a significant contributing factor to the high price of oil."
Iraq sits atop the world's third-highest proven reserves. Its estimated 115 billion barrels is more than any other OPEC member except for Saudi Arabia and Iran.
But contrary to optimistic expectations, Iraq's oil production has slipped further and further since the U.S.-led invasion, to an average of 2 million barrels a day. It has never regained even the reduced production levels that prevailed in the 1990s, when Iraq was under U.N. sanctions.
Iraq's oil could be providing relief to world markets, strained by high demand from China, the nuclear-related showdown with Iran and unrest near Nigeria's oil fields. Instead, it's not even covering its own needs.
The rickety Iraqi oil system has been damaged repeatedly by insurgent sabotage and attacks on maintenance crews. Corruption, theft of oil, and widespread mismanagement compound the problems, analysts say.
The result: Iraq is importing refined oil products at a time that it should be boosting exports to earn money for reconstruction.